TORONTO, July 30, 2013 /CNW/ - George Weston Limited (TSX:
WN) ("GWL") today announced its consolidated unaudited results for
the 12 weeks ended June 15,
2013.
The 2013 Second Quarter Report to Shareholders of George Weston
Limited and its subsidiaries, together referred to as the
"Company", including the Company's unaudited interim period
condensed consolidated financial statements and Management's
Discussion and Analysis ("MD&A") for the 12 and 24 weeks ended
June 15, 2013, is available in
the Investor Centre section of the Company's website at
www.weston.ca and has been filed with the System for Electronic
Document Analysis and Retrieval ("SEDAR") and will be available at
www.sedar.com.
2013 Second Quarter Summary
- Adjusted basic net earnings per common share(1)
growth of 4.8% to $1.10 from
$1.05 in the second quarter
of 2012.
- Adjusted operating income(1) growth of 7.7% to
$392 million.
- Sales growth of 2.2% to $7,792 million.
"George Weston Limited's second quarter delivered operating
results in line with expectations. GWL's investment in Choice
Properties REIT, which recently completed its initial public
offering, and GWL's financial support for Loblaw's acquisition of
Shoppers Drug Mart underscore our strong belief in their ability to
create value for George Weston Limited's shareholders. We are well
positioned in Loblaw, Weston Foods, and Choice Properties REIT to
continue delivering shareholder value", said W. Galen Weston, Executive Chairman, George
Weston Limited.
CONSOLIDATED RESULTS OF
OPERATIONS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
($ millions except where otherwise
indicated) |
|
12 Weeks Ended |
|
|
|
|
|
24 Weeks Ended
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the periods
ended as indicated |
|
Jun. 15, 2013 |
|
|
Jun.
16, 2012(3) |
|
|
Change |
|
|
Jun. 15, 2013 |
|
|
Jun.
16, 2012(3) |
|
|
Change |
Sales |
|
$ |
7,792 |
|
|
$ |
7,627 |
|
|
2.2% |
|
|
$ |
15,286 |
|
|
$ |
14,851 |
|
|
2.9% |
Operating income |
|
$ |
378 |
|
|
$ |
323 |
|
|
17.0% |
|
|
$ |
760 |
|
|
$ |
597 |
|
|
27.3% |
Adjusted operating
income(1) |
|
$ |
392 |
|
|
$ |
364 |
|
|
7.7% |
|
|
$ |
715 |
|
|
$ |
675 |
|
|
5.9% |
Adjusted operating
margin(1) |
|
|
5.0% |
|
|
|
4.8% |
|
|
|
|
|
|
4.7% |
|
|
|
4.5% |
|
|
|
Adjusted EBITDA(1) |
|
$ |
598 |
|
|
$ |
556 |
|
|
7.6% |
|
|
$ |
1,118 |
|
|
$ |
1,051 |
|
|
6.4% |
Adjusted EBITDA
margin(1) |
|
|
7.7% |
|
|
|
7.3% |
|
|
|
|
|
|
7.3% |
|
|
|
7.1% |
|
|
|
Net interest expense and other financing
charges |
|
$ |
150 |
|
|
$ |
77 |
|
|
94.8% |
|
|
$ |
234 |
|
|
$ |
127 |
|
|
84.3% |
Income taxes |
|
$ |
64 |
|
|
$ |
53 |
|
|
20.8% |
|
|
$ |
137 |
|
|
$ |
111 |
|
|
23.4% |
Net earnings attributable to shareholders of the
Company |
|
$ |
98 |
|
|
$ |
135 |
|
|
(27.4)% |
|
|
$ |
260 |
|
|
$ |
256 |
|
|
1.6% |
Basic net earnings per common share ($) |
|
$ |
0.69 |
|
|
$ |
0.98 |
|
|
(29.6)% |
|
|
$ |
1.88 |
|
|
$ |
1.84 |
|
|
2.2% |
Adjusted basic net earnings per
common share(1) ($) |
|
$ |
1.10 |
|
|
$ |
1.05 |
|
|
4.8% |
|
|
$ |
1.98 |
|
|
$ |
1.91 |
|
|
3.7% |
Free cash flow(1) |
|
$ |
409 |
|
|
$ |
363 |
|
|
12.7% |
|
|
$ |
32 |
|
|
$ |
(25) |
|
|
228.0% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pavi Binning, President, George
Weston Limited, commented that "We are pleased with the second
quarter's operating results. Loblaw delivered good sales and
operating performance and made progress in executing its strategy.
Weston Foods achieved improved sales volume growth over last year,
while operating results improved modestly as we continued to invest
in growth, marketing and innovation".
The Company's second quarter 2013 adjusted basic net earnings
per common share(1) were $1.10 compared to $1.05 in the same period in 2012, an increase of
$0.05. The increase was primarily
attributable to the improvement in the operating performance of
Loblaw Companies Limited ("Loblaw"), partially offset by a higher
effective income tax rate(4).
The Company's basic net earnings per common share were
$0.69 compared to $0.98 in the same period in 2012. The decrease
included the year-over-year unfavourable impact of certain items,
including the impact of the forward sale agreement for
9.6 million Loblaw common shares and certain foreign currency
translation, partially offset by the favourable impact of the
multi-employer pension plan ("MEPP") withdrawal liability incurred
by Weston Foods in the second quarter of 2012.
Subsequent to the end of the second quarter of 2013, Choice
Properties Real Estate Investment Trust ("Choice Properties")
completed a $460 million Initial
Public Offering ("IPO"), a public offering of $600 million aggregate principal amount of
senior unsecured debentures (the "Debentures"), and issued
$200 million of trust units (the
"Units") to GWL as described in the "Choice Properties Real Estate
Investment Trust" section of this News Release.
Loblaw recently entered into a definitive agreement to acquire
all of the outstanding common shares of Shoppers Drug Mart
Corporation ("Shoppers Drug Mart") for $33.18 in cash plus 0.5965 of a Loblaw common
share per each Shoppers Drug Mart common share, on a fully
pro-rated basis. Based on Loblaw's closing common share price on
July 12, 2013, this would represent a
purchase price of approximately $12.4 billion. Concurrently, GWL agreed to
subscribe for $500 million of
additional Loblaw common shares, as described in the "Agreement to
Acquire Shoppers Drug Mart Corporation" section of this News
Release.
The Company uses non-GAAP financial measures. See the "Non-GAAP
Financial Measures" section of this News Release for more
information on these non-GAAP financial measures.
REPORTABLE OPERATING SEGMENTS
Weston Foods |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
($ millions except where otherwise indicated) |
|
12 Weeks Ended |
|
|
24 Weeks Ended |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the periods ended as indicated |
|
Jun. 15, 2013 |
|
|
Jun. 16, 2012 |
|
|
Jun. 15, 2013 |
|
|
Jun. 16, 2012 |
|
Sales |
|
$ |
413 |
|
|
$ |
400 |
|
|
$ |
837 |
|
|
$ |
825 |
|
Operating income |
|
$ |
64 |
|
|
$ |
12 |
|
|
$ |
112 |
|
|
$ |
72 |
|
Adjusted operating
income(1) |
|
$ |
66 |
|
|
$ |
65 |
|
|
$ |
125 |
|
|
$ |
124 |
|
Adjusted operating
margin(1) |
|
|
16.0% |
|
|
|
16.3% |
|
|
|
14.9% |
|
|
|
15.0% |
|
Adjusted EBITDA(1) |
|
$ |
81 |
|
|
$ |
78 |
|
|
$ |
154 |
|
|
$ |
151 |
|
Adjusted EBITDA
margin(1) |
|
|
19.6% |
|
|
|
19.5% |
|
|
|
18.4% |
|
|
|
18.3% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weston Foods sales in the second quarter of 2013 increased by
3.3% to $413 million from
$400 million and volumes
increased by 0.7% compared to the same period in 2012.
Excluding the impact of the loss of certain frozen products that
Weston Foods distributed on behalf of certain customers in 2012 and
foreign currency translation, sales increased 4.5% due to the
combined positive impact of pricing and changes in sales mix of
3.0% and an increase in volume of 1.5%.
Weston Foods operating income in the second quarter of 2013 was
$64 million compared to
$12 million in the same period
in 2012, an increase of $52 million. The increase was primarily due
to the favourable year-over-year impact of the MEPP withdrawal
liability of $35 million recorded in
the second quarter of 2012 and the fair value adjustment of
commodity derivatives.
Weston Foods adjusted operating income(1) in the
second quarter of 2013 was $66 million compared to $65 million in the same period in 2012.
Weston Foods adjusted operating margin(1) for the second
quarter of 2013 decreased to 16.0% from 16.3% in the same period in
2012. Adjusted operating income(1) was positively
impacted by higher pricing in key product categories, higher sales
volumes, and the benefits realized from productivity improvements
and other cost reduction initiatives. These benefits were partially
offset by higher commodity and other input costs and increased
investments in growth, marketing and innovation compared to the
same period in 2012.
Loblaw |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
($ millions except where otherwise indicated) |
|
12 Weeks Ended |
|
|
24 Weeks Ended |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the periods ended as indicated |
|
Jun. 15, 2013 |
|
|
Jun. 16, 2012 |
|
|
Jun. 15, 2013 |
|
|
Jun. 16, 2012 |
|
Sales |
|
$ |
7,520 |
|
|
$ |
7,375 |
|
|
$ |
14,722 |
|
|
$ |
14,312 |
|
Operating income |
|
$ |
320 |
|
|
$ |
288 |
|
|
$ |
627 |
|
|
$ |
525 |
|
Adjusted operating
income(1) |
|
$ |
326 |
|
|
$ |
299 |
|
|
$ |
590 |
|
|
$ |
551 |
|
Adjusted operating
margin(1) |
|
|
4.3% |
|
|
|
4.1% |
|
|
|
4.0% |
|
|
|
3.8% |
|
Adjusted EBITDA(1) |
|
$ |
517 |
|
|
$ |
478 |
|
|
$ |
964 |
|
|
$ |
900 |
|
Adjusted EBITDA
margin(1) |
|
|
6.9% |
|
|
|
6.5% |
|
|
|
6.5% |
|
|
|
6.3% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investments made to advance Loblaw's customer proposition again
translated into improved same-store sales performance in an intense
competitive environment. Better mix and good expense management
enabled Loblaw to deliver improved operating performance during the
quarter.
Loblaw sales in the second quarter of 2013 increased by 2.0% to
$7,520 million from $7,375 million in the same period in 2012.
Loblaw's Retail segment sales increased by 1.9% and same-store
sales growth was 1.1% (2012 - 0.2%). Loblaw's average quarterly
internal food price index was flat (2012 - modest inflation) during
the second quarter of 2013, which was lower than the average
quarterly national food price inflation of 1.5% (2012 - 2.5%)
as measured by "The Consumer Price Index for Food Purchased from
Stores". In the last twelve months, corporate and franchise store
square footage increased 0.8%. Loblaw sales in the second quarter
of 2013 were also positively impacted by an increase in revenue
from its Financial Services segment, which includes President's
Choice Bank, a subsidiary of Loblaw.
Loblaw operating income in the second quarter of 2013 was
$320 million compared to
$288 million in the same period
in 2012, an increase of $32 million. Loblaw adjusted operating
income(1) increased by $27
million to $326 million
in the second quarter of 2013 compared to $299 million in the same period in 2012.
Adjusted operating margin(1) was 4.3% compared to 4.1%
in the same period in 2012.
The increase in adjusted operating income(1) was
primarily attributable to increased gross profit from Loblaw's
Retail segment and the impact of foreign exchange, partially offset
by increased operating costs, including depreciation and
amortization. An improvement in Loblaw's Financial Services segment
also contributed to the increase and was mainly attributable
to higher revenue, operational efficiencies and lower costs related
to the renegotiation of vendor contracts, partially offset by
investments in the Mobile Shop business.
NET INTEREST EXPENSE AND OTHER FINANCING CHARGES
In the second quarter of 2013, net interest expense and other
financing charges increased by $73 million to $150 million compared to the same period in
2012. Net interest expense and other financing charges are impacted
by the fair value adjustment of the forward sale agreement for
9.6 million Loblaw common shares. This fair value adjustment
had an unfavourable year-over-year impact of $74 million in the second quarter of
2013.
Excluding this impact, net interest expense and other financing
charges decreased by $1 million
in the second quarter of 2013 compared to the same period in
2012.
INCOME TAXES
In the second quarter of 2013, income tax expense increased to
$64 million from $53 million in the same period in 2012. The
effective income tax rate increased to 28.1% in the second quarter
of 2013 from 21.5% in the same period in 2012, primarily due to an
increase in non-deductible amounts, including non-deductible
foreign currency translation losses (2012 - non-taxable foreign
currency translation gains) and a decrease in income tax recoveries
related to prior year tax matters.
CHOICE PROPERTIES REAL ESTATE INVESTMENT TRUST
Subsequent to the end of the second quarter of 2013, in connection
with its acquisition of approximately $7 billion of properties and related assets
from Loblaw, Choice Properties completed a $460 million IPO of Units, which included
the exercise of a $60 million
over-allotment option. In addition, Choice Properties issued
$200 million of Units to GWL at
a price of $10.00 per Unit.
As a result of its $200 million
direct investment, GWL holds 20,000,000 Units and a 5.6% effective
interest in Choice Properties. After the exercise of the
over-allotment option, Loblaw held approximately 81.7% effective
interest in Choice Properties through ownership of 21,500,000 Units
and 272,497,871 Class B Limited Partnership units, which are
economically equivalent to and exchangeable for Units.
At closing, Loblaw recorded transaction costs of approximately
$40 million in net interest
expense and other financing charges related to the completion of
the IPO.
Concurrent with the offering of Units, Choice Properties
completed a public offering of the Debentures. The Debentures were
comprised of $400 million Series
A Debentures with a 5-year term and a coupon of 3.554% per annum,
and $200 million Series B
Debentures with a 10-year term and a coupon of 4.903% per annum. A
portion of the debt offering proceeds were used to replenish the
cash used to repay the United
States ("U.S.") $150 million private placement ("USPP") note
that matured during the second quarter of 2013 and to early-settle
the remaining U.S. $150 million
USPP note during the third quarter of 2013, including the
associated early-settlement costs of approximately $18 million, which will be recorded in net
interest expense and other financing charges.
AGREEMENT TO ACQUIRE SHOPPERS DRUG MART CORPORATION
Subsequent to the end of the second quarter of 2013, Loblaw entered
into a definitive agreement to acquire all of the outstanding
common shares of Shoppers Drug Mart for $33.18 in cash plus 0.5965 of a Loblaw common
share per each Shoppers Drug Mart common share, on a fully
pro-rated basis. Based on Loblaw's closing common share price on
July 12, 2013, this would represent a
purchase price of approximately $12.4
billion. The Company anticipates that the transaction will
be completed within six to seven months. Completion is subject to
various approvals, including Shoppers Drug Mart shareholder and
court approvals, compliance with the Competition Act
(Canada) and other regulatory
approvals as well as certain other closing conditions customary in
transactions of this nature.
As part of Loblaw's financing, GWL has agreed to subscribe for
approximately $500 million of
additional Loblaw common shares at a price of $47.55 per common share. The proceeds from this
subscription will be used to finance a portion of the cash
consideration payable to shareholders of Shoppers Drug Mart.
In connection with this agreement, Loblaw entered into committed
bank facilities. These committed facilities consist of a
$3.5 billion term loan and a
$1.6 billion bridge loan that will
only be utilized upon completion of the acquisition. As a result of
the agreement and related commitments, Dominion Bond Rating Service
("DBRS") placed the credit ratings of GWL, Loblaw and Choice
Properties under review with developing implications and Standard
& Poor's ("S&P") placed GWL, Loblaw and Choice Properties
on credit watch with negative implications associated with its
Loblaw review. The Company expects DBRS and S&P to complete
their reviews in the upcoming weeks.
OUTLOOK(2)
The outlook reflects the underlying operating performance of the
Company's operating segments as discussed below.
For full year 2013, Weston Foods sales growth is expected to be
moderate due to a combination of pricing and modest volume growth.
Adjusted operating margins(1) are expected to remain in
line with 2012 as Weston Foods invests in growth, marketing
and innovation.
Loblaw continued to make progress in executing its strategy in
the second quarter. The resulting improvement in year-to-date
financial performance compared to the first half of 2012, in
addition to updated expectations for the remainder of the year, has
led management to expect mid-single digit growth in adjusted
operating income(1) in 2013. This revised outlook
compares to the prior expectation for modest, or low-single digit
growth and excludes the impact of the $61
million restructuring charge recorded in the fourth quarter
of 2012, the $51 million gain
recorded in the first quarter of 2013 associated with amendments to
certain defined benefit plans, and the costs associated with the
creation and recently completed IPO of Choice Properties and the
recently announced Shoppers Drug Mart agreement.
Loblaw's information technology ("IT") infrastructure
implementation and related costs, as well as investments in price,
assortment and labour, are expected to be offset by operating
efficiencies.
The Canadian retail environment remains competitive and Loblaw
continues to expect sales growth in 2013 to be moderated by ongoing
competitor square footage expansions, a new competitor's entry into
the market and generic drug deflation.
FORWARD-LOOKING STATEMENTS
This News Release contains forward-looking statements about the
Company's objectives, plans, goals, aspirations, strategies,
financial condition, results of operations, cash flows,
performance, prospects and opportunities. Specific forward-looking
statements in this News Release include, but are not limited to,
statements with respect to the Company's anticipated future
results, status and impact of IT systems implementation, the
Canadian retail environment and future plans. These specific
forward-looking statements are contained throughout this News
Release including, without limitation, in the "Outlook" section.
Forward-looking statements are typically identified by words such
as "expect", "anticipate", "believe", "foresee", "could",
"estimate", "goal", "intend", "plan", "seek", "strive", "will",
"may" and "should" and similar expressions, as they relate to the
Company and its management.
Forward-looking statements reflect the Company's current
estimates, beliefs and assumptions, which are based on management's
perception of historical trends, current conditions and expected
future developments, as well as other factors it believes are
appropriate in the circumstances. The Company's expectation of
operating and financial performance in 2013 is based on certain
assumptions including assumptions about revenue growth, anticipated
cost savings and operating efficiencies, no unanticipated changes
in the effective income tax rates, no unexpected adverse events or
costs related to Loblaw's investments in IT and supply chain, and
no significant unanticipated increase in the price of commodities
and other input costs at Weston Foods that it will not be able to
offset. The Company's estimates, beliefs and assumptions are
inherently subject to significant business, economic, competitive
and other uncertainties and contingencies regarding future events
and as such, are subject to change. The Company can give no
assurance that such estimates, beliefs and assumptions will prove
to be correct.
Numerous risks and uncertainties could cause the Company's
actual results to differ materially from the estimates, beliefs and
assumptions expressed or implied in the forward-looking statements,
including, but not limited to:
- failure to realize anticipated results, including revenue
growth, anticipated cost savings or operating efficiencies from the
Company's major initiatives, including those from
restructuring;
- failure to realize benefits from investments in the Company's
IT systems, including the Company's systems implementation, or
unanticipated results from these initiatives;
- the inability of the Company's IT infrastructure to support the
requirements of the Company's business;
- unanticipated results associated with the Company's strategic
initiatives and the impact of acquisitions or dispositions of
businesses on the Company's future revenues and earnings;
- heightened competition, whether from current competitors or new
entrants to the marketplace;
- changes in economic conditions including the rate of inflation
or deflation, changes in interest and foreign currency exchange
rates and changes in derivative and commodity prices;
- public health events;
- risks associated with product defects, food safety and product
handling;
- failure to achieve desired results in labour negotiations,
including the terms of future collective bargaining agreements
which could lead to work stoppages;
- the inability of the Company to manage inventory to minimize
the impact of obsolete or excess inventory and to control
shrink;
- the impact of potential environmental liabilities;
- failure to respond to changes in consumer tastes and buying
patterns;
- reliance on the performance and retention of third-party
service providers including those associated with the Company's
supply chain and apparel business;
- supply and quality control issues with vendors;
- changes to the regulation of generic prescription drug prices
and the reduction of reimbursement under public drug benefit plans
and the elimination or reduction of professional allowances paid by
drug manufacturers;
- changes in the Company's income, commodity, other tax and
regulatory liabilities including changes in tax laws, regulations
or future assessments;
- any requirement of the Company to make contributions to its
registered funded defined benefit pension plans or the
multi-employer pension plans in which it participates in excess of
those currently contemplated;
- the risk that the Company would experience a financial loss if
its counterparties fail to meet their obligations in accordance
with the terms and conditions of their contracts with the
Company;
- the inability of Loblaw to collect on its credit card
receivables;
- the failure of Choice Properties to execute its plan and
realize its forecasted results; and
- the failure to complete the acquisition of Shoppers Drug Mart
or to realize the anticipated strategic benefits or operational,
competitive or cost synergies.
This is not an exhaustive list of the factors that may affect
the Company's forward-looking statements. Other risks and
uncertainties not presently known to the Company or that the
Company presently believes are not material could also cause actual
results or events to differ materially from those expressed in its
forward-looking statements. Additional risks and uncertainties are
discussed in the Company's materials filed with the Canadian
securities regulatory authorities from time to time, including the
"Enterprise Risks and Risk Management" section of the MD&A
included in the Company's 2013 Second Quarter Report to
Shareholders and Section 13, "Enterprise Risks and Risk
Management", of the MD&A included in the Company's 2012 Annual
Report. Readers are cautioned not to place undue reliance on these
forward-looking statements, which reflect the Company's
expectations only as of the date of this News Release. Except as
required by law, the Company does not undertake to update or revise
any forward-looking statements, whether as a result of new
information, future events or otherwise.
NON-GAAP FINANCIAL MEASURES
The Company uses the following non-GAAP financial measures:
adjusted operating income and adjusted operating margin, adjusted
EBITDA and adjusted EBITDA margin, adjusted basic net earnings per
common share and free cash flow. The Company believes these
non-GAAP financial measures provide useful information to both
management and investors in measuring the financial performance of
the Company for the reasons outlined below.
Certain expenses and income that must be recognized under GAAP
are not necessarily reflective of the Company's underlying
operating performance. For this reason, management uses certain
non-GAAP financial measures to exclude the impact of these items
when analyzing consolidated and segment underlying operating
performance. These non-GAAP financial measures are also helpful in
assessing underlying operating performance on a consistent
basis.
From time to time, the Company may exclude additional items if
it believes doing so would result in a more effective analysis of
underlying operating performance. The exclusion of certain items
does not imply that they are non-recurring. Loblaw does not report
its results of operations on an adjusted basis, however the Company
excludes the impact of certain Loblaw items, as applicable, when
reporting its consolidated and segment results.
These non-GAAP financial measures do not have a standardized
meaning prescribed by GAAP and therefore they may not be comparable
to similarly titled measures presented by other publicly traded
companies, and they should not be construed as an alternative to
other financial measures determined in accordance with GAAP.
Adjusted Operating Income and Adjusted EBITDA
The Company believes adjusted operating income is useful in
assessing the Company's underlying operating performance and in
making decisions regarding the ongoing operations of its business.
The Company believes adjusted EBITDA is also useful in assessing
the underlying operating performance of the Company's ongoing
operations and in assessing the Company's ability to generate cash
flows to fund its cash requirements, including its capital
investment program.
The following tables reconcile adjusted operating income and
adjusted EBITDA to GAAP net earnings attributable to shareholders
of the Company reported for the periods ended as indicated.
|
|
12 Weeks Ended
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Jun. 15, 2013 |
|
|
|
|
Jun. 16,
2012(i) |
(unaudited)
($ millions) |
|
Weston
Foods |
|
Loblaw |
|
Other(ii) |
|
Consolidated |
|
Weston
Foods |
|
Loblaw |
|
Other(ii) |
|
Consolidated |
Net earnings attributable to shareholders of
the Company |
|
|
|
|
|
|
|
|
|
|
$ |
98 |
|
|
|
|
|
|
|
|
|
|
$ |
135 |
Add impact of the following: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-controlling interests |
|
|
|
|
|
|
|
|
|
|
|
66 |
|
|
|
|
|
|
|
|
|
|
|
58 |
Income taxes |
|
|
|
|
|
|
|
|
|
|
|
64 |
|
|
|
|
|
|
|
|
|
|
|
53 |
Net interest expense and other financing
charges |
|
|
|
|
|
|
|
|
|
|
|
150 |
|
|
|
|
|
|
|
|
|
|
|
77 |
Operating income (loss) |
|
$ |
64 |
|
$ |
320 |
|
$ |
(6) |
|
$ |
378 |
|
$ |
12 |
|
$ |
288 |
|
$ |
23 |
|
$ |
323 |
Add (deduct) impact of the following: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring and other
charges(iii) |
|
|
1 |
|
|
|
|
|
|
|
|
1 |
|
|
5 |
|
|
6 |
|
|
|
|
|
11 |
Fair value adjustment of commodity derivatives at
Weston Foods |
|
|
(1) |
|
|
|
|
|
|
|
|
(1) |
|
|
7 |
|
|
|
|
|
|
|
|
7 |
Share-based compensation net of equity
derivatives |
|
|
2 |
|
|
6 |
|
|
|
|
|
8 |
|
|
6 |
|
|
5 |
|
|
|
|
|
11 |
MEPP withdrawal liability incurred by Weston
Foods |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
35 |
|
|
|
|
|
|
|
|
35 |
Foreign currency translation loss (gain) |
|
|
|
|
|
|
|
|
6 |
|
|
6 |
|
|
|
|
|
|
|
|
(23) |
|
|
(23) |
Adjusted operating income |
|
$ |
66 |
|
$ |
326 |
|
$ |
|
|
$ |
392 |
|
$ |
65 |
|
$ |
299 |
|
$ |
|
|
$ |
364 |
Depreciation and amortization |
|
|
15 |
|
|
191 |
|
|
|
|
|
206 |
|
|
13 |
|
|
179 |
|
|
|
|
|
192 |
Adjusted EBITDA |
|
$ |
81 |
|
$ |
517 |
|
$ |
|
|
$ |
598 |
|
$ |
78 |
|
$ |
478 |
|
$ |
|
|
$ |
556 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(i) |
Certain 2012 figures have been restated due to the
implementation of revised International Accounting Standard ("IAS")
19, "Employee Benefits". See note 2 of the Company's condensed
consolidated financial statements included in the 2013 Second
Quarter Report to Shareholders. |
(ii) |
Operating income in the second quarter of 2013 included a loss
of $6 million (2012 - gain of $23 million) related to the
effect of foreign currency translation on a portion of the U.S.
dollar denominated cash and short term investments held by foreign
operations. |
(iii) |
Restructuring and other charges included $1 million (2012
- $1 million) of accelerated depreciation incurred by Weston
Foods. Other charges at Loblaw in the second quarter of 2012 of
$6 million related to changes in Loblaw's distribution
network. |
|
24 Weeks
Ended |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Jun. 15, 2013 |
|
|
|
|
Jun. 16,
2012(i) |
(unaudited)
($ millions) |
|
Weston
Foods |
|
Loblaw |
|
Other(ii) |
|
Consolidated |
|
|
Weston
Foods |
|
Loblaw |
|
Other(ii) |
|
Consolidated |
Net earnings attributable to shareholders of the
Company |
|
|
|
|
|
|
|
|
|
|
$ |
260 |
|
|
|
|
|
|
|
|
|
|
|
$ |
256 |
Add impact of the following: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-controlling interests |
|
|
|
|
|
|
|
|
|
|
|
129 |
|
|
|
|
|
|
|
|
|
|
|
|
103 |
Income taxes |
|
|
|
|
|
|
|
|
|
|
|
137 |
|
|
|
|
|
|
|
|
|
|
|
|
111 |
Net interest expense and other financing
charges |
|
|
|
|
|
|
|
|
|
|
|
234 |
|
|
|
|
|
|
|
|
|
|
|
|
127 |
Operating income |
|
$ |
112 |
|
$ |
627 |
|
$ |
21 |
|
$ |
760 |
|
|
$ |
72 |
|
$ |
525 |
|
$ |
|
|
$ |
597 |
Add (deduct) impact of the following: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring and other
charges(iii) |
|
|
2 |
|
|
|
|
|
|
|
|
2 |
|
|
|
6 |
|
|
9 |
|
|
|
|
|
15 |
Fair value adjustment of commodity derivatives at
Weston Foods |
|
|
7 |
|
|
|
|
|
|
|
|
7 |
|
|
|
4 |
|
|
|
|
|
|
|
|
4 |
Share-based compensation net of equity
derivatives |
|
|
4 |
|
|
14 |
|
|
|
|
|
18 |
|
|
|
7 |
|
|
17 |
|
|
|
|
|
24 |
Defined benefit plan amendments |
|
|
|
|
|
(51) |
|
|
|
|
|
(51) |
|
|
|
|
|
|
|
|
|
|
|
|
|
MEPP withdrawal liability incurred by Weston
Foods |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
35 |
|
|
|
|
|
|
|
|
35 |
Foreign currency translation gain |
|
|
|
|
|
|
|
|
(21) |
|
|
(21) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted operating income |
|
$ |
125 |
|
$ |
590 |
|
$ |
|
|
$ |
715 |
|
|
$ |
124 |
|
$ |
551 |
|
$ |
|
|
$ |
675 |
Depreciation and amortization |
|
|
29 |
|
|
374 |
|
|
|
|
|
403 |
|
|
|
27 |
|
|
349 |
|
|
|
|
|
376 |
Adjusted EBITDA |
|
$ |
154 |
|
$ |
964 |
|
$ |
|
|
$ |
1,118 |
|
|
$ |
151 |
|
$ |
900 |
|
$ |
|
|
$ |
1,051 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(i) |
Certain 2012 figures have been restated due to the
implementation of revised IAS 19, "Employee Benefits". See note 2
of the Company's condensed consolidated financial statements
included in the 2013 Second Quarter Report to Shareholders. |
(ii) |
Year-to-date operating income included a gain of
$21 million (2012 - nominal gain) related to the effect of
foreign currency translation on a portion of the U.S. dollar
denominated cash and short term investments held by foreign
operations. |
(iii) |
Year-to-date restructuring and other charges included
$2 million (2012 - $1 million) of accelerated
depreciation incurred by Weston Foods. Year-to-date other
charges at Loblaw in 2012 of $9 million related to changes in
Loblaw's distribution network. |
The year-over-year changes in the following items influenced
operating income in the second quarter of 2013:
Restructuring and other charges The
Company continuously evaluates strategic and cost reduction
initiatives related to its store infrastructure, manufacturing
assets, distribution networks and administrative infrastructure
with the objective of ensuring a low cost operating structure.
Restructuring activities related to these initiatives are ongoing.
The details of restructuring and other charges are included in the
"Reportable Operating Segments" section of the MD&A included in
the Company's 2013 Second Quarter Report to Shareholders.
Fair value adjustment of commodity derivatives at Weston
Foods Weston Foods is exposed to commodity price
fluctuations primarily as a result of purchases of certain raw
materials, fuels and utilities. In accordance with the Company's
risk management policy, Weston Foods enters into commodity
derivatives to reduce the impact of price fluctuations in
forecasted raw material purchases over a specified period of time.
These commodity derivatives are not acquired for trading or
speculative purposes. Pursuant to Weston Foods' derivative
instruments accounting policy, certain changes in fair value, which
include realized and unrealized gains and losses related to future
purchases of raw materials, are recorded in operating income. In
the second quarter of 2013, Weston Foods recorded income of
$1 million (2012 - charge of
$7 million) related to the fair
value adjustment of exchange traded commodity derivatives. Despite
the impact of accounting for these commodity derivatives on the
Company's reported results, the derivatives have the economic
impact of largely mitigating the associated risks arising from
price fluctuations in the underlying commodities during the period
that the commodity derivatives are held.
Share-based compensation net of equity derivatives
GWL and Glenhuron Bank Limited ("Glenhuron") held equity
derivatives to partially hedge the impact of increases in the value
of GWL and Loblaw common shares on share-based compensation cost.
The amount of net share-based compensation cost recorded in
operating income has historically been mainly dependent upon
changes in the value of GWL and Loblaw common shares and the number
and vesting of Restricted Share Units ("RSUs") and Performance
Share Units ("PSUs") relative to the number of common shares
underlying the equity derivatives. In the first quarter of 2013,
GWL and Glenhuron settled their remaining equity derivative
contracts and the RSU and PSU plans were amended to require
settlement in common shares rather than in cash. As a result of the
settlements and plan amendments, the components of share-based
compensation and their exposure to changes in the value of GWL and
Loblaw common shares have changed. In order to assess consolidated
and segment operating performance on a consistent basis, management
continues to exclude the impact of share-based compensation from
operating income. In the second quarter of 2013, a charge of
$8 million (2012 - $11 million) was recorded related to
share-based compensation net of equity derivatives.
Multi-employer pension plan withdrawal liability incurred
by Weston Foods In the second quarter of 2012, Weston
Foods recorded a charge of $35 million related to its withdrawal from
one of the U.S. MEPPs in which it participated.
Foreign currency translation losses and
gains The Company's consolidated financial statements
are expressed in Canadian dollars. A portion of the Company's
(excluding Loblaw's) net assets are denominated in U.S. dollars and
as a result, the Company is exposed to foreign currency translation
losses and gains. The impact of foreign currency translation on a
portion of the U.S. dollar denominated net assets, primarily cash
and short term investments held by foreign operations, is recorded
in operating income. In the second quarter of 2013, a foreign
currency translation loss of $6 million (2012 - gain of $23 million) was recorded in operating
income as a result of the appreciation (2012 - depreciation) of the
Canadian dollar.
Adjusted Basic Net Earnings per Common Share
The Company believes adjusted basic net earnings per common share
is useful in assessing the Company's underlying operating
performance and in making decisions regarding the ongoing
operations of its business.
The following table reconciles adjusted basic net earnings per
common share to GAAP basic net earnings per common share reported
for the periods ended as indicated.
(unaudited) |
|
12 Weeks Ended |
|
|
24 Weeks Ended
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
($) |
|
Jun. 15, 2013 |
Jun. 16,
2012(i) |
|
|
|
Jun. 15, 2013 |
Jun. 16,
2012(i) |
Basic net earnings per common share |
|
$ |
0.69 |
|
$ |
0.98 |
|
|
|
$ |
1.88 |
|
|
$ |
|
1.84 |
Add (Deduct) impact of the
following(ii): |
|
|
|
|
|
|
|
|
|
|
Fair value adjustment of the forward sale
agreement for 9.6 million Loblaw common shares |
|
0.34 |
|
(0.09) |
|
|
|
0.31 |
|
|
|
(0.34) |
Restructuring and other charges |
|
|
0.05 |
|
|
|
0.01 |
|
|
|
0.07 |
Fair value adjustment of commodity derivatives at
Weston Foods |
|
(0.01) |
|
0.04 |
|
|
|
0.04 |
|
|
|
0.02 |
Share-based compensation net of equity
derivatives |
|
0.03 |
|
0.08 |
|
|
|
0.08 |
|
|
|
0.15 |
Defined benefit plan amendments |
|
|
|
|
|
(0.18) |
|
|
|
|
|
MEPP withdrawal liability incurred by Weston
Foods |
|
|
0.17 |
|
|
|
|
|
|
|
0.17 |
Foreign currency translation loss (gain) |
|
0.05 |
|
(0.18) |
|
|
|
(0.16) |
|
|
|
|
|
Adjusted basic net earnings per common share |
|
$ |
1.10 |
|
$ |
1.05 |
|
|
|
$ |
1.98 |
|
|
$ |
|
1.91 |
|
|
|
|
|
|
|
|
|
|
|
|
|
(i) |
Certain 2012 figures have been
restated due to the implementation of revised IAS 19, "Employee
Benefits". See note 2 of the Company's condensed consolidated
financial statements included in the 2013 Second Quarter Report to
Shareholders. |
(ii) |
Net of interest, income taxes and
non-controlling interests, as applicable. |
In addition to the items described in the "Adjusted Operating
Income and Adjusted EBITDA" section above, the year-over-year
changes in the following item also influenced basic net earnings
per common share in the second quarter of 2013:
Fair value adjustment of the forward sale agreement for
9.6 million Loblaw common shares The fair
value adjustment of the forward sale agreement for 9.6 million
Loblaw common shares is non-cash and is included in consolidated
net interest expense and other financing charges. The adjustment is
determined by changes in the value of the underlying Loblaw common
shares. In the second quarter of 2013, a charge of $0.34 (2012 - income of $0.09) was recorded in net interest expense and
other financing charges as a result of the increase (2012 -
decrease) in the market price of Loblaw common shares.
Free Cash Flow
In the first quarter of 2013, the Company refined its definition of
free cash flow as calculated below. The Company believes that this
definition of free cash flow is the appropriate measure in
assessing the Company's cash available for additional funding and
investing activities.
The following table reconciles free cash flow to GAAP measures
reported for the periods ended as indicated.
(unaudited) |
|
12 Weeks Ended |
|
|
24 Weeks Ended |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
($ millions) |
|
Jun. 15,
2013 |
|
Jun. 16, 2012 |
|
|
Jun. 15,
2013 |
|
Jun. 16, 2012 |
Cash flows from operating
activities |
|
$ |
633 |
|
|
$ |
|
663 |
|
|
|
$ |
613 |
|
$ |
625 |
Change in credit card receivables |
|
104 |
|
|
|
71 |
|
|
|
(26) |
|
(43) |
Less: |
Interest paid |
|
115 |
|
|
|
117 |
|
|
|
208 |
|
209 |
|
Fixed asset purchases |
|
213 |
|
|
|
254 |
|
|
|
347 |
|
398 |
Free cash flow |
|
$ |
409 |
|
|
$ |
|
363 |
|
|
|
$ |
32 |
|
$ |
(25) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SELECTED FINANCIAL INFORMATION
The following includes selected quarterly financial information
which is prepared by management in accordance with International
Financial Reporting Standards ("IFRS") and is based on the
Company's 2013 Second Quarter Report to Shareholders. This
financial information does not contain all disclosures required by
IFRS, and accordingly, this financial information should be read in
conjunction with the Company's 2012 Annual Report and 2013 Second
Quarter Report to Shareholders available in the Investor Centre
section of the Company's website at www.weston.ca.
Condensed Consolidated Statements of Earnings
(unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
(millions of Canadian dollars |
12 Weeks Ended |
24 Weeks Ended
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
except where otherwise
indicated) |
Jun. 15,
2013 |
Jun. 16, 2012(3) |
|
|
Jun. 15,
2013 |
Jun. 16, 2012(3) |
Revenue |
|
$ |
7,792 |
|
|
|
$ |
7,627 |
|
|
|
$ |
15,286 |
|
|
|
$ |
14,851 |
|
|
Operating Expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of inventories sold |
|
5,866 |
|
|
|
5,751 |
|
|
|
11,491 |
|
|
|
11,173 |
|
|
|
Selling, general and administrative expenses |
|
1,548 |
|
|
|
1,553 |
|
|
|
3,035 |
|
|
|
3,081 |
|
|
|
|
7,414 |
|
|
|
7,304 |
|
|
|
14,526 |
|
|
|
14,254 |
|
|
Operating Income |
|
378 |
|
|
|
323 |
|
|
|
760 |
|
|
|
597 |
|
|
Net Interest Expense and Other
Financing Charges |
|
150 |
|
|
|
77 |
|
|
|
234 |
|
|
|
127 |
|
|
Earnings Before Income
Taxes |
|
228 |
|
|
|
246 |
|
|
|
526 |
|
|
|
470 |
|
|
Income Taxes |
|
64 |
|
|
|
53 |
|
|
|
137 |
|
|
|
111 |
|
|
Net Earnings |
|
164 |
|
|
|
193 |
|
|
|
389 |
|
|
|
359 |
|
|
Attributable to: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders of the Company |
|
98 |
|
|
|
135 |
|
|
|
260 |
|
|
|
256 |
|
|
|
Non-Controlling Interests |
|
66 |
|
|
|
58 |
|
|
|
129 |
|
|
|
103 |
|
|
Net Earnings |
|
$ |
164 |
|
|
|
$ |
193 |
|
|
|
$ |
389 |
|
|
|
$ |
359 |
|
|
Net Earnings per Common Share
($) |
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
0.69 |
|
|
|
$ |
0.98 |
|
|
|
$ |
1.88 |
|
|
|
$ |
1.84 |
|
|
Diluted |
|
$ |
0.68 |
|
|
|
$ |
0.97 |
|
|
|
$ |
1.86 |
|
|
|
$ |
1.83 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Condensed Consolidated Balance Sheets
(unaudited) |
As
at |
(millions of Canadian
dollars) |
Jun. 15, 2013 |
Jun. 16,
2012(3) |
|
|
Dec. 31,
2012(3) |
ASSETS |
|
|
|
|
|
|
|
|
|
Current Assets |
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
1,028 |
|
|
|
$ |
1,559 |
|
|
|
$ |
1,589 |
|
|
|
Short term investments |
|
2,457 |
|
|
|
2,042 |
|
|
|
2,138 |
|
|
|
Accounts receivable |
|
598 |
|
|
|
557 |
|
|
|
559 |
|
|
|
Credit card receivables |
|
2,279 |
|
|
|
2,058 |
|
|
|
2,305 |
|
|
|
Inventories |
|
2,129 |
|
|
|
1,996 |
|
|
|
2,132 |
|
|
|
Income taxes recoverable |
|
|
|
|
53 |
|
|
|
37 |
|
|
|
Prepaid expenses and other assets |
|
157 |
|
|
|
154 |
|
|
|
83 |
|
|
|
Assets held for sale |
|
26 |
|
|
|
23 |
|
|
|
30 |
|
|
Total Current Assets |
|
8,674 |
|
|
|
8,442 |
|
|
|
8,873 |
|
|
Fixed Assets |
|
9,436 |
|
|
|
9,219 |
|
|
|
9,452 |
|
|
Investment Properties |
|
97 |
|
|
|
95 |
|
|
|
100 |
|
|
Goodwill and Intangible Assets |
|
1,577 |
|
|
|
1,587 |
|
|
|
1,571 |
|
|
Deferred Income Taxes |
|
313 |
|
|
|
336 |
|
|
|
316 |
|
|
Security Deposits |
|
315 |
|
|
|
341 |
|
|
|
348 |
|
|
Franchise Loans Receivable |
|
365 |
|
|
|
358 |
|
|
|
363 |
|
|
Other Assets |
|
679 |
|
|
|
822 |
|
|
|
781 |
|
|
Total Assets |
|
$ |
21,456 |
|
|
|
$ |
21,200 |
|
|
|
$ |
21,804 |
|
|
LIABILITIES |
|
|
|
|
|
|
|
|
|
Current Liabilities |
|
|
|
|
|
|
|
|
|
|
Trade payables and other liabilities |
|
$ |
3,620 |
|
|
|
$ |
3,587 |
|
|
|
$ |
3,937 |
|
|
|
Provisions |
|
97 |
|
|
|
71 |
|
|
|
123 |
|
|
|
Income taxes payable |
|
2 |
|
|
|
|
|
|
|
|
|
Short term debt |
|
1,339 |
|
|
|
1,299 |
|
|
|
1,319 |
|
|
|
Long term debt due within one year |
|
1,325 |
|
|
|
226 |
|
|
|
672 |
|
|
Total Current Liabilities |
|
6,383 |
|
|
|
5,183 |
|
|
|
6,051 |
|
|
Provisions |
|
96 |
|
|
|
88 |
|
|
|
94 |
|
|
Long Term Debt |
|
5,450 |
|
|
|
6,633 |
|
|
|
6,261 |
|
|
Deferred Income Taxes |
|
151 |
|
|
|
167 |
|
|
|
160 |
|
|
Other Liabilities |
|
827 |
|
|
|
1,090 |
|
|
|
943 |
|
|
Capital Securities |
|
223 |
|
|
|
222 |
|
|
|
223 |
|
|
Total Liabilities |
|
13,130 |
|
|
|
13,383 |
|
|
|
13,732 |
|
|
EQUITY |
|
|
|
|
|
|
|
|
|
Share Capital |
|
967 |
|
|
|
950 |
|
|
|
953 |
|
|
Contributed Surplus |
|
48 |
|
|
|
21 |
|
|
|
28 |
|
|
Retained Earnings |
|
4,841 |
|
|
|
4,594 |
|
|
|
4,736 |
|
|
Accumulated Other Comprehensive
Loss |
|
(16) |
|
|
|
(10) |
|
|
|
(24) |
|
|
Total Equity Attributable to
Shareholders of the Company |
|
5,840 |
|
|
|
5,555 |
|
|
|
5,693 |
|
|
Non-Controlling Interests |
|
2,486 |
|
|
|
2,262 |
|
|
|
2,379 |
|
|
Total Equity |
|
8,326 |
|
|
|
7,817 |
|
|
|
8,072 |
|
|
Total Liabilities and
Equity |
|
$ |
21,456 |
|
|
|
$ |
21,200 |
|
|
|
$ |
21,804 |
|
|
|
|
|
|
|
|
|
|
|
|
Condensed Consolidated Statements of Cash Flow
(unaudited) |
12 Weeks Ended |
|
24 Weeks Ended |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(millions of Canadian
dollars) |
Jun. 15, 2013 |
|
Jun. 16,
2012(3) |
|
Jun. 15, 2013 |
|
Jun. 16,
2012(3) |
Operating Activities |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings |
|
$ |
164 |
|
$ |
193 |
|
$ |
389 |
|
$ |
359 |
|
Income taxes |
|
|
64 |
|
|
53 |
|
|
137 |
|
|
111 |
|
Net interest expense and
other |
|
|
|
|
|
|
|
|
|
|
|
|
|
financing charges |
|
|
150 |
|
|
77 |
|
|
234 |
|
|
127 |
|
Depreciation and amortization |
|
|
207 |
|
|
193 |
|
|
405 |
|
|
377 |
|
Foreign currency translation loss
(gain) |
|
|
6 |
|
|
(23) |
|
|
(21) |
|
|
|
|
Gain on defined benefit plan
amendments |
|
|
|
|
|
|
|
|
(51) |
|
|
|
|
Income taxes paid |
|
|
(66) |
|
|
(63) |
|
|
(118) |
|
|
(136) |
|
Interest received |
|
|
18 |
|
|
25 |
|
|
31 |
|
|
34 |
|
Settlement of derivatives |
|
|
8 |
|
|
|
|
|
(37) |
|
|
|
|
Change in credit card receivables |
|
|
(104) |
|
|
(71) |
|
|
26 |
|
|
43 |
|
Change in non-cash working
capital |
|
|
188 |
|
|
292 |
|
|
(382) |
|
|
(288) |
|
Fixed asset and other related
impairments |
|
|
6 |
|
|
|
|
|
6 |
|
|
3 |
|
Gain on disposal of assets |
|
|
|
|
|
(2) |
|
|
(1) |
|
|
(2) |
|
Other |
|
|
(8) |
|
|
(11) |
|
|
(5) |
|
|
(3) |
Cash Flows from Operating
Activities |
|
|
633 |
|
|
663 |
|
|
613 |
|
|
625 |
Investing Activities |
|
|
|
|
|
|
|
|
|
|
|
|
|
Fixed asset purchases |
|
|
(213) |
|
|
(254) |
|
|
(347) |
|
|
(398) |
|
Change in short term investments |
|
|
(51) |
|
|
217 |
|
|
(286) |
|
|
320 |
|
Business acquisition |
|
|
|
|
|
|
|
|
(9) |
|
|
|
|
Proceeds from fixed asset sales |
|
|
9 |
|
|
15 |
|
|
11 |
|
|
16 |
|
Change in franchise investments
and |
|
|
|
|
|
|
|
|
|
|
|
|
|
other receivables |
|
|
17 |
|
|
20 |
|
|
25 |
|
|
3 |
|
Change in security deposits |
|
|
(13) |
|
|
12 |
|
|
36 |
|
|
26 |
|
Intangible asset additions |
|
|
|
|
|
(41) |
|
|
(9) |
|
|
(41) |
|
Other |
|
|
|
|
|
|
|
|
(3) |
|
|
|
Cash Flows used in Investing
Activities |
|
|
(251) |
|
|
(31) |
|
|
(582) |
|
|
(74) |
Financing Activities |
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in bank indebtedness |
|
|
|
|
|
1 |
|
|
|
|
|
(3) |
|
Change in short term debt |
|
|
9 |
|
|
9 |
|
|
20 |
|
|
19 |
|
Long term debt |
- Issued |
|
|
|
|
|
14 |
|
|
10 |
|
|
37 |
|
|
- Retired |
|
|
(198) |
|
|
(44) |
|
|
(224) |
|
|
(73) |
|
Share capital |
- Issued |
|
|
13 |
|
|
|
|
|
13 |
|
|
|
|
|
- Purchased and |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
held in trust |
|
|
|
|
|
|
|
|
(15) |
|
|
|
|
|
- Retired |
|
|
|
|
|
|
|
|
(42) |
|
|
|
|
Subsidiary share capital |
- Issued |
|
|
44 |
|
|
2 |
|
|
55 |
|
|
4 |
|
|
- Purchased and |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
held in trust |
|
|
|
|
|
|
|
|
(46) |
|
|
|
|
|
- Retired |
|
|
|
|
|
(2) |
|
|
|
|
|
(4) |
|
Interest paid |
|
|
(115) |
|
|
(117) |
|
|
(208) |
|
|
(209) |
|
Dividends |
- To common shareholders |
|
|
(48) |
|
|
(46) |
|
|
(97) |
|
|
(92) |
|
|
- To preferred shareholders |
|
|
(8) |
|
|
(11) |
|
|
(19) |
|
|
(22) |
|
|
- To minority shareholders |
|
|
(23) |
|
|
(22) |
|
|
(46) |
|
|
(22) |
Cash Flows used in Financing
Activities |
|
|
(326) |
|
|
(216) |
|
|
(599) |
|
|
(365) |
Effect of foreign currency exchange
rate |
|
|
|
|
|
|
|
|
|
|
|
|
changes on cash and cash equivalents
|
|
|
(3) |
|
|
9 |
|
|
7 |
|
|
1 |
Change in Cash and Cash
Equivalents |
|
|
53 |
|
|
425 |
|
|
(561) |
|
|
187 |
Cash and Cash Equivalents,
Beginning |
|
|
|
|
|
|
|
|
|
|
|
|
|
of Period |
|
|
975 |
|
|
1,134 |
|
|
1,589 |
|
|
1,372 |
Cash and Cash Equivalents, End of
Period |
|
$ |
1,028 |
|
$ |
1,559 |
|
$ |
1,028 |
|
$ |
1,559 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2013 SECOND QUARTER REPORT TO SHAREHOLDERS
The Company's 2012 Annual Report and 2013 Second Quarter Report to
Shareholders are available in the Investor Centre section of the
Company's website at www.weston.ca and have been filed with SEDAR
and will be available at www.sedar.com.
INVESTOR RELATIONS
Shareholders, security analysts and investment professionals should
direct their requests to Mr. Geoffrey H.
Wilson, Senior Vice President, Financial Control and
Investor Relations, at the Company's Executive Office or by e-mail
at investor@weston.ca.
Additional financial information has been filed electronically
with the Canadian securities regulatory authorities in Canada through SEDAR. This News Release
includes selected information on Loblaw, a 62.8%-owned public
reporting subsidiary company with shares trading on the Toronto
Stock Exchange. For information regarding Loblaw, readers should
also refer to the materials filed by Loblaw with the Canadian
securities regulatory authorities from time to time. These filings
are also maintained at Loblaw's corporate website at
www.loblaw.ca.
CONFERENCE CALL AND WEBCAST PRESENTATION
George Weston Limited will host a conference call as well as an
audio webcast on Tuesday, July
30, 2013 at 11:00 a.m.
(EST). To access via tele-conference, please dial
(647) 427-7450. The playback will be available two hours after
the event at (416) 849-0833, passcode: 99837590#. To access via
audio webcast, please visit the Investor Centre section of
www.weston.ca. Pre-registration will be available.
|
|
Footnote
Legend |
|
|
(1) |
See non-GAAP financial measures. |
(2) |
This News Release contains
forward-looking information. See Forward-Looking Statements of this
News Release for a discussion of material factors that could cause
actual results to differ materially from the forecasts and
projections herein and of the material factors, estimates, beliefs
and assumptions that were applied in presenting the conclusions,
forecasts and projections presented herein. This News Release must
be read in conjunction with George Weston Limited's filings with
securities regulators made from time to time, all of which can be
found at www.weston.ca and www.sedar.com. |
(3) |
Certain 2012 figures have been
restated due to the implementation of revised IAS 19, "Employee
Benefits". See note 2 of the Company's condensed consolidated
financial statements included in the 2013 Second Quarter Report
to Shareholders. |
(4) |
Effective income tax rate excludes
the tax impact of items excluded from adjusted basic net earnings
per common share(1). |
|
|
SOURCE George Weston Limited