TORONTO, May 12, 2015 /CNW/ - George Weston Limited (TSX:
WN) ("GWL" or the "Company") today announced its consolidated
unaudited results for the 12 weeks ended March 28, 2015. The Company's first quarter
2015 results include the results of Shoppers Drug Mart Corporation
("Shoppers Drug Mart") as well as the associated
acquisition-related accounting adjustments.
GWL's 2015 First Quarter Report to Shareholders has been
filed with SEDAR and is available at sedar.com and in the
Investor Centre section of the Company's website at weston.ca.
"George Weston Limited continues to focus on creating long term
shareholder value and today, for the third consecutive year, we
announced a dividend increase. We continue to execute against the
strategic initiatives set by each of the Company's operating
segments to deliver stable, long term growth and profitability",
said W. Galen Weston, Executive
Chairman, George Weston Limited.
2015 FIRST QUARTER HIGHLIGHTS
- Sales of $10,409 million, an
increase of $2,797 million or
36.7%.
- Adjusted EBITDA(1) of $850 million, an increase of $302 million or 55.1%.
- Adjusted operating income(1) of $586 million, an increase of $249 million or 73.9%.
- Adjusted basic net earnings per common share(1) of
$1.19, an increase of $0.30 or 33.7%.
- Free cash flow(1) of $81 million.
- Quarterly common share dividend increase of approximately 1.2%
from $0.42 per common share to
$0.425 per common share.
(unaudited) |
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12 Weeks Ended |
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($ millions except where otherwise indicated) |
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For the periods ended as
indicated |
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Mar. 28, 2015 |
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Mar.
22, 2014(3) |
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|
Change |
Sales |
|
$ |
10,409 |
|
|
$ |
7,612 |
|
|
36.7% |
EBITDA(1) |
|
$ |
907 |
|
|
$ |
589 |
|
|
54.0% |
Adjusted EBITDA(1) |
|
$ |
850 |
|
|
$ |
548 |
|
|
55.1% |
Adjusted EBITDA
margin(1) |
|
|
8.2% |
|
|
|
7.2% |
|
|
|
Operating income |
|
$ |
519 |
|
|
$ |
378 |
|
|
37.3% |
Adjusted operating
income(1) |
|
$ |
586 |
|
|
$ |
337 |
|
|
73.9% |
Adjusted operating
margin(1) |
|
|
5.6% |
|
|
|
4.4% |
|
|
|
Net earnings attributable to
shareholders of the Company |
|
$ |
167 |
|
|
$ |
120 |
|
|
39.2% |
Adjusted net earnings attributable
to shareholders of the Company(1) |
|
$ |
162 |
|
|
$ |
124 |
|
|
30.6% |
Basic net earnings per common
share ($) |
|
$ |
1.23 |
|
|
$ |
0.86 |
|
|
43.0% |
Adjusted basic net earnings per
common share(1) ($) |
|
$ |
1.19 |
|
|
$ |
0.89 |
|
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33.7% |
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Pavi Binning, President, George
Weston Limited, commented that "We are pleased with George Weston
Limited's first quarter results as the performance of both of the
Company's operating segments was in-line with expectations. Loblaw
delivered solid operating and financial performance in highly
competitive grocery and pharmacy industries. Weston Foods delivered
volume growth and higher sales across all business units, while
operating income reflected the impact of increased capital
expenditures and incremental investments in capabilities and
innovation".
GWL's first quarter 2015 adjusted basic net earnings per common
share(1) increased to $1.19 from $0.89 in the same period in 2014. The
improvement of $0.30 was primarily
due to an increase in Loblaw Companies Limited ("Loblaw") earnings
offset by the reduction in the Company's ownership as a result of
the shares issued by Loblaw to acquire Shoppers Drug Mart. Loblaw
earnings were positively impacted in the first quarter of 2015 by
Shoppers Drug Mart results, partially offset by higher interest
expense driven by the financing associated with the acquisition of
Shoppers Drug Mart.
Basic net earnings per common share increased by $0.37 to $1.23
compared to the same period in 2014, and were impacted by the
following significant items:
- the favourable year-over-year impact of the fair value
adjustment of the forward sale agreement for 9.6 million
Loblaw common shares of $52 million
($0.31 per common share); and
- the favourable year-over-year impact of foreign currency
translation of $23 million
($0.11 per common share);
partially offset by
- the amortization of the acquired Shoppers Drug Mart intangible
assets of $124 million
($0.32 per common share).
For a complete list of items that impacted basic net earnings
per common share but that are excluded from adjusted basic net
earnings per common share(1), see the "Non-GAAP
Financial Measures" section of this News Release.
REPORTABLE OPERATING SEGMENTS
Weston Foods |
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(unaudited) |
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12 Weeks Ended |
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($ millions except where otherwise indicated) |
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For the periods ended as indicated |
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Mar. 28,
2015 |
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Mar. 22, 2014 |
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Change |
Sales |
|
|
$ |
504 |
|
|
$ |
449 |
|
|
12.2 % |
EBITDA(1) |
|
|
$ |
59 |
|
|
$ |
77 |
|
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(23.4)% |
Adjusted EBITDA(1) |
|
|
$ |
63 |
|
|
$ |
68 |
|
|
(7.4)% |
Adjusted EBITDA
margin(1) |
|
|
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12.5% |
|
|
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15.1% |
|
|
|
Operating income |
|
|
$ |
41 |
|
|
$ |
61 |
|
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(32.8)% |
Adjusted operating
income(1) |
|
|
$ |
45 |
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$ |
52 |
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(13.5)% |
Adjusted operating
margin(1) |
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8.9 % |
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11.6% |
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Sales Weston Foods sales in the first quarter of
2015 were $504 million, an
increase of $55 million, or
12.2% compared to the same period in 2014. Foreign currency
translation positively impacted sales by approximately 7.2%.
Excluding the impact of foreign currency translation, sales
increased 5.0% primarily due to an increase in volumes across all
business units and the combined positive impact of pricing and
changes in sales mix. The increase in volumes was positively
impacted by the timing of Easter.
EBITDA(1) Weston Foods
EBITDA(1) in the first quarter of 2015 was
$59 million, a decrease of
$18 million compared to the same
period in 2014, primarily due to the year-over-year unfavourable
impact of the fair value adjustment of commodity derivatives which
is described in the "Non-GAAP Financial Measures" section of this
News Release. In addition, the decrease was due to the decline in
adjusted EBITDA(1) as described below.
Adjusted EBITDA(1) in the first quarter of 2015 was
$63 million, a decrease of
$5 million compared to the same
period in 2014. Despite an increase in volumes, adjusted
EBITDA(1) declined primarily due to higher input costs,
new plant costs, and investments in capabilities and
innovation.
Operating Income Weston Foods operating income in
the first quarter of 2015 was $41 million, a decrease of $20 million compared to the same period in
2014 and was negatively impacted by a number of items as described
above in EBITDA(1). For a complete list of items that
impacted operating income but that are excluded from adjusted
operating income(1), see the "Non-GAAP Financial
Measures" section of this News Release.
Adjusted operating income(1) in the first quarter of
2015 was $45 million, a decrease of
$7 million compared to the same
period in 2014. The decrease was driven by the decline in adjusted
EBITDA(1) as described above and an increase in
depreciation and amortization of $2
million in the first quarter of 2015 due to investments in
capital.
Loblaw |
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(unaudited) |
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12 Weeks
Ended |
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($ millions except where otherwise
indicated) |
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For the periods ended as
indicated |
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Mar. 28,
2015 |
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Mar.
22, 2014(3) |
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Change |
Sales |
|
|
$ |
10,048 |
|
|
$ |
7,292 |
|
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37.8% |
Retail gross profit |
|
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$ |
2,624 |
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$ |
1,603 |
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63.7% |
EBITDA(1) |
|
|
$ |
782 |
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|
$ |
469 |
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66.7% |
Adjusted EBITDA(1) |
|
|
$ |
787 |
|
|
$ |
480 |
|
|
64.0% |
Adjusted EBITDA
margin(1) |
|
|
|
7.8% |
|
|
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6.6% |
|
|
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Operating income |
|
|
$ |
412 |
|
|
$ |
274 |
|
|
50.4% |
Adjusted operating
income(1) |
|
|
$ |
541 |
|
|
$ |
285 |
|
|
89.8% |
Adjusted operating
margin(1) |
|
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5.4% |
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3.9% |
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Sales Loblaw sales in the first quarter of 2015
were $10,048 million, an
increase of $2,756 million
compared to the same period in 2014, primarily driven by the Retail
segment. Retail sales increased by $2,735 million, including $2,596 million in sales contributed by
Shoppers Drug Mart. Food retail same-store sales growth was 2.0%
and the food retail average quarterly internal food price index was
higher than the average quarterly national food price inflation of
4.6% as measured by the Consumer Price Index for Food
Purchased from Stores. Shoppers Drug Mart same-store sales growth
was 3.1%, including same-store pharmacy sales growth of 3.5% and
same-store front store sales growth of 2.7%. Total Retail
same-store sales growth was 2.3% for the first quarter of 2015.
In the last twelve months, grocery and drug store net square
footage increased by 0.1 million square feet, or 0.1%.
Excluding the divestitures required pursuant to a Consent Agreement
with the Competition Bureau ("Consent Agreement"), net square
footage increased by 0.3 million square feet, or 0.5%.
Gross Profit Loblaw Retail gross profit in the
first quarter of 2015 was $2,624
million, an increase of $1,021 million compared to the same period
in 2014. The increase included $1,024 million of gross profit contributed
by Shoppers Drug Mart. Excluding Shoppers Drug Mart, food retail
gross profit percentage was 22.1% compared to 22.6% in the same
period in 2014. Retail gross profit percentage was negatively
impacted by the restructuring of certain franchise fee arrangements
as described below. Excluding this impact, gross profit percentage
was flat, as reductions in transportation costs and synergies
related to the acquisition of Shoppers Drug Mart were offset by
higher shrink.
In 2014, Loblaw restructured its fee arrangements with the
franchisees of certain franchise banners. These revised
arrangements are expected to result in an annual reduction of
Retail sales and gross profit of approximately $150 million with a corresponding decrease in
selling, general and administrative expenses ("SG&A"). In the
first quarter of 2015, this restructuring had a negative impact of
$33 million to gross profit with an
offsetting positive impact to SG&A.
EBITDA(1) Loblaw EBITDA(1) in
the first quarter of 2015 was $782
million, an increase of $313 million compared to the same period in
2014, primarily driven by the contribution from Shoppers Drug Mart
and included the impact of a number of items that are excluded from
adjusted EBITDA(1). For a complete list of items
that impacted EBITDA(1) but that are excluded from
adjusted EBITDA(1), see the "Non-GAAP Financial
Measures" section of this News Release.
Loblaw adjusted EBITDA(1) in the first quarter of
2015 was $787 million, an
increase of $307 million
compared to the same period in 2014, driven by the increase in
Retail gross profit of $1,021 million
described above, partially offset by an increase in SG&A of
$722 million. The increase in
SG&A was primarily driven by the acquisition of Shoppers Drug
Mart. Food retail SG&A was positively impacted by the
restructuring of certain franchise fee arrangements. Excluding this
positive impact, food retail expenses were relatively flat, as
lower charges related to the transition of certain grocery stores
to more cost effective and efficient operating terms under
collective agreements and efficiencies achieved in supply chain and
administration were offset by higher foreign exchange losses and
higher investments in Loblaw's franchise business. Adjusted
EBITDA(1) was positively impacted by net synergies of
$44 million.
Operating Income Loblaw operating income in the
first quarter of 2015 was $412
million, an increase of $138 million compared to the same period in
2014, and included the negative impact of the amortization of
intangible assets acquired with Shoppers Drug Mart as well as a
number of other items that are excluded from adjusted operating
income(1). For a complete list of items that
impacted operating income but that are excluded from adjusted
operating income(1), see the "Non-GAAP Financial
Measures" section of this News Release.
Loblaw adjusted operating income(1) in the first
quarter of 2015 was $541 million, an increase of $256 million compared to the same
period in 2014, and was positively impacted by the increase in
adjusted EBITDA(1) as described above, partially offset
by an increase in depreciation and amortization of $51 million.
NET INTEREST EXPENSE AND OTHER FINANCING CHARGES
In the first quarter of 2015, net interest expense and other
financing charges increased by $9 million to $177 million compared to the same period in
2014 and included the favourable year-over-year impact of the
fair value adjustment of the forward sale agreement for
9.6 million Loblaw common shares, as well as a
number of other items. For a complete list of the
items that impacted net interest expense and other
financing charges but that are excluded from adjusted net
interest expense and other financing charges(1),
see the "Non-GAAP Financial Measures" section of this News
Release.
Adjusted net interest expense and other financing
charges(1) were $138 million, an increase of $42 million compared to the same period in
2014, driven by higher interest on long term debt, primarily as a
result of debt incurred by Loblaw to finance the acquisition of
Shoppers Drug Mart and debt issuances by Choice Properties Real
Estate Investment Trust ("Choice Properties") to third parties.
INCOME TAXES
Income tax expense for the first quarter of 2015 was $96 million and the effective tax rate was
28.1%. Income tax expense for the first quarter of 2014 was
$46 million and the effective
tax rate was 21.9%. The increase in the effective tax rate was
primarily attributable to income tax expense of $9 million recorded in the first quarter of 2015
related to unrealized foreign currency translation gains and a
decrease in certain non-taxable amounts. Adjusted income tax
expense(1) for the first quarter of 2015 was
$122 million and the adjusted
income tax rate(1) was 27.2%. Adjusted income tax
expense(1) for the first quarter of 2014 was
$61 million and the adjusted
income tax rate(1) was 25.3%. The increase in the
adjusted income tax rate(1) was primarily attributable
to a decrease in certain non-taxable amounts.
ADJUSTED DEBT(1)
During the first quarter of 2015, adjusted debt(1)
increased by $42 million, primarily
driven by normal seasonal working capital requirements.
On closing of the acquisition of Shoppers Drug Mart, adjusted
debt(1) was $12.1 billion. Loblaw has made progress and
remains on track to meeting its debt reduction target. The Company
has decreased adjusted debt(1) by approximately
$676 million since the closing
of the acquisition, resulting in an adjusted
debt(1) balance of $11.4 billion as at the end of the first
quarter of 2015.
FREE CASH FLOW(1)
The Company's year-over-year free cash flow(1) increased
by $357 million to $81 million in the first quarter of 2015.
The increase was primarily due to higher cash flows from operating
activities, including the contribution from Shoppers Drug Mart,
partially offset by higher investments in capital.
ACQUISITION OF SHOPPERS DRUG MART CORPORATION
In the first quarter of 2015, Loblaw realized net synergies of
approximately $44 million generated
primarily from improved cost of inventories sold and from
purchasing efficiencies in goods not for resale. Since the closing
of the acquisition, total net synergies achieved as at the end of
the first quarter of 2015 were $145
million. Loblaw continues to expect to achieve annualized
synergies of $300 million in the
third full year following the close of the acquisition of Shoppers
Drug Mart (net of related costs).
Pursuant to the Consent Agreement, the final three Shoppers Drug
Mart stores were sold, resulting in a divestitures loss of
$2 million in the first quarter of
2015. Loblaw has recorded a net cumulative loss of $14 million from the required store
divestitures.
As a result of the acquisition of Shoppers Drug Mart, GWL's
ownership interest in Loblaw decreased from approximately 63% to
approximately 46%. The Company remains the controlling shareholder
of and continues to consolidate Loblaw.
OUTLOOK(2)
The outlook reflects the underlying operating performance of the
Company's operating segments as discussed below.
For full year 2015, Weston Foods expects a decline in adjusted
operating income(1) due to the costs associated with
capital investments, incremental investments in innovation and
capabilities and higher input costs. This decline will be partially
offset by the positive impact of pricing, volume growth and
productivity improvements. On an equivalent 52-week basis,
management continues to expect the decline in adjusted operating
income(1) to be greater in the first half of the year
than in the second half.
Loblaw's strategic framework is focused on delivering the best
in food, best in health and beauty, operational excellence and
growth. This strategic framework is supported by a financial
strategy of maintaining a stable trading environment that targets
positive same-store sales and stable gross margin; surfacing
efficiencies; delivering synergies as a result of its acquisition
of Shoppers Drug Mart; and deleveraging the balance sheet.
Consistent with Loblaw's previous outlook, on a full year
comparative basis, reflecting 2014 financial results for Loblaw and
Shoppers Drug Mart, in 2015 Loblaw expects to:
- maintain positive same-store sales and stable gross margin
(excluding synergies) in its Retail segment;
- achieve net synergies as a result of the acquisition of
Shoppers Drug Mart approaching $200 million;
- continue to drive net efficiencies across the food retail
business by achieving reductions in supply chain, administrative
functions and information technology ("IT"), while still investing
in key areas, like eCommerce;
- grow adjusted operating income(1) in its food retail
business, excluding synergies;
- experience a decline in adjusted operating income(1)
in its retail pharmacy business, excluding synergies, as a result
of investments in key projects and other factors;
- grow consolidated adjusted net earnings(1)
(including synergies) relative to 2014, however not at the same
level achieved in the first quarter of 2015;
- invest approximately $1.2 billion
in capital expenditure programs; and
- remain on track with its deleveraging target, expecting to meet
its target in the first quarter of 2016.
Loblaw's expectations for 2015 also include the following:
- competitive intensity expected to remain high, but relatively
stable as industry square footage growth in supermarket-type
merchandise moderates; and
- continued pressure in its retail pharmacy business from the
ongoing impact of healthcare reform.
DECLARATION OF QUARTERLY DIVIDENDS
Subsequent to the end of the first quarter of 2015, the Company's
Board of Directors declared a quarterly dividend on GWL Common
Shares, Preferred Shares, Series I, Preferred Shares, Series III,
Preferred Shares, Series IV and Preferred Shares, Series V
payable as follows:
|
Common Shares |
|
|
$0.425 per share payable July 1,
2015, to
shareholders of record June 15, 2015; |
|
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Preferred Shares, Series I |
|
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$0.3625 per share payable June 15,
2015, to
shareholders of record May 31, 2015; |
|
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Preferred Shares, Series III |
|
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$0.3250 per share payable July 1,
2015, to
shareholders of record June 15, 2015; |
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Preferred Shares, Series IV |
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$0.3250 per share payable July 1,
2015, to
shareholders of record June 15, 2015; and |
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|
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Preferred Shares, Series V |
|
|
$0.296875 per share payable July 1,
2015, to
shareholders of record June 15, 2015. |
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, events and plans, synergies and other benefits associated
with the acquisition of Shoppers Drug Mart, future liquidity and
debt reduction targets, and planned capital investments. These
specific forward-looking statements are contained throughout this
News Release including, without limitation, in the "Outlook"
section of this News Release. Forward-looking statements are
typically identified by words such as "expect", "anticipate",
"believe", "foresee", "could", "estimate", "goal", "intend",
"plan", "seek", "strive", "will", "may", "on-track", "maintain",
"achieve", "grow", 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 2015 is based on certain
assumptions including assumptions about sales and volume growth,
anticipated cost savings, operating efficiencies, and continued
growth from current initiatives. 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 those expressed, implied
or projected in the forward-looking statements, including those
described in the "Enterprise Risks and Risk Management" section of
the Management's Discussion and Analysis ("MD&A") in the
Company's 2014 Annual Report, the "Enterprise Risks and Risk
Management" section of the MD&A included in the Company's 2015
First Quarter Report to Shareholders and the Company's Annual
Information Form ("AIF") for the year ended December 31, 2014. Such risks and
uncertainties include:
- failure by Loblaw to realize the anticipated strategic benefits
or operational, competitive and cost synergies following the
acquisition of Shoppers Drug Mart;
- failure by Loblaw to reduce indebtedness associated with the
acquisition of Shoppers Drug Mart to bring leverage ratios to a
level consistent with investment grade ratings;
- failure to realize benefits from investments in the Company's
IT systems, including the Company's IT systems implementation, or
unanticipated results from these initiatives;
- failure to realize anticipated results, including revenue
growth, anticipated cost savings or operating efficiencies from the
Company's major initiatives, including those from
restructuring;
- the inability of the Company's IT infrastructure to support the
requirements of the Company's business;
- changes in Loblaw's estimate of inventory cost as a result of
its IT system upgrade;
- changes to the regulation of generic prescription drug prices
and the reduction of reimbursements under public drug benefit plans
and the elimination or reduction of professional allowances paid by
drug manufacturers;
- failure to achieve desired results in labour negotiations,
including the terms of future collective bargaining agreements
which could lead to work stoppages;
- 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 currency exchange rates and
derivative and commodity prices;
- changes in the Company's income, capital, commodity, property
and other tax and regulatory liabilities including changes in tax
laws, regulations or future assessments;
- the risk that the Company will be unsuccessful in any material
litigation, class action, or regulatory proceeding;
- the inability of the Company to manage inventory to minimize
the impact of obsolete or excess inventory and to control
shrink;
- 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;
and
- the inability of Loblaw to collect on and fund its credit card
receivables.
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
without limitation, the section entitled "Operating and Financial
Risks and Risk Management" in the Company's AIF for the year ended
December 31, 2014. 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: EBITDA,
adjusted EBITDA and adjusted EBITDA margin, adjusted operating
income and adjusted operating margin, adjusted basic net earnings
per common share, adjusted debt and free cash flow. In addition to
these items, the following measures are used by management in
calculating adjusted basic net earnings per common share: adjusted
net interest expense and other financing charges, adjusted income
taxes, adjusted income tax rate and adjusted net earnings available
to common shareholders of the Company. 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.
Management uses these and other non-GAAP financial measures to
exclude the impact of certain expenses and income that must be
recognized under GAAP when analyzing consolidated and segment
underlying operating performance. The excluded items are not
necessarily reflective of the Company's underlying operating
performance and make comparisons of underlying financial
performance between periods difficult. 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.
These 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.
EBITDA, Adjusted EBITDA and Adjusted Operating
Income The Company believes adjusted EBITDA is 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 investments program and debt reduction objectives. The
Company believes adjusted operating income is also useful in
assessing the Company's underlying operating performance and in
making decisions regarding the ongoing operations of its
business.
The following table reconciles EBITDA, adjusted EBITDA and
adjusted operating income to operating income, which is reconciled
to GAAP net earnings attributable to shareholders of the Company
reported for the periods ended as indicated.
|
|
12 Weeks Ended |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mar. 28,
2015 |
|
|
|
|
Mar. 22,
2014(i) |
|
(unaudited)
($ millions) |
|
Weston
Foods |
|
Loblaw |
|
Other(ii) |
|
Consolidated |
|
|
|
Weston
Foods |
|
Loblaw |
|
Other(ii) |
|
Consolidated |
|
Net earnings
attributable to shareholders |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
of the Company |
|
|
|
|
|
|
|
|
|
|
$ |
167 |
|
|
|
|
|
|
|
|
|
|
|
|
$ |
120 |
|
Add impact of the
following: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-controlling interests |
|
|
|
|
|
|
|
|
|
|
|
79 |
|
|
|
|
|
|
|
|
|
|
|
|
|
44 |
|
|
Income taxes |
|
|
|
|
|
|
|
|
|
|
|
96 |
|
|
|
|
|
|
|
|
|
|
|
|
|
46 |
|
|
Net interest expense
and other |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
financing charges |
|
|
|
|
|
|
|
|
|
|
|
177 |
|
|
|
|
|
|
|
|
|
|
|
|
|
168 |
|
Operating income |
|
$ |
41 |
|
$ |
412 |
|
$ |
66 |
|
$ |
519 |
|
|
|
$ |
61 |
|
$ |
274 |
|
$ |
43 |
|
$ |
378 |
|
Depreciation and amortization |
|
|
18 |
|
|
370 |
|
|
|
|
|
388 |
|
|
|
|
16 |
|
|
195 |
|
|
|
|
|
211 |
|
EBITDA |
|
$ |
59 |
|
$ |
782 |
|
$ |
66 |
|
$ |
907 |
|
|
|
$ |
77 |
|
$ |
469 |
|
$ |
43 |
|
$ |
589 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income |
|
$ |
41 |
|
$ |
412 |
|
$ |
66 |
|
$ |
519 |
|
|
|
$ |
61 |
|
$ |
274 |
|
$ |
43 |
|
$ |
378 |
|
Add (deduct) impact of the
following: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of
intangible assets acquired |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
with Shoppers Drug Mart |
|
|
|
|
|
124 |
|
|
|
|
|
124 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring and other charges |
|
|
4 |
|
|
12 |
|
|
|
|
|
16 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair value adjustment of
derivatives |
|
|
(1) |
|
|
(12) |
|
|
|
|
|
(13) |
|
|
|
|
(9) |
|
|
|
|
|
|
|
|
(9) |
|
|
Fixed asset and other
related impairments, |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
net of recoveries |
|
|
|
|
|
3 |
|
|
|
|
|
3 |
|
|
|
|
|
|
|
3 |
|
|
|
|
|
3 |
|
|
Shoppers Drug Mart
divestitures loss |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
and acquisition costs |
|
|
|
|
|
2 |
|
|
|
|
|
2 |
|
|
|
|
|
|
|
8 |
|
|
|
|
|
8 |
|
|
Inventory loss |
|
|
1 |
|
|
|
|
|
|
|
|
1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency translation gain |
|
|
|
|
|
|
|
|
(66) |
|
|
(66) |
|
|
|
|
|
|
|
|
|
|
(43) |
|
|
(43) |
|
Adjusted operating
income |
|
$ |
45 |
|
$ |
541 |
|
|
|
|
$ |
586 |
|
|
|
$ |
52 |
|
$ |
285 |
|
|
|
|
$ |
337 |
|
Depreciation and
amortization excluding the |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
impact of the above
adjustments(iii) |
|
|
18 |
|
|
246 |
|
|
|
|
|
264 |
|
|
|
|
16 |
|
|
195 |
|
|
|
|
|
211 |
|
Adjusted EBITDA |
|
$ |
63 |
|
$ |
787 |
|
|
|
|
$ |
850 |
|
|
|
$ |
68 |
|
$ |
480 |
|
|
|
|
$ |
548 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(i) |
Certain 2014 figures have been restated. See note 2 of the
Company's unaudited interim period condensed consolidated
financial
statements included in the 2015 First Quarter Report
to Shareholders. |
(ii) |
Represents the effect of foreign currency translation on a
portion of the United States ("U.S.") dollar denominated cash and
cash
equivalents and short term investments held by foreign
operations. |
(iii) |
Depreciation and amortization for the calculation of adjusted
EBITDA at Loblaw excludes $124 million (2014 - nil) of
amortization of
intangible assets acquired with Shoppers Drug Mart. |
The following items impacted operating income in the first
quarters of 2015 and 2014:
Amortization of intangible assets acquired
with Shoppers Drug Mart The acquisition of
Shoppers Drug Mart in the second quarter of 2014 included
approximately $6 billion of
definite life intangible assets, which are being amortized over
their estimated useful lives. In the first quarter of 2015,
$124 million of amortization was
recognized in operating income. Loblaw expects to recognize annual
amortization of approximately $550 million associated with the acquired
intangible assets over the next nine years and decreasing
thereafter.
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.
In the first quarter of 2015, Loblaw recorded $12 million (2014 - nil) of restructuring and
reorganization costs primarily associated with the administrative
restructuring activities in the Joe Fresh and Shoppers Home Health
Care businesses.
Fair value adjustment of derivatives The
Company is exposed to commodity price and U.S. dollar exchange rate
fluctuations primarily as a result of purchases of certain raw
materials, fuels and utilities. In accordance with the Company's
commodity risk management policy, the Company enters into commodity
and foreign currency derivatives to reduce the impact of price
fluctuations in forecasted raw material and fuel purchases over a
specified period of time. These derivatives are not acquired for
trading or speculative purposes. Pursuant to the Company's
derivative instruments accounting policy, certain changes in fair
value, which include realized and unrealized gains and losses
related to future purchases of raw materials and fuel, are recorded
in operating income. In the first quarter of 2015, Weston Foods
recorded income of $1 million
(2014 - $9 million) and Loblaw
recorded income of $12 million
(2014 - nil), related to the fair value adjustment of commodity and
foreign currency derivatives. Despite the impact of accounting for
these commodity and foreign currency derivatives on the Company's
reported results, the derivatives have the economic impact of
largely mitigating the associated risks arising from price and
exchange rate fluctuations in the underlying commodities.
Fixed asset and other related impairments, net of
recoveries At each balance sheet date, the
Company assesses and, when required, records impairments and
recoveries of previous impairments related to the carrying value of
its fixed assets, investment properties and intangible assets. In
the first quarter of 2015, Loblaw recorded a net charge of
$3 million (2014 - $3 million) related to fixed assets and
other related impairments.
Shoppers Drug Mart divestitures loss and acquisition
costs In the first quarter of 2015, Loblaw
recorded a loss of $2 million related
to divestitures completed in the quarter. During the first quarter
of 2014, Loblaw incurred $8 million
of acquisition-related costs.
Inventory loss On August 31, 2014, a weather event in the U.S.
caused significant damage to Weston Foods inventories stored at a
third-party warehouse. In the first quarter of 2015, a charge of
$1 million (approximately
U.S. $1 million) was
recorded in SG&A.
Foreign currency translation gain 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 gains and
losses. The impact of foreign currency translation on a portion of
the U.S. dollar denominated net assets, primarily cash and cash
equivalents and short term investments held by foreign
operations, is recorded in operating income and the associated tax,
if any, is recorded in income taxes. In the first quarter of
2015, a foreign currency translation gain of $66 million (2014 - $43 million) was recorded in operating
income as a result of the appreciation of the U.S. dollar relative
to the Canadian dollar. Income tax expense of $9 million (2014 - nil) was also recorded
associated with this foreign currency translation gain.
Adjusted Net Interest Expense and Other Financing
Charges The Company believes adjusted net interest
expense and other financing charges is useful in assessing the
ongoing net financing costs of the Company.
The following table reconciles adjusted net interest expense and
other financing charges to GAAP net interest expense and other
financing charges reported for the periods ended as indicated.
(unaudited) |
|
|
12 Weeks Ended |
|
|
|
|
|
|
|
|
|
|
|
|
($ millions) |
|
|
Mar.
28, 2015 |
|
|
|
Mar. 22, 2014 |
Net interest expense and other
financing charges |
|
|
$ |
177 |
|
|
|
$ |
168 |
Less: |
Fair value adjustment of
the Trust Unit liability |
|
|
39 |
|
|
|
8 |
|
Fair
value adjustment of the forward sale agreement for 9.6 million
Loblaw |
|
|
|
|
|
|
|
|
|
|
|
common shares |
|
|
(3) |
|
|
|
49 |
|
Accelerated amortization
of deferred financing costs |
|
|
3 |
|
|
|
|
|
Shoppers Drug Mart net
financing charges |
|
|
|
|
|
|
15 |
Adjusted net interest expense and
other financing charges |
|
|
$ |
138 |
|
|
|
$ |
96 |
|
|
|
|
|
|
|
In addition to certain items described in the "EBITDA, Adjusted
EBITDA and Adjusted Operating Income" section above, the following
items impacted net interest expense and other financing charges in
the first quarters of 2015 and 2014:
Fair value adjustment of the Trust Unit
liability The Company is exposed to market price
fluctuations as a result of the Choice Properties Trust Units held
by unitholders other than the Company. These Trust Units are
presented as a liability on the Company's consolidated balance
sheets as they are redeemable for cash at the option of the holder,
subject to certain restrictions. This liability is recorded at fair
value at each reporting period based on the market price of Trust
Units at the end of each period. In the first quarter of 2015, the
Company recorded a loss of $39 million (2014 - $8 million) in net interest expense and
other financing charges related to the fair value adjustment of the
Trust Unit liability as a result of an increase in the market price
of Trust Units. An increase (decrease) in the market price of Trust
Units results in a charge (income) to net interest expense and
other financing charges.
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 net interest
expense and other financing charges. The adjustment is determined
by changes in the value of the underlying Loblaw common shares. In
the first quarter of 2015, income of $3 million (2014 - a charge of $49 million) was recorded in net interest
expense and other financing charges as a result of the changes in
the market price of Loblaw common shares. An increase (decrease) in
the market price of Loblaw common shares results in a charge
(income) to net interest expense and other financing charges.
Accelerated amortization of deferred financing
costs In the first quarter of 2015, Loblaw recorded a
charge of $3 million related to
the accelerated amortization of deferred financing costs due to the
repayment of $207 million of its
unsecured term loan facility.
Shoppers Drug Mart net financing charges In
addition to the divestitures loss and acquisition costs as
described in the "EBITDA, Adjusted EBITDA and Adjusted Operating
Income" section above, in the first quarter of 2014, net charges of
$15 million were incurred in
connection with financing related to the acquisition of Shoppers
Drug Mart.
Adjusted Income Taxes and Adjusted Income Tax
Rate The Company believes the adjusted income tax
rate applicable to adjusted earnings before taxes is useful in
assessing the underlying operating performance of its business.
The following table reconciles the effective income tax rate
applicable to adjusted earnings before taxes to the GAAP effective
income tax rate applicable to earnings before taxes as reported for
the periods ended as indicated.
(unaudited) |
|
12 Weeks Ended |
|
|
|
|
|
|
|
|
|
|
|
|
($ millions except where otherwise
indicated) |
|
Mar. 28, 2015 |
|
|
Mar.
22, 2014(i) |
|
Adjusted operating
income(ii) |
|
$ |
586 |
|
|
$ |
337 |
|
Adjusted net interest expense and
other financing charges(ii) |
|
138 |
|
|
96 |
|
Adjusted earnings before
taxes |
|
$ |
448 |
|
|
$ |
241 |
|
Income taxes |
|
$ |
96 |
|
|
$ |
46 |
|
Less: Tax impact of items
excluded from adjusted earnings before taxes(iii) |
|
(26) |
|
|
(15) |
|
Adjusted income taxes |
|
$ |
122 |
|
|
$ |
61 |
|
Effective income tax rate
applicable to earnings before taxes |
|
|
28.1% |
|
|
21.9% |
|
Adjusted income tax rate
applicable to adjusted earnings before taxes |
|
|
27.2% |
|
|
25.3% |
|
|
|
|
|
|
|
|
(i) |
Certain 2014 figures have been restated. See note 2 of the
Company's unaudited interim period condensed
consolidated financial statements included in the 2015 First
Quarter Report to Shareholders. |
(ii) |
See reconciliations of adjusted operating income and adjusted
net interest expense and other financing
charges above. |
(iii) |
See the EBITDA, adjusted EBITDA and adjusted operating income
table and the adjusted net interest expense
and other financing charges table above for a complete list of
items excluded from adjusted earnings before
taxes. |
Adjusted Basic Net Earnings per Common Share and Adjusted Net
Earnings The Company believes adjusted basic net earnings
per common share and adjusted net earnings are 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 and adjusted net earnings to GAAP basic net earnings
per common share reported for the periods ended as indicated.
(unaudited)
|
|
12 Weeks Ended
|
|
|
|
|
|
|
|
|
|
|
($
except where otherwise indicated) |
|
Mar. 28, 2015 |
|
Mar. 22,
2014(i) |
|
Basic net earnings per
common share |
|
$ |
1.23 |
|
|
$ |
0.86 |
|
(Deduct) Add impact of
the following(ii): |
|
|
|
|
|
|
|
|
|
Fair value
adjustment of the forward sale agreement for 9.6 million Loblaw
common shares |
|
|
(0.02) |
|
|
|
0.29 |
|
|
Amortization of intangible assets
acquired with Shoppers Drug Mart |
|
|
0.32 |
|
|
|
|
|
|
Restructuring and other
charges |
|
|
0.06 |
|
|
|
|
|
|
Fair value adjustment of the Trust
Unit liability |
|
|
0.05 |
|
|
|
0.03 |
|
|
Fair value adjustment of
derivatives |
|
|
(0.04) |
|
|
|
(0.05) |
|
|
Inventory loss |
|
|
0.01 |
|
|
|
|
|
|
Fixed asset and other related
impairments, net of recoveries |
|
|
0.01 |
|
|
|
0.01 |
|
|
Accelerated amortization of
deferred financing costs |
|
|
0.01 |
|
|
|
|
|
|
Shoppers Drug Mart divestitures
loss and acquisition costs |
|
|
0.01 |
|
|
|
0.09 |
|
|
Foreign currency translation
gain |
|
|
(0.45) |
|
|
|
(0.34) |
|
Adjusted basic net
earnings per common share |
|
$ |
1.19 |
|
|
$ |
0.89 |
|
Weighted average
common shares outstanding (millions) |
|
|
127.6 |
|
|
|
127.7 |
|
Adjusted net earnings attributable to shareholders of the
Company ($ millions) |
|
$ |
162 |
|
|
$ |
124 |
|
Prescribed dividends
on preferred shares in share capital ($ millions) |
|
|
10 |
|
|
|
10 |
|
Adjusted net earnings
available to common shareholders of the |
|
|
|
|
|
|
|
|
|
Company ($ millions) |
|
$ |
152 |
|
|
$ |
114 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(i) |
Certain 2014 figures have been restated. See note 2 of the
Company's unaudited interim period condensed consolidated
financial statements included in the 2015 First Quarter Report
to Shareholders. |
(ii) |
Net of income taxes and non-controlling interests, as
applicable. |
Adjusted Debt The Company believes adjusted debt is
useful in assessing the amount of financial leverage employed by
the Company. In the table below, the Company has presented adjusted
debt as at March 28, 2014, the date
of acquisition of Shoppers Drug Mart, as this is the baseline for
the Company's debt reduction target.
The following table reconciles adjusted debt to GAAP measures
reported as at the periods ended as indicated.
(unaudited) |
|
As at |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
($ millions) |
|
Mar. 28, 2015 |
|
|
Dec. 31, 2014 |
|
|
Mar. 28, 2014 |
|
|
Mar. 22, 2014 |
Bank indebtedness |
|
$ |
299 |
|
|
|
$ |
162 |
|
|
|
$ |
295 |
|
|
|
|
Short term debt |
|
1,011 |
|
|
|
1,101 |
|
|
|
1,070 |
|
|
|
$ |
1,070 |
Long term debt due
within one year |
|
445 |
|
|
|
420 |
|
|
|
902 |
|
|
|
902 |
Long term debt |
|
12,187 |
|
|
|
12,306 |
|
|
|
12,327 |
|
|
|
8,220 |
Trust Unit
liability |
|
534 |
|
|
|
494 |
|
|
|
487 |
|
|
|
487 |
Capital
securities |
|
225 |
|
|
|
225 |
|
|
|
224 |
|
|
|
224 |
Certain other
liabilities |
|
28 |
|
|
|
28 |
|
|
|
39 |
|
|
|
39 |
Fair
value of financial derivatives related
to the above debt |
|
(379) |
|
|
|
(367) |
|
|
|
(484) |
|
|
|
(484) |
Total debt |
|
$ |
14,350 |
|
|
|
$ |
14,369 |
|
|
|
$ |
14,860 |
|
|
|
$ |
10,458 |
Less: |
Independent securitization
trusts |
|
$ |
1,255 |
|
|
|
$ |
1,355 |
|
|
|
$ |
1,355 |
|
|
|
$ |
1,355 |
|
Trust Unit liability |
|
534 |
|
|
|
494 |
|
|
|
487 |
|
|
|
487 |
|
Independent funding trusts |
|
496 |
|
|
|
498 |
|
|
|
469 |
|
|
|
469 |
|
Guaranteed Investment
Certificates |
|
635 |
|
|
|
634 |
|
|
|
443 |
|
|
|
443 |
Adjusted debt |
|
$ |
11,430 |
|
|
|
$ |
11,388 |
|
|
|
$ |
12,106 |
|
|
|
$ |
7,704 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Free Cash Flow The Company believes free cash flow
is useful in assessing the Company's cash available for additional
financing and investing activities.
The following table reconciles free cash flow to GAAP measures
reported for the periods ended as indicated.
(unaudited) |
|
|
12 Weeks Ended
|
|
|
|
|
|
|
|
|
|
|
|
($ millions) |
|
|
Mar. 28, 2015 |
|
|
Mar.
22, 2014 |
Cash flows from
operating activities |
|
|
$ |
517 |
|
|
|
$ |
2 |
Less: |
Interest paid |
|
|
165 |
|
|
|
148 |
|
Fixed asset purchases |
|
|
244 |
|
|
|
117 |
|
Intangible asset additions |
|
|
27 |
|
|
|
13 |
Free cash flow |
|
|
$ |
81 |
|
|
|
$ |
(276) |
|
|
|
|
|
|
|
|
|
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 2015 First 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 2014 Annual Report and 2015 First
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) |
|
|
12 Weeks Ended
|
|
|
|
|
|
|
|
|
|
|
(millions of Canadian dollars except where otherwise
indicated) |
|
|
Mar. 28, 2015 |
|
|
|
Mar.
22, 2014(3) |
Revenue |
|
|
$ |
10,409 |
|
|
|
$ |
7,612 |
Operating
Expenses |
|
|
|
|
|
|
|
|
|
|
Cost of inventories sold |
|
|
|
7,421 |
|
|
|
|
5,668 |
|
Selling, general and
administrative expenses |
|
|
|
2,469 |
|
|
|
|
1,566 |
|
|
|
|
9,890 |
|
|
|
|
7,234 |
Operating
Income |
|
|
|
519 |
|
|
|
|
378 |
Net Interest Expense
and Other Financing Charges |
|
|
|
177 |
|
|
|
|
168 |
Earnings Before
Income Taxes |
|
|
|
342 |
|
|
|
|
210 |
Income Taxes |
|
|
|
96 |
|
|
|
|
46 |
Net
Earnings |
|
|
|
246 |
|
|
|
|
164 |
Attributable to: |
|
|
|
|
|
|
|
|
|
|
Shareholders of the Company |
|
|
|
167 |
|
|
|
|
120 |
|
Non-Controlling Interests |
|
|
|
79 |
|
|
|
|
44 |
Net
Earnings |
|
|
$ |
246 |
|
|
|
$ |
164 |
Net Earnings per
Common Share ($) |
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
$ |
1.23 |
|
|
|
$ |
0.86 |
|
Diluted |
|
|
$ |
1.23 |
|
|
|
$ |
0.85 |
|
|
|
|
|
|
|
|
|
Condensed Consolidated Balance Sheets
(unaudited) |
|
As at |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(millions of Canadian
dollars) |
|
|
Mar. 28, 2015 |
|
|
|
Mar.
22, 2014(3) |
|
|
|
Dec.
31, 2014(3)(4) |
ASSETS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
|
$ |
1,393 |
|
|
|
$ |
3,321 |
|
|
|
$ |
1,333 |
|
Short term investments |
|
|
|
1,050 |
|
|
|
|
909 |
|
|
|
|
1,072 |
|
Accounts receivable |
|
|
|
1,376 |
|
|
|
|
749 |
|
|
|
|
1,318 |
|
Credit card receivables |
|
|
|
2,478 |
|
|
|
|
2,399 |
|
|
|
|
2,630 |
|
Inventories |
|
|
|
4,554 |
|
|
|
|
2,208 |
|
|
|
|
4,463 |
|
Income taxes recoverable |
|
|
|
105 |
|
|
|
|
27 |
|
|
|
|
30 |
|
Prepaid expenses and other
assets |
|
|
|
221 |
|
|
|
|
133 |
|
|
|
|
223 |
|
Assets held for sale |
|
|
|
14 |
|
|
|
|
23 |
|
|
|
|
23 |
Total Current
Assets |
|
|
|
11,191 |
|
|
|
|
9,769 |
|
|
|
|
11,092 |
Fixed Assets |
|
|
|
10,985 |
|
|
|
|
9,045 |
|
|
|
|
10,938 |
Investment
Properties |
|
|
|
186 |
|
|
|
|
115 |
|
|
|
|
185 |
Intangible Assets |
|
|
|
9,658 |
|
|
|
|
764 |
|
|
|
|
9,786 |
Goodwill |
|
|
|
3,782 |
|
|
|
|
1,372 |
|
|
|
|
3,756 |
Deferred Income
Taxes |
|
|
|
177 |
|
|
|
|
332 |
|
|
|
|
215 |
Security Deposits |
|
|
|
94 |
|
|
|
|
1,790 |
|
|
|
|
92 |
Franchise Loans
Receivable |
|
|
|
388 |
|
|
|
|
363 |
|
|
|
|
399 |
Other Assets |
|
|
|
728 |
|
|
|
|
760 |
|
|
|
|
683 |
Total
Assets |
|
|
$ |
37,189 |
|
|
|
$ |
24,310 |
|
|
|
$ |
37,146 |
LIABILITIES |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
Liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bank indebtedness |
|
|
$ |
299 |
|
|
|
|
|
|
|
|
$ |
162 |
|
Trade payables and other
liabilities |
|
|
|
4,817 |
|
|
|
$ |
3,436 |
|
|
|
|
4,934 |
|
Provisions |
|
|
|
128 |
|
|
|
|
111 |
|
|
|
|
130 |
|
Short term debt |
|
|
|
1,011 |
|
|
|
|
1,070 |
|
|
|
|
1,101 |
|
Long term debt due within one
year |
|
|
|
445 |
|
|
|
|
902 |
|
|
|
|
420 |
|
Associate interest |
|
|
|
187 |
|
|
|
|
|
|
|
|
|
193 |
|
Capital securities |
|
|
|
225 |
|
|
|
|
|
|
|
|
|
225 |
Total Current
Liabilities |
|
|
|
7,112 |
|
|
|
|
5,519 |
|
|
|
|
7,165 |
Provisions |
|
|
|
106 |
|
|
|
|
78 |
|
|
|
|
103 |
Long Term Debt |
|
|
|
12,187 |
|
|
|
|
8,220 |
|
|
|
|
12,306 |
Trust Unit
Liability |
|
|
|
534 |
|
|
|
|
487 |
|
|
|
|
494 |
Deferred Income
Taxes |
|
|
|
1,967 |
|
|
|
|
177 |
|
|
|
|
1,980 |
Other Liabilities |
|
|
|
876 |
|
|
|
|
645 |
|
|
|
|
849 |
Capital
Securities |
|
|
|
|
|
|
|
|
224 |
|
|
|
|
|
Total
Liabilities |
|
|
|
22,782 |
|
|
|
|
15,350 |
|
|
|
|
22,897 |
EQUITY |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share Capital |
|
|
|
998 |
|
|
|
|
972 |
|
|
|
|
997 |
Contributed
Surplus |
|
|
|
71 |
|
|
|
|
71 |
|
|
|
|
80 |
Retained Earnings |
|
|
|
6,224 |
|
|
|
|
5,269 |
|
|
|
|
6,125 |
Accumulated Other
Comprehensive Income |
|
|
|
140 |
|
|
|
|
51 |
|
|
|
|
87 |
Total Equity Attributable to Shareholders of the
Company |
|
|
|
7,433 |
|
|
|
|
6,363 |
|
|
|
|
7,289 |
Non-Controlling
Interests |
|
|
|
6,974 |
|
|
|
|
2,597 |
|
|
|
|
6,960 |
Total
Equity |
|
|
|
14,407 |
|
|
|
|
8,960 |
|
|
|
|
14,249 |
Total Liabilities
and Equity |
|
|
$ |
37,189 |
|
|
|
$ |
24,310 |
|
|
|
$ |
37,146 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Condensed Consolidated Statements of Cash Flows
(unaudited) |
|
12 Weeks Ended
|
|
|
|
|
|
|
|
|
|
|
(millions of Canadian
dollars) |
|
|
Mar. 28, 2015 |
|
|
Mar.
22, 2014(3) |
Operating
Activities |
|
|
|
|
|
|
|
Net earnings |
|
|
$ |
246 |
|
|
$ |
164 |
|
Income taxes |
|
|
96 |
|
|
|
46 |
|
Net interest expense
and other financing charges |
|
|
177 |
|
|
|
168 |
|
Depreciation and
amortization |
|
|
388 |
|
|
|
211 |
|
Foreign currency
translation gain |
|
|
(66) |
|
|
|
(43) |
|
Change in credit card
receivables |
|
|
152 |
|
|
|
139 |
|
Change in non-cash
working capital |
|
|
(361) |
|
|
|
(620) |
|
Income taxes paid |
|
|
(137) |
|
|
|
(83) |
|
Interest received |
|
|
3 |
|
|
|
11 |
|
Other |
|
|
19 |
|
|
|
9 |
Cash Flows from
Operating Activities |
|
|
517 |
|
|
|
2 |
Investing
Activities |
|
|
|
|
|
|
|
|
Fixed asset
purchases |
|
|
(244) |
|
|
|
(117) |
|
Change in short term
investments |
|
|
85 |
|
|
|
620 |
|
Change in franchise
investments and other receivables |
|
|
13 |
|
|
|
6 |
|
Intangible asset
additions |
|
|
(27) |
|
|
|
(13) |
|
Investment in joint
venture |
|
|
(1) |
|
|
|
|
|
Other |
|
|
(43) |
|
|
|
14 |
Cash Flows (used
in) from Investing Activities |
|
|
(217) |
|
|
|
510 |
Financing
Activities |
|
|
|
|
|
|
|
|
Change in bank
indebtedness |
|
|
137 |
|
|
|
|
|
Change in Associate
interest |
|
|
(6) |
|
|
|
|
|
Change in short term
debt |
|
|
(90) |
|
|
|
10 |
|
Long term debt |
- Issued, net of financing
charges |
|
|
255 |
|
|
|
469 |
|
|
- Retired |
|
|
(356) |
|
|
|
(326) |
|
Share capital |
- Retired |
|
|
(1) |
|
|
|
|
|
Loblaw share capital |
- Issued |
|
|
14 |
|
|
|
10 |
|
|
- Purchased and held in trust |
|
|
(24) |
|
|
|
|
|
|
- Retired |
|
|
(17) |
|
|
|
|
|
Interest paid |
|
|
(165) |
|
|
|
(148) |
|
Dividends |
- To common shareholders |
|
|
|
|
|
|
(53) |
|
|
- To preferred shareholders |
|
|
(3) |
|
|
|
(11) |
|
|
- To minority shareholders |
|
|
|
|
|
|
(25) |
Cash Flows used in
Financing Activities |
|
|
(256) |
|
|
|
(74) |
Effect
of foreign currency exchange rate changes on cash and cash
equivalents |
|
|
16 |
|
|
|
14 |
Change in Cash and
Cash Equivalents |
|
|
60 |
|
|
|
452 |
Cash and Cash
Equivalents, Beginning of Period |
|
|
1,333 |
|
|
|
2,869 |
Cash and Cash
Equivalents, End of Period |
|
|
$ |
1,393 |
|
|
$ |
3,321 |
|
|
|
|
|
|
|
|
2015 FIRST QUARTER REPORT TO SHAREHOLDERS
The Company's 2014 Annual Report and 2015 First 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 are available online at www.sedar.com.
INVESTOR RELATIONS
Shareholders, security analysts and investment professionals should
direct their requests to Mr. Geoffrey H. Wilson,
Senior Vice President, Investor Relations, Business Intelligence
and Communications, at the Company's Executive Office or
by e-mail at investor@weston.ca.
Additional financial information has been filed electronically
with various securities regulators in Canada through SEDAR. This News Release
includes selected information on Loblaw Companies Limited, a public
company with shares trading on the Toronto Stock Exchange. For
information regarding Loblaw, readers should also refer to the
materials filed by Loblaw with SEDAR 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, May
12, 2015 at 9:00 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: 24755058#. To access
via audio webcast, please visit the Investor Centre section of
www.weston.ca. Pre-registration will be available.
ANNUAL MEETING
The George Weston Limited Annual Meeting of Shareholders will be
held on Tuesday, May 12, 2015 at
11:00 a.m. (EST) at The
Royal Conservatory, TELUS Centre for Performance and Learning,
Koerner Hall,
273 Bloor Street West, Toronto, Ontario, Canada. 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: 24792389#. To access via audio webcast, please
visit the Investor Centre section of www.weston.ca.
Pre-registration will be available.
|
|
Endnotes |
|
|
(1) |
See "Non-GAAP Financial Measures"
section of this News Release. |
(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 GWL'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 2014 figures have been
restated. See note 2, "Changes to Significant Accounting Policies"
of the Company's unaudited interim period condensed consolidated
financial statements, included in the 2015 First Quarter Report to
Shareholders. |
(4) |
Certain 2014 figures have been
restated. See note 3, "Acquisition of Shoppers Drug Mart
Corporation" of the Company's unaudited interim period condensed
consolidated financial statements, included in the 2015 First
Quarter Report to Shareholders. |
|
|
SOURCE George Weston Limited