ALIMENTATION COUCHE-TARD ANNOUNCES ITS RESULTS FOR ITS THIRD QUARTER OF FISCAL YEAR 2024
- Net earnings attributable to shareholders of the Corporation were 623.4 million, or
$0.65 per diluted share for the third quarter of fiscal 2024 compared with$737.4 million , or$0.73 per diluted share for the third quarter of fiscal 2023. Adjusted net earnings attributable to shareholders of the Corporation1 were approximately$625.0 million compared with$741.0 million for the third quarter of fiscal 2023. Adjusted diluted net earnings per share1 were$0.65 , representing a decrease of 12.2% from$0.74 for the corresponding quarter of last year. - Total merchandise and service revenues of
$5.0 billion , an increase of 1.6%. Same-store merchandise revenues2 decreased by 1.5% inthe United States , by 0.3% inEurope and other regions1, and by 1.2% inCanada . - Merchandise and service gross margin1 decreased by 0.1% in
the United States to 33.1%, increased by 1.9% inEurope and other regions to 39.2%, and increased by 1.9% inCanada to 34.2%. - Same-store road transportation fuel volumes decreased by 0.8% in
the United States , by 1.9% inEurope and other regions, and increased by 0.2% inCanada . - Road transportation fuel gross margin1 of 43.19¢ per gallon in
the United States , a decrease of 3.66¢ per gallon, US 8.56¢ per liter inEurope and other regions, an increase of US 0.55¢ per liter, and CA 12.99¢ per liter inCanada , an increase of CA 0.47¢ per liter. Notwithstanding the modest decline from previous levels, fuel gross margins1 remained healthy throughout the network. - Growth of expenses for the third quarter of fiscal 2024 was 3.1%, while normalized decrease in expenses1 was 1.6%, as disciplined cost control more than compensated the inflationary pressures.
- Strong network growth with the addition of 2,175 sites from TotalEnergies SE in
Europe , for a total cash consideration of approximately €3.4 billion ($3.8 billion ) and 112 sites from MAPCO inthe United States , for a total cash consideration of$468.6 million . - Successful issuance of Canadian-dollar-denominated senior unsecured notes in the amount of CA
$500.0 million ($371.7 million ), and subsequent to the end of the quarter, successful issuance of US-dollar-denominated senior unsecured notes of$1.5 billion and Euro-denominated senior unsecured notes of €1.35 billion ($1.45 billion ).
LAVAL, QC,
__________________________ |
1 Please refer to the "Non-IFRS Accounting Standards Measures" section for additional information on performance measures not defined by IFRS® Accounting Standards. |
2 This measure represents the growth of (decrease in) cumulative merchandise revenues between the current period and comparative period for those stores that were open for at least 23 days out of every 28-day period included in the reported periods. Merchandise revenues are defined as Merchandise and service revenues excluding service revenues. |
"As we continue to navigate near term headwinds, especially in
"We are pleased this quarter with the significant growth of our network. In January, we closed on the acquisition of certain European retail assets from TotalEnergies, and welcomed four new countries, nearly 22,000 team members, and 2,175 sites into the
The Corporation announced today that
Significant Items of the Third Quarter of Fiscal 2024
- During the third quarter and first three quarters of fiscal 2024, we repurchased 3.1 million and 21.3 million shares, for amounts of
$175.9 million and$1.1 billion , respectively. - On
January 25, 2024 , we issued Canadian-dollar-denominated senior unsecured notes totaling CA$500.0 million ($371.7 million ) with a coupon rate of 4.60%, an effective rate of 4.74%, and maturing onJanuary 25, 2029 . The$369.4 million net proceeds from the issuance were used to partially repay outstanding indebtedness under our acquisition facility. - Subsequent to the end of the quarter, on
February 12, 2024 , we issued US-dollar-denominated senior unsecured notes totaling$1.5 billion , consisting of a$900.0 million tranche with a coupon rate of 5.27% and maturing in 2034, as well as a$600.0 million tranche with a coupon rate of 5.62% and maturing in 2054. We also issued Euro-denominated senior unsecured notes totaling €1.35 billion ($1.45 billion ), consisting of a €700.0 million ($754.0 million ) tranche with a coupon rate of 3.65% and maturing in 2031, as well as a €650.0 million ($700.2 million ) tranche with a coupon rate of 4.01% and maturing in 2036. We used the net proceeds from these issuances to repay outstanding indebtedness under our acquisition facility.
_______________________ |
1 Please refer to the "Non-IFRS Accounting Standards Measures" section for additional information on performance measures not defined by IFRS Accounting Standards. |
Acquisition of certain European retail assets from TotalEnergies SE
- On
December 28, 2023 andJanuary 3, 2024 , we closed the acquisition of 2,175 sites from TotalEnergies SE for a total cash consideration of approximately €3.4 billion ($3.8 billion ), including preliminary adjustments, and subject to post closing adjustments. The retail assets included in the transaction cover 1,191 sites located inGermany , 562 sites inBelgium , 378 sites inthe Netherlands , and 44 sites in Luxembourg, of which 1,492 sites are company-owned and 683 sites are dealer-owned. For the same sites included in the transaction, 19% are company-operated and 81% are dealer-operated. The transaction comprises 100% of TotalEnergies SE's retail assets inGermany andthe Netherlands , as well as a 60% controlling interest in theBelgium and Luxembourg entities (together "Circle K Belgium SA "). - From
December 28, 2023 andJanuary 3, 2024 , the acquired sites' results, balance sheet and cash flows are included in our consolidated financial statements. The earnings attributable toCircle K Belgium SA's other shareholders are presented as Net earnings attributable to non-controlling interest. - We expect that our synergies1 associated with the acquisition of certain European retail assets from TotalEnergies SE will reach €170.0 million (
$187.0 million ) over the 5 years following the transaction. These synergies1 should mainly result from improvements in the convenience activities as well as from reductions in operating, selling, general and administrative expenses. - In relation with the acquisition of 60% of
Circle K Belgium SA , we entered into a shareholder's agreement withTotalEnergies Marketing Belgium SA , which holds the remaining 40% ownership interest in this entity. This shareholder's agreement entitled each of the parties, at their sole discretion after a period of two years following the closing of the transaction, to sell their ownership interests to the other party. As a result, a redemption liability of$251.0 million , representing the present value of the estimated redemption amount as atJanuary 3, 2024 , was recorded to Other long-term financial liabilities on the consolidated balance sheet, with an equivalent amount reclassified from Retained earnings. Subsequent to the initial recognition of the redemption liability, the effects of its discounting and any changes to the gross redemption amount are recorded to Retained earnings. As atFebruary 4, 2024 , the redemption liability amounted to$250.2 million . - In order to finance the acquisition of certain European retail assets from TotalEnergies SE and the related acquisition costs, we entered into a new credit agreement consisting of a non-revolving credit facility of an aggregate maximum amount of
$1.75 billion and €1.5 billion (the "acquisition facility"). As atFebruary 4, 2024 , a total amount of$3.0 billion was outstanding and the weighted average effective interest rate of the outstanding indebtedness under the acquisition facility was 5.78%. Subsequent to the end of the quarter and following the issuance of senior unsecured notes, this acquisition facility was fully repaid. - Prior to the acquisition, to mitigate the currency fluctuation risk associated with the Euro, we entered into Euro / US dollar currency forward contracts with financial institutions for a portion of the consideration, representing €1.9 billion. In relation with the closing of the transaction, the currency forwards were settled for net proceeds of
$16.6 million .
Other Changes in our Network during the Third Quarter of Fiscal 2024
- On
November 1, 2023 , we closed the acquisition of 112 company-owned and operated convenience retail and fuel sites operating under the MAPCO brand and located in the states ofAlabama ,Georgia ,Kentucky ,Mississippi andTennessee , inthe United States . The acquisition also includes surplus properties and a logistics fleet. The transaction was settled for a consideration of$468.6 million , subject to post closing adjustments, and was financed using our available cash and ourUnited States commercial paper program. - We acquired 17 company-operated stores, reaching a total of 27 company-operated stores acquired through various transactions since the beginning of fiscal 2024. We settled these transactions using our available cash.
- We completed the construction of 16 stores and the relocation or reconstruction of 2 stores, reaching a total of 60 stores since the beginning of fiscal 2024. As of
February 4, 2024 , another 39 stores were under construction and should open in the upcoming quarters.
________________________ |
1 Expected synergies represent forward-looking information and are destined to illustrate additional benefits expected to stem from these transactions. They might not be suitable for other needs. For additional information, please refer to the "Forward-Looking Statements'' section. |
Summary of changes in our store network
The following table presents certain information regarding changes in our store network over the 16–week period ended
|
16–week period ended |
||||||||
Type of site |
Company- |
|
CODO |
|
DODO |
|
Franchised and other affiliated |
|
Total |
Number of sites, beginning of period |
9,938 |
|
336 |
|
793 |
|
1,254 |
|
12,321 |
Acquisitions |
538 |
|
1,083 |
|
683 |
|
— |
|
2,304 |
Openings / constructions / additions |
16 |
|
— |
|
9 |
|
19 |
|
44 |
Closures / disposals / withdrawals |
(30) |
|
(1) |
|
(9) |
|
(34) |
|
(74) |
Store conversions |
1 |
|
(3) |
|
— |
|
2 |
|
— |
Number of sites, end of period |
10,463 |
|
1,415 |
|
1,476 |
|
1,241 |
|
14,595 |
|
|
|
|
|
|
|
|
|
2,120 |
Total network |
|
|
|
|
|
|
|
|
16,715 |
Number of automated fuel stations included in the period-end figures |
1,175 |
|
— |
|
84 |
|
— |
|
1,259 |
(1) |
Stores which are part of |
Exchange Rate Data
We use the US dollar as our reporting currency, which provides more relevant information given the predominance of our operations in
The following table sets forth information about exchange rates based upon closing rates expressed as US dollars per comparative currency unit:
|
16–week periods ended |
40-week periods ended |
||
|
|
|
|
|
Average for the period(1) |
|
|
|
|
Canadian dollar |
0.7375 |
0.7388 |
0.7418 |
0.7577 |
Norwegian krone |
0.0934 |
0.0991 |
0.0938 |
0.1005 |
Swedish krone |
0.0949 |
0.0942 |
0.0937 |
0.0959 |
Danish krone |
0.1451 |
0.1394 |
0.1453 |
0.1386 |
Zloty |
0.2470 |
0.2201 |
0.2431 |
0.2189 |
Euro |
1.0824 |
1.0368 |
1.0837 |
1.0307 |
|
0.1280 |
0.1279 |
0.1278 |
0.1276 |
(1) |
Calculated by taking the average of the closing exchange rates of each day in the applicable period. |
For the analysis of consolidated results, the impact of the translation of our foreign currency operations into US dollars is defined as the impact from the translation of our Canadian, European, Asian, and corporate operations into US dollars. Variances of our foreign currency operations into US dollars are determined as being the difference between the corresponding period results in local currencies translated at the current period average exchange rate and the corresponding period results in local currencies translated at the corresponding period average exchange rate.
Summary Analysis of Consolidated Results for the Third Quarter and First Three Quarters of Fiscal 2024
The following table highlights certain information regarding our operations for the 16 and 40-week periods ended
|
16–week periods ended |
40-week periods ended |
||||
(in millions of US dollars, unless otherwise stated) |
2024 |
2023 |
Variation % |
2024 |
2023 |
Variation % |
Statement of Operations Data: |
|
|
|
|
|
|
Merchandise and service revenues(1): |
|
|
|
|
|
|
|
3,569.3 |
3,541.6 |
0.8 |
9,511.3 |
9,349.5 |
1.7 |
|
787.5 |
713.0 |
10.4 |
1,980.4 |
1,801.0 |
10.0 |
|
682.8 |
706.6 |
(3.4) |
1,937.5 |
1,955.0 |
(0.9) |
Total merchandise and service revenues |
5,039.6 |
4,961.2 |
1.6 |
13,429.2 |
13,105.5 |
2.5 |
Road transportation fuel revenues: |
|
|
|
|
|
|
|
8,737.7 |
9,411.5 |
(7.2) |
24,322.6 |
27,328.9 |
(11.0) |
|
3,918.5 |
3,475.5 |
12.7 |
8,769.4 |
9,288.9 |
(5.6) |
|
1,676.8 |
1,828.2 |
(8.3) |
4,632.1 |
4,943.1 |
(6.3) |
Total road transportation fuel revenues |
14,333.0 |
14,715.2 |
(2.6) |
37,724.1 |
41,560.9 |
(9.2) |
Other revenues(2): |
|
|
|
|
|
|
|
11.0 |
14.2 |
(22.5) |
28.7 |
32.4 |
(11.4) |
|
227.5 |
343.2 |
(33.7) |
461.0 |
859.3 |
(46.4) |
|
10.9 |
21.3 |
(48.8) |
27.8 |
34.2 |
(18.7) |
Total other revenues |
249.4 |
378.7 |
(34.1) |
517.5 |
925.9 |
(44.1) |
Total revenues |
19,622.0 |
20,055.1 |
(2.2) |
51,670.8 |
55,592.3 |
(7.1) |
Merchandise and service gross profit(1)(3): |
|
|
|
|
|
|
|
1,179.8 |
1,175.5 |
0.4 |
3,230.8 |
3,148.3 |
2.6 |
|
309.0 |
266.1 |
16.1 |
777.8 |
685.9 |
13.4 |
|
233.5 |
228.2 |
2.3 |
654.3 |
642.1 |
1.9 |
Total merchandise and service gross profit |
1,722.3 |
1,669.8 |
3.1 |
4,662.9 |
4,476.3 |
4.2 |
Road transportation fuel gross profit(3): |
|
|
|
|
|
|
|
1,191.8 |
1,265.9 |
(5.9) |
3,330.8 |
3,355.3 |
(0.7) |
|
311.2 |
252.8 |
23.1 |
761.6 |
775.3 |
(1.8) |
|
162.6 |
163.5 |
(0.6) |
437.1 |
420.8 |
3.9 |
Total road transportation fuel gross profit |
1,665.6 |
1,682.2 |
(1.0) |
4,529.5 |
4,551.4 |
(0.5) |
Other revenues gross profit(2)(3): |
|
|
|
|
|
|
|
11.0 |
14.2 |
(22.5) |
28.7 |
32.4 |
(11.4) |
|
33.3 |
23.6 |
41.1 |
72.2 |
61.8 |
16.8 |
|
9.3 |
10.7 |
(13.1) |
23.1 |
21.6 |
6.9 |
Total other revenues gross profit |
53.6 |
48.5 |
10.5 |
124.0 |
115.8 |
7.1 |
Total gross profit(3) |
3,441.5 |
3,400.5 |
1.2 |
9,316.4 |
9,143.5 |
1.9 |
Operating, selling, general and administrative expenses |
1,975.3 |
1,916.1 |
3.1 |
4,882.7 |
4,747.2 |
2.9 |
Loss (gain) on disposal of property and equipment and other assets |
1.4 |
(4.9) |
(128.6) |
(1.9) |
(38.3) |
(95.0) |
Depreciation, amortization and impairment |
537.5 |
463.2 |
16.0 |
1,267.6 |
1,136.3 |
11.6 |
Operating income |
927.3 |
1,026.1 |
(9.6) |
3,168.0 |
3,298.3 |
(4.0) |
Net financial expenses |
130.3 |
82.5 |
57.9 |
248.0 |
207.7 |
19.4 |
Net earnings |
624.4 |
737.4 |
(15.3) |
2,277.7 |
2,420.2 |
(5.9) |
Net earnings attributable to non-controlling interests |
(1.0) |
— |
(100.0) |
(1.0) |
— |
(100.0) |
Net earnings attributable to shareholders of the Corporation |
623.4 |
737.4 |
(15.5) |
2,276.7 |
2,420.2 |
(5.9) |
Per Share Data: |
|
|
|
|
|
|
Basic net earnings per share (dollars per share) |
0.65 |
0.73 |
(11.0) |
2.35 |
2.38 |
(1.3) |
Diluted net earnings per share (dollars per share) |
0.65 |
0.73 |
(11.0) |
2.35 |
2.38 |
(1.3) |
Adjusted diluted net earnings per share (dollars per share)(3) |
0.65 |
0.74 |
(12.2) |
2.32 |
2.41 |
(3.7) |
|
16–week periods ended |
40-week periods ended |
||||
(in millions of US dollars, unless otherwise stated) |
2024 |
2023 |
Variation % |
2024 |
2023 |
Variation % |
Other Operating Data: |
|
|
|
|
|
|
Merchandise and service gross margin(1)(3): |
|
|
|
|
|
|
Consolidated |
34.2 % |
33.7 % |
0.5 |
34.7 % |
34.2 % |
0.5 |
|
33.1 % |
33.2 % |
(0.1) |
34.0 % |
33.7 % |
0.3 |
|
39.2 % |
37.3 % |
1.9 |
39.3 % |
38.1 % |
1.2 |
|
34.2 % |
32.3 % |
1.9 |
33.8 % |
32.8 % |
1.0 |
Growth of (decrease in) same-store merchandise revenues(4): |
|
|
|
|
|
|
|
(1.5 %) |
4.8 % |
|
— % |
4.6 % |
|
|
(0.3 %) |
3.5 % |
|
0.7 % |
3.1 % |
|
|
(1.2 %) |
2.3 % |
|
2.1 % |
(0.1 %) |
|
Road transportation fuel gross margin(3): |
|
|
|
|
|
|
|
43.19 |
46.85 |
(7.8) |
47.22 |
48.21 |
(2.1) |
|
8.56 |
8.01 |
6.9 |
8.94 |
9.79 |
(8.7) |
|
12.99 |
12.52 |
3.8 |
13.27 |
12.96 |
2.4 |
Total volume of road transportation fuel sold: |
|
|
|
|
|
|
|
2,759.2 |
2,702.2 |
2.1 |
7,053.6 |
6,959.4 |
1.4 |
|
3,634.8 |
3,157.0 |
15.1 |
8,520.3 |
7,922.0 |
7.6 |
|
1,696.9 |
1,769.0 |
(4.1) |
4,439.4 |
4,286.5 |
3.6 |
Growth of (decrease in) same-store road transportation fuel volumes(5): |
|
|
|
|
|
|
|
(0.8 %) |
(2.3 %) |
|
(0.6 %) |
(2.7 %) |
|
|
(1.9 %) |
(1.2 %) |
|
(1.5 %) |
(3.5 %) |
|
|
0.2 % |
0.5 % |
|
3.1 % |
(1.8 %) |
|
(in millions of US dollars, unless otherwise stated) |
As at |
As at
|
Variation $ |
Balance Sheet Data: |
|
|
|
Total assets |
36,243.6 |
29,058.4 |
7,185.2 |
Interest-bearing debt(3) |
14,690.6 |
9,473.6 |
5,217.0 |
Equity attributable to shareholders of the Corporation |
13,299.5 |
12,564.5 |
735.0 |
Indebtedness Ratios(3): |
|
|
|
Net interest-bearing debt/total capitalization |
0.51 : 1 |
0.41 : 1 |
|
Leverage ratio |
2.19 : 1 |
1.50 : 1 |
|
Returns(3): |
|
|
|
Return on equity |
23.2 % |
24.7 % |
|
Return on capital employed |
14.9 % |
17.5 % |
|
(1) |
Includes revenues derived from franchise fees, royalties, suppliers' rebates on some purchases made by franchisees and licensees, as well as from wholesale of merchandise. Franchise fees from international licensed stores are presented in |
(2) |
Includes revenues from the rental of assets and from the sale of aviation fuel and energy for stationary engines. |
(3) |
Please refer to the "Non-IFRS Accounting Standards Measures" section for additional information on our performance measures not defined by IFRS Accounting Standards, as well as our capital management measure. |
(4) |
This measure represents the growth of (decrease in) cumulative merchandise revenues between the current period and comparative period for those stores that were open for at least 23 days out of every 28-day period included in the reported periods. Merchandise revenues are defined as Merchandise and service revenues excluding service revenues. |
(5) |
For company-operated stores only. |
(6) |
Calculated based on respective functional currencies. |
(7) |
Growth of (decrease in) same-store merchandise revenues and growth of (decrease in) same-store road transportation fuel volumes for |
(8) |
The information as at |
|
|
Revenues
Our revenues were
For the first three quarters of fiscal 2024, our revenues decreased by
Merchandise and service revenues
Total merchandise and service revenues for the third quarter of fiscal 2024 were
For the first three quarters of fiscal 2024, the growth in merchandise and service revenues was
_______________________ |
1 Please refer to the "Non-IFRS Accounting Standards Measures" section for additional information on performance measures not defined by IFRS Accounting Standards. |
Road transportation fuel revenues
Total road transportation fuel revenues for the third quarter of fiscal 2024 were
For the first three quarters of fiscal 2024, the road transportation fuel revenues decreased by
The following table shows the average selling price of road transportation fuel of our company-operated stores in our various markets for the last eight quarters. The average selling price of road transportation fuel consists of the road transportation fuel revenues divided by the volume of road transportation fuel sold:
Quarter |
4ᵗʰ |
1ˢᵗ |
2ⁿᵈ |
3ʳᵈ |
Weighted |
|
53–week period ended |
|
|
|
|
|
|
|
United States (US dollars per gallon) |
3.52 |
3.52 |
3.76 |
3.18 |
3.47 |
|
|
109.77 |
98.02 |
108.87 |
112.53 |
107.97 |
|
|
137.66 |
142.77 |
152.03 |
136.26 |
141.83 |
52–week period ended |
|
|
|
|
|
|
|
United States (US dollars per gallon) |
3.94 |
4.61 |
3.84 |
3.50 |
3.94 |
|
|
120.84 |
129.11 |
117.39 |
113.55 |
121.16 |
|
|
150.30 |
179.15 |
149.55 |
143.32 |
154.70 |
Other revenues
Total other revenues for the third quarter of fiscal 2024 were
For the first three quarters of fiscal 2024, total other revenues were
Gross profit1
Our gross profit was $3.4 billion for the third quarter of fiscal 2024, up by
For the first three quarters of fiscal 2024, our gross profit increased by
Merchandise and service gross profit
In the third quarter of fiscal 2024, our merchandise and service gross profit was
During the first three quarters of fiscal 2024, our merchandise and service gross profit was $4.7 billion, an increase of
________________________ |
1 Please refer to the "Non-IFRS Accounting Standards Measures" section for additional information on performance measures not defined by IFRS Accounting Standards. |
Road transportation fuel gross profit
In the third quarter of fiscal 2024, our road transportation fuel gross profit was
During the first three quarters of fiscal 2024, our road transportation fuel gross profit was $4.5 billion, a decrease of
The road transportation fuel gross margin1 of our company-operated stores in
(US cents per gallon) |
|
|
|
|
|
Quarter |
4ᵗʰ |
1ˢᵗ |
2ⁿᵈ |
3ʳᵈ |
Weighted |
53–week period ended |
|
|
|
|
|
Before deduction of expenses related to electronic payment modes |
46.43 |
51.26 |
51.15 |
44.38 |
48.02 |
Expenses related to electronic payment modes(1) |
6.17 |
6.13 |
6.04 |
5.77 |
6.01 |
After deduction of expenses related to electronic payment modes |
40.26 |
45.13 |
45.11 |
38.61 |
42.01 |
52–week period ended |
|
|
|
|
|
Before deduction of expenses related to electronic payment modes |
47.55 |
50.95 |
51.11 |
48.39 |
49.45 |
Expenses related to electronic payment modes(1) |
6.61 |
7.21 |
6.53 |
6.20 |
6.61 |
After deduction of expenses related to electronic payment modes |
40.94 |
43.74 |
44.58 |
42.19 |
42.84 |
(1) |
Expenses related to electronic payment modes are determined by allocating the portion of total electronic payment modes, which are included in Operating, selling, general and administrative expenses, deemed related to our |
The road transportation fuel gross margin1 of our network in
Quarter |
4ᵗʰ |
1ˢᵗ |
2ⁿᵈ |
3ʳᵈ |
Weighted |
53–week period ended |
|
|
|
|
|
|
10.60 |
8.21 |
10.20 |
8.56 |
9.31 |
|
12.13 |
13.25 |
13.63 |
12.99 |
12.99 |
52–week period ended |
|
|
|
|
|
|
7.51 |
12.26 |
9.76 |
8.01 |
9.23 |
|
13.41 |
14.04 |
12.55 |
12.52 |
13.05 |
Generally, road transportation fuel margins can be volatile from one quarter to another but tend to be more stable over longer periods. In
Other revenues gross profit
In the third quarter and first three quarters of fiscal 2024, other revenues gross profit were $53.6 million and
Operating, selling, general and administrative expenses ("expenses")
For the third quarter and first three quarters of fiscal 2024, expenses increased by 3.1% and 2.9%, respectively, compared with the corresponding periods of fiscal 2023. Normalized decrease in expenses[7] was 1.6%, and normalized growth of expenses1 was 0.9%, respectively, as shown in the table below:
|
16–week periods ended |
40-week periods ended |
||
|
|
|
|
|
Growth of expenses, as reported |
3.1 % |
6.4 % |
2.9 % |
7.9 % |
Adjusted for: |
|
|
|
|
Increase from incremental expenses related to acquisitions |
(4.8 %) |
(0.9 %) |
(2.9 %) |
(0.9 %) |
Decrease (increase) from changes in electronic payment fees, excluding acquisitions |
0.7 % |
(0.8 %) |
1.0 % |
(2.1 %) |
(Increase) decrease from the net impact of foreign exchange translation |
(0.4 %) |
3.1 % |
— |
2.9 % |
Increase from changes in acquisition costs recognized to earnings |
(0.2 %) |
— |
(0.1 %) |
(0.1 %) |
Normalized (decrease in) growth of expenses1 |
(1.6 %) |
7.8 % |
0.9 % |
7.7 % |
Normalized decrease in expenses1 for the third quarter of fiscal 2024 was mainly driven by the continued strategic efforts to control our expenses, including labor efficiency in our stores. Our control of expenses is evidenced by our normalized decrease in expenses1 as disciplined cost control more than compensated the inflationary pressures, the impact of costs from rising minimum wages, as well as incremental investments to support our strategic initiatives.
Normalized growth of expenses1 for the first three quarters of fiscal 2024 was mainly driven by the impact of costs from rising minimum wages, inflationary pressures, and incremental investments to support our strategic initiatives, while being partly offset by the continued strategic efforts to control our expenses, including labor efficiency in our stores. Our control of expenses is evidenced by our normalized growth of expenses1 remaining lower than the average inflation observed throughout our network.
Earnings before interest, taxes, depreciation, amortization and impairment ("EBITDA1") and adjusted EBITDA1
During the third quarter of fiscal 2024, EBITDA stood at
During the first three quarters of fiscal 2024, EBITDA stood at
Depreciation, amortization and impairment ("depreciation")
For the third quarter of fiscal 2024, our depreciation expense increased by
For the first three quarters of fiscal 2024, our depreciation expense increased by $131.3 million compared with the first three quarters of fiscal 2023. The translation of our foreign currency operations into US dollars had a net favorable impact of approximately
________________________ |
1 Please refer to the "Non-IFRS Accounting Standards Measures" section for additional information on performance measures not defined by IFRS Accounting Standards. |
Net financial expenses
Net financial expenses for the third quarter and first three quarters of fiscal 2024 were
|
16–week periods ended |
40-week periods ended |
||||
(in millions of US dollars) |
|
|
Variation |
|
|
Variation |
Net financial expenses, as reported |
130.3 |
82.5 |
47.8 |
248.0 |
207.7 |
40.3 |
Explained by: |
|
|
|
|
|
|
Net foreign exchange gain (loss) |
5.4 |
(1.6) |
7.0 |
11.4 |
(1.1) |
12.5 |
Change in fair value of financial instruments and amortization of deferred differences |
— |
(0.1) |
0.1 |
(11.8) |
0.9 |
(12.7) |
Reclassification adjustment of gain on forward starting interest rate swaps |
— |
— |
— |
32.9 |
— |
32.9 |
Remaining variation |
135.7 |
80.8 |
54.9 |
280.5 |
207.5 |
73.0 |
The remaining variation of the third quarter and first three quarters of fiscal 2024 is mainly driven by higher average short-term and long-term debt in connection with our recent acquisitions, as well as higher interest rates, partly offset by higher interest revenue.
Income taxes
The income tax rate for the third quarter and first three quarters of fiscal 2024 was 22.0% and 22.6%, respectively, compared with 21.9% for the corresponding periods of fiscal 2023. These increases mainly stem from the impact of a different mix in our earnings across the various jurisdictions in which we operate.
Net earnings attributable to shareholders of the Corporation and adjusted net earnings attributable to shareholders of the Corporation1
Net earnings attributable to shareholders of the Corporation for the third quarter of fiscal 2024 were
Adjusted net earnings attributable to shareholders of the Corporation for the third quarter of fiscal 2024 were approximately
For the first three quarters of fiscal 2024, net earnings attributable to shareholders of the Corporation stood at
Adjusted net earnings attributable to shareholders of the Corporation for the first three quarters of fiscal 2024 stood at
Dividends
During its
_______________________ |
1 Please refer to the "Non-IFRS Accounting Standards Measures" section for additional information on performance measures not defined by IFRS Accounting Standards. |
Non-IFRS Accounting Standards Measures
To provide more information for evaluating the Corporation's performance, the financial information included in our financial documents contains certain data that are not performance measures under IFRS® Accounting Standards as issued by the
The following Non-IFRS Accounting Standards financial measures are used in our financial disclosures:
- Gross profit;
- Earnings before interest, taxes, depreciation, amortization and impairment ("EBITDA") and adjusted EBITDA;
- Adjusted net earnings attributable to shareholders of the Corporation;
- Interest-bearing debt.
The following Non-IFRS Accounting Standards ratios are used in our financial disclosures:
- Merchandise and service gross margin and Road transportation fuel gross margin;
- Normalized growth of (decrease in) operating, selling, general and administrative expenses;
- Growth of (decrease in) same-store merchandise revenues for
Europe and other regions; - Adjusted diluted net earnings per share;
- Leverage ratio;
- Return on equity and return on capital employed.
The following capital management measure is used in our financial disclosures:
- Net interest-bearing debt/total capitalization.
Supplementary financial measures are also used in our financial disclosures and those measures are described where they are presented.
Non-IFRS Accounting Standards financial measures and ratios, as well as the capital management measure, are mainly derived from the consolidated financial statements, but do not have standardized meanings prescribed by IFRS Accounting Standards. These Non-IFRS Accounting Standards measures should not be considered in isolation or as a substitute for financial measures prepared in accordance with IFRS Accounting Standards. In addition, our definitions of Non-IFRS Accounting Standards measures may differ from those of other public corporations. Any such modification or reformulation may be significant. These measures are also adjusted for the pro forma impact of our acquisitions and impacts of new accounting standards, if they are considered to be material.
Gross profit. Gross profit consists of revenues less the cost of sales, excluding depreciation, amortization and impairment. This measure is considered useful for evaluating the underlying performance of our operations.
The table below reconciles revenues and cost of sales, excluding depreciation, amortization and impairment, as per IFRS Accounting Standards, to gross profit:
|
16–week periods ended |
40-week periods ended |
||
(in millions of US dollars) |
|
|
|
|
Revenues |
19,622.0 |
20,055.1 |
51,670.8 |
55,592.3 |
Cost of sales, excluding depreciation, amortization and impairment |
16,180.5 |
16,654.6 |
42,354.4 |
46,448.8 |
Gross profit |
3,441.5 |
3,400.5 |
9,316.4 |
9,143.5 |
Please note that the same reconciliation applies in the determination of gross profit by category and by geography presented in the section "Summary Analysis of Consolidated Results".
Merchandise and service gross margin. Merchandise and service gross margin consists of Merchandise and service gross profit divided by Merchandise and service revenues, both measures are presented in the section "Summary Analysis of Consolidated Results". Merchandise and service gross margin is considered useful for evaluating how efficiently we generate gross profit by dollar of revenue.
Road transportation fuel gross margin. Road transportation fuel gross margin consists of Road transportation fuel gross profit divided by total volume of road transportation fuel sold. For
|
16–week periods ended |
40-week periods ended |
||
(in millions of Canadian dollars, unless otherwise noted) |
|
|
|
|
Road transportation fuel revenues |
2,273.7 |
2,475.2 |
6,242.0 |
6,517.7 |
Road transportation fuel cost of sales, excluding depreciation, amortization and impairment |
2,053.3 |
2,253.7 |
5,653.1 |
5,962.2 |
Road transportation fuel gross profit |
220.4 |
221.5 |
588.9 |
555.5 |
Total road transportation fuel volume sold (in millions of liters) |
1,696.9 |
1,769.0 |
4,439.4 |
4,286.5 |
Road transportation fuel gross margin (CA cents per liter) |
12.99 |
12.52 |
13.27 |
12.96 |
Normalized growth of (decrease in) operating, selling, general and administrative expenses ("normalized growth of (decrease in) expenses"). Normalized growth of (decrease in) expenses consists of the growth of (decrease in) Operating, selling, general and administrative expenses adjusted for the impact of the changes in our network, the impact from changes in accounting policies and adoption of accounting standards, the impact of more volatile items over which we have limited control including, but not limited to, the net impact of foreign exchange translation, electronic payment fees excluding acquisitions, and acquisition costs, as well as other specific items for which the impact on consolidated results is not deemed indicative of future trends. This measure is considered useful for evaluating our ability to control our expenses on a comparable basis.
The tables below reconcile growth of Operating, selling, general and administrative expenses to normalized growth of (decrease in) expenses:
|
16–week periods ended |
|||||
(in millions of US dollars, unless otherwise noted) |
|
|
Variation |
|
|
Variation |
Operating, selling, general and administrative expenses, as published |
1,975.3 |
1,916.1 |
3.1 % |
1,916.1 |
1,801.3 |
6.4 % |
Adjusted for: |
|
|
|
|
|
|
Increase from incremental expenses related to acquisitions |
(92.4) |
— |
(4.8 %) |
(16.4) |
— |
(0.9 %) |
Decrease (increase) from changes in electronic payment fees, excluding acquisitions |
12.7 |
— |
0.7 % |
(15.2) |
— |
(0.8 %) |
(Increase) decrease from the net impact of foreign exchange translation |
(7.4) |
— |
(0.4 %) |
56.2 |
— |
3.1 % |
(Increase) decrease from changes in acquisition costs recognized to earnings |
(2.9) |
— |
(0.2 %) |
0.5 |
— |
— |
Normalized (decrease in) growth of expenses |
1,885.3 |
1,916.1 |
(1.6 %) |
1,941.2 |
1,801.3 |
7.8 % |
|
40-week periods ended |
|||||
(in millions of US dollars, unless otherwise noted) |
|
|
Variation |
|
|
Variation |
Operating, selling, general and administrative expenses, as published |
4,882.7 |
4,747.2 |
2.9 % |
4,747.2 |
4,400.7 |
7.9 % |
Adjusted for: |
|
|
|
|
|
|
Increase from incremental expenses related to acquisitions |
(138.6) |
— |
(2.9 %) |
(40.7) |
— |
(0.9 %) |
Decrease (increase) from changes in electronic payment fees, excluding acquisitions |
50.5 |
— |
1.0 % |
(92.6) |
— |
(2.1 %) |
Increase from changes in acquisition costs recognized to earnings |
(4.1) |
— |
(0.1 %) |
(3.4) |
— |
(0.1 %) |
(Increase) decrease from the net impact of foreign exchange translation |
(1.4) |
— |
— |
130.1 |
— |
2.9 % |
Normalized growth of expenses |
4,789.1 |
4,747.2 |
0.9 % |
4,740.6 |
4,400.7 |
7.7 % |
Growth of (decrease in) same-store merchandise revenues for
The tables below reconcile Merchandise and service revenues, as per IFRS Accounting Standards, to same-store merchandise revenues for
|
16–week periods ended |
|||
(in millions of US dollars, unless otherwise noted) |
|
|
|
|
Merchandise and service revenues for |
787.5 |
713.0 |
713.0 |
715.9 |
Adjusted for: |
|
|
|
|
Service revenues |
(78.7) |
(61.3) |
(61.3) |
(61.4) |
Net foreign exchange impact |
— |
15.3 |
— |
(55.2) |
Merchandise revenues not meeting the definition of same-store |
(78.6) |
(9.2) |
(27.9) |
(2.8) |
Same-store merchandise revenues from stores not included in our consolidated results, including the impact of store conversions |
73.7 |
48.2 |
92.8 |
95.7 |
Total Same-store merchandise revenues for |
703.9 |
706.0 |
716.6 |
692.2 |
Growth of (decrease in) same-store merchandise revenues for |
(0.3 %) |
|
3.5 % |
|
|
40-week periods ended |
|||
(in millions of US dollars, unless otherwise noted) |
|
|
|
|
Merchandise and service revenues for |
1,980.4 |
1,801.0 |
1,801.0 |
1,857.7 |
Adjusted for: |
|
|
|
|
Service revenues |
(176.0) |
(140.0) |
(140.0) |
(147.2) |
Net foreign exchange impact |
— |
38.0 |
— |
(160.5) |
Merchandise revenues not meeting the definition of same-store |
(120.3) |
(39.1) |
(68.8) |
(38.0) |
Same-store merchandise revenues from stores not included in our consolidated results, including the impact of store conversions |
236.2 |
247.4 |
257.4 |
281.7 |
Total Same-store merchandise revenues for |
1,920.3 |
1,907.3 |
1,849.6 |
1,793.7 |
Growth of same-store merchandise revenues for |
0.7 % |
|
3.1 % |
|
Earnings before interest, taxes, depreciation, amortization and impairment ("EBITDA") and adjusted EBITDA. EBITDA represents net earnings plus income taxes, net financial expenses, and depreciation, amortization and impairment. Adjusted EBITDA represents the EBITDA adjusted for acquisition costs, the impact from changes in accounting policies and adoption of accounting standards, as well as other specific items for which the impact on consolidated results is not deemed indicative of future trends. These performance measures are considered useful to facilitate the evaluation of our ongoing operations and our ability to generate cash flows to fund our cash requirements, including our capital expenditures program, share repurchases, and payment of dividends.
The table below reconciles net earnings, as per IFRS Accounting Standards, to EBITDA and adjusted EBITDA:
|
16–week periods ended |
40-week periods ended |
||
(in millions of US dollars) |
|
|
|
|
Net earnings |
624.4 |
737.4 |
2,277.7 |
2,420.2 |
Add: |
|
|
|
|
Income taxes |
176.2 |
206.7 |
664.5 |
678.6 |
Net financial expenses |
130.3 |
82.5 |
248.0 |
207.7 |
Depreciation, amortization and impairment |
537.5 |
463.2 |
1,267.6 |
1,136.3 |
EBITDA |
1,468.4 |
1,489.8 |
4,457.8 |
4,442.8 |
Adjusted for: |
|
|
|
|
Acquisition costs |
5.6 |
2.7 |
13.3 |
9.2 |
Adjusted EBITDA |
1,474.0 |
1,492.5 |
4,471.1 |
4,452.0 |
Adjusted net earnings attributable to shareholders of the Corporation and adjusted diluted net earnings per share. Adjusted net earnings attributable to shareholders of the Corporation represents net earnings attributable to shareholders of the Corporation adjusted for net foreign exchange gains or losses, acquisition costs, the impact from changes in accounting policies and adoption of accounting standards, impairment on goodwill, investments in subsidiaries, joint ventures and associated companies, as well as other specific items for which the impact on consolidated results is not deemed indicative of future trends, such as the reclassification adjustment of gain on forward starting interest rate swaps, and the impact of the non-controlling interests on the items mentioned previously. Please note that the changes in the composition of this measure relating to the net earnings attributable to shareholders of the Corporation and the impact of the non-controlling interests on the items mentioned previously are to reflect the impact of the addition of non-controlling interests during the quarter. These measures are considered useful for evaluating the underlying performance of our operations on a comparable basis.
The table below reconciles net earnings attributable to shareholders of the Corporation, as per IFRS Accounting Standards, with adjusted net earnings attributable to shareholders of the Corporation and adjusted diluted net earnings per share:
(in millions of US dollars, except per share amounts, or unless otherwise noted) |
16–week periods ended |
40-week periods ended |
||
|
|
|
|
|
Net earnings attributable to shareholders of the Corporation |
623.4 |
737.4 |
2,276.7 |
2,420.2 |
Adjusted for: |
|
|
|
|
Acquisition costs |
5.6 |
2.7 |
13.3 |
9.2 |
Net foreign exchange (gain) loss |
(5.4) |
1.6 |
(11.4) |
1.1 |
Reclassification adjustment of gain on forward starting interest rate swaps |
— |
— |
(32.9) |
— |
Impairment of our investment in Fire & Flower |
— |
— |
2.0 |
23.9 |
Tax impact of the items above and rounding |
1.4 |
(0.7) |
7.3 |
(0.4) |
Adjusted net earnings attributable to shareholders of the Corporation |
625.0 |
741.0 |
2,255.0 |
2,454.0 |
Weighted average number of shares - diluted (in millions) |
963.8 |
1,005.9 |
970.1 |
1,017.3 |
Adjusted diluted net earnings per share |
0.65 |
0.74 |
2.32 |
2.41 |
Interest-bearing debt. This measure represents the sum of the following balance sheet accounts: Short-term debt and current portion of long-term debt, Long-term debt, Current portion of lease liabilities and Lease liabilities. This measure is considered useful to facilitate the understanding of our financial position in relation with financing obligations. The calculation of this measure of financial position is detailed in the "Net interest-bearing debt/total capitalization" section below.
Net interest-bearing debt/total capitalization. This measure represents the basis for monitoring our capital and is considered useful to assess our financial health, risk profile, and ability to meet our financing obligations. It also provides insights into how our financing obligations are structured in relation with our total capitalization.
The table below presents the calculation of this performance measure:
(in millions of US dollars, except ratio data) |
As at |
As at |
Short-term debt and current portion of long-term debt |
2,162.9 |
0.7 |
Current portion of lease liabilities |
503.2 |
438.1 |
Long-term debt |
8,376.0 |
5,888.3 |
Lease liabilities |
3,648.5 |
3,146.5 |
Interest-bearing debt |
14,690.6 |
9,473.6 |
Less: Cash and cash equivalents |
(1,036.1) |
(834.2) |
Net interest-bearing debt |
13,654.5 |
8,639.4 |
Equity attributable to shareholders of the Corporation |
13,299.5 |
12,564.5 |
Net interest-bearing debt |
13,654.5 |
8,639.4 |
Total capitalization |
26,954.0 |
21,203.9 |
Net interest-bearing debt to total capitalization ratio |
0.51 : 1 |
0.41 : 1 |
_________________________ |
1
The information as at |
Leverage ratio. This measure represents a measure of financial condition considered useful to assess our financial leverage and our ability to cover our net financing obligations in relation to our adjusted EBITDA and pro forma impact of the acquisition of certain European retail assets from TotalEnergies SE for the 53–week period ended
The table below reconciles net interest-bearing debt and adjusted EBITDA, for which the calculation methodologies are described in other tables of this section, as well as the pro forma impact of the acquisition of certain European retail assets from TotalEnergies SE, with the leverage ratio:
|
53-week periods ended |
|
(in millions of US dollars, except ratio data) |
|
|
Net interest-bearing debt |
13,654.5 |
8,639.4 |
Adjusted EBITDA |
5,794.5 |
5,775.4 |
Pro forma adjustments(1) |
445.9 |
— |
Adjusted EBITDA and pro forma adjustments |
6,240.4 |
5,775.4 |
Leverage ratio |
2.19 : 1 |
1.50 : 1 |
(1) |
Represents the pre-acquisition EBITDA estimate of the European retail assets acquired from TotalEnergies SE from |
Return on equity. This measure is considered useful to assess the relationship between our profitability and our net assets and it also provides insights into how efficiently we are using our equity to generate returns for our shareholders. Average equity attributable to shareholders of the Corporation is calculated by taking the average of the opening and closing balance for the 53-week periods.
The table below reconciles net earnings attributable to shareholders of the Corporation, as per IFRS Accounting Standards, with the ratio of return on equity:
|
53-week periods ended |
|
(in millions of US dollars, unless otherwise noted) |
|
|
Net earnings attributable to shareholders of the Corporation |
2,947.4 |
3,090.9 |
Equity attributable to shareholders of the Corporation - Opening balance |
12,074.4 |
12,437.6 |
Equity attributable to shareholders of the Corporation - Ending balance |
13,299.5 |
12,564.5 |
Average equity attributable to shareholders of the Corporation |
12,687.0 |
12,501.1 |
Return on equity |
23.2 % |
24.7 % |
_______________________ |
1
The information as at |
Return on capital employed. This measure is considered useful as it provides insights into our ability to generate returns from the total amount of capital invested in our operations and it also helps in assessing our operational efficiency and capital allocation decisions. Earnings before interest and taxes ("EBIT") represents net earnings plus income taxes and net financial expenses. Capital employed represents total assets less short-term liabilities not bearing interest, which excludes the short-term debt and current portion of long-term debt and current portion of lease liabilities. Average capital employed is calculated by taking the average of i) the opening balance of capital employed for the 53-week periods and pro forma adjustments and ii) the ending balance of capital employed for the 53-week periods. Please note that the change in the composition of this measure relating to the pro forma impact of the acquisition of certain European retail assets from TotalEnergies SE is, as described in the opening remarks of this section, to reflect the impact of acquisitions deemed material in our ability to generate returns from the total amount of capital invested in our operations on a comparable basis given that the capital employed related to the acquisition is included in the ending balance of capital employed, but not in the opening balance of capital employed, and that the associated EBIT is not reflected throughout the 53–week period ended
The table below reconciles net earnings, as per IFRS Accounting Standards, to EBIT with the ratio of return on capital employed, including the pro forma impact of the acquisition of certain European retail assets from TotalEnergies SE:
|
53-week periods ended |
|
(in millions of US dollars, unless otherwise noted) |
|
|
Net earnings |
2,948.4 |
3,090.9 |
Add: |
|
|
Income taxes |
824.1 |
838.2 |
Net financial expenses |
347.0 |
306.7 |
EBIT |
4,119.5 |
4,235.8 |
Pro forma adjustments(1) |
249.0 |
— |
EBIT and pro forma adjustments |
4,368.5 |
4,235.8 |
Capital employed - Opening balance(2) |
23,498.8 |
24,001.0 |
Pro forma adjustments(3) |
4,538.0 |
— |
Capital employed - Opening balance and pro forma adjustments |
28,036.8 |
24,001.0 |
Capital employed - Ending balance(2) |
30,703.4 |
24,330.7 |
Average capital employed |
29,370.1 |
24,165.9 |
Return on capital employed |
14.9 % |
17.5 % |
(1) |
Represents the pre-acquisition EBIT estimate of the European retail assets acquired from TotalEnergies SE from |
|
|
(2) |
The table below reconciles balance sheet line items, as per IFRS Accounting Standards, to capital employed: |
|
|
(in millions of US dollars) |
As at |
As at |
As at |
As at |
Total Assets |
36,243.6 |
28,320.7 |
29,058.4 |
29,591.6 |
Less: Current liabilities |
(8,206.3) |
(5,272.0) |
(5,166.5) |
(6,017.4) |
Add: Short-term debt and current portion of long-term debt |
2,162.9 |
0.8 |
0.7 |
1.4 |
Add: Current portion of lease liabilities |
503.2 |
449.3 |
438.1 |
425.4 |
Capital employed |
30,703.4 |
23,498.8 |
24,330.7 |
24,001.0 |
(3) |
Represents the estimated impact of the European retail assets acquired from TotalEnergies SE on the opening balance of capital employed, using the same calculation methodology and based on the preliminary estimates of the fair value of assets acquired and liabilities assumed for this acquisition at the acquisition date. |
______________________ |
1
The information as at |
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