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March 28, 2012
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CIBC Retail & Consumer ConferenceMarch 28, 2012
Forward-looking statements are included in the following presentations. These forward-looking statements are identified by the use of terms and phrases such as “anticipate”, “believe”, “could”, “estimate”, “expect”, “intend”, “may”, “plan”, “predict”, “project”, “will”, “would”, and similar terms and phrases, including references to assumptions. Such statements may involve but are not limited to comments with respect to strategies, expectations, objectives, goals, aspirations, intentions, planned operations or future actions.
Forward-looking statements, by their nature, are based on assumptions and are subject to important risks and uncertainties. Any forecasts, predictions or forward-looking statements cannot be relied upon due to, among other things, changing external events and general uncertainties of the business and its corporate structure. Results indicated in forward-looking statements may differ materially from actual results for a number of reasons, including without limitation, dependency on Top Accumulation partners and clients, conflicts of interest, greater than expected redemptions for rewards, regulatory matters, retail market/economic conditions, industry competition, Air Canada liquidity issues, Air Canada or travel industry disruptions,airline industry changes and increased airline costs, supply and capacity costs, unfunded future redemption costs, failure to safeguard databases and consumer privacy, changes to coalition loyalty programs, seasonal nature of the business, other factors and prior performance, foreign operations, legal proceedings, reliance on key personnel, labour relations, pension liability, technological disruptions and inability to use third party software, failure to protect intellectual property rights, interest rate and currency fluctuations, leverage and restrictive covenants in current and future indebtedness, uncertainty of dividend payments, managing growth, credit ratings, as well as the other factors identified throughout this presentation and throughout our public disclosure record on file with the Canadian securities regulatory authorities.
The forward-looking statements contained herein are subject to change. However, Groupe Aeroplan Inc., doing business as Aimia (“Aimia”), disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise, except as required under applicable securities regulations.
For further information, please contact Investor Relations at 416 352 3728 or [email protected].
FORWARD-LOOKING STATEMENTS
3.
DAVID ADAMSEVP & CFO
A MULTINATIONAL COMPANY INSPIRING LOYALTY THROUGH A FULL-SUITE GLOBAL OFFERING
5
Coalition Loyalty Programs
Proprietary Loyalty Services
Loyalty Data Analytics
TRAVEL & HOSPITALITY
DELIVERING SIGNIFICANT MEASURABLE VALUE TO OUR COMMERCIAL PARTNERS WORLDWIDE
RETAIL AUTO
TECH & TELCO
CPG &OTHERS
FINANCIAL SERVICES
UNMATCHED GLOBAL SCALE AND SCOPE
7
Mexico
USA
Chile
UK
Italy
QatarIndia
Hong Kong
Malaysia Indonesia
Singapore
Australia
NewZealand
Bahrain
UAE
Japan
Brazil
Canada
EgyptOman
JordanLebanon
Consolidated Gross BillingsF2011$2.23B
58%
42% Canada
Rest of World
THE LARGEST PURE PLAY LOYALTY
COMPANY IN THE WORLD
. . . WITH SIGNIFICANT OPPORTUNITY FOR EXPANSION
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Indonesia
THE LARGEST PURE PLAY LOYALTY COMPANY IN THE WORLD
Mexico
USA
Chile
UK
Italy
India
Hong Kong
Malaysia Singapore
AustraliaNew
Zealand
Brazil
EgyptJordan
Lebanon
Area’s for potential global expansion
Japan
QatarBahrain
UAEOman
Consolidated Gross Billings(Projected)
50%
50%
Canada
Rest of World
Canada
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DELIVERING HEALTHY GROSS BILLINGS GROWTH
F2011($ millions)
2005 2006 2007 2008 2009 2010 2011
754.8851.9
952.2
1,501.0 1,447.3
2,187.8 2,233.2
F2005($ millions)
+196%growth
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GROWING CONSOLIDATED ADJUSTED EBITDA
(1) Constant Currency excludes the translation effect of foreign operations on the consolidated results. For more information on Constant Currency, please refer to Aimia’s February 22, 2012 earnings press release.
(2) Adjusted EBITDA excluding noted items over Gross Billings excluding accounting adjustment.(3) Restructuring and reorganization charges of $23.3 million net of $2.6 million related to forfeiture of stock based rewards.
F2005($ millions)
F2011($ millions)
2005 2006 2007 2008 2009 2010 2011
168.1
281.6
216.4
285.5
251.7
342.2316.2
+13 per cent CAGR
A SIGNIFICANT GENERATOR OF FREE CASH FLOW
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Free Cash Flow (1)
($ millions)Free Cash Flow / Common
Share (2)
(1) Free Cash Flow before common and preferred dividends paid.
(2) Calculated as: (Free Cash Flow before common and preferred dividends paid, less preferred dividends)/ weighted average common shares outstanding.
(3) Free Cash Flow before common and preferred dividends paid as reported of $197.6 million excluding funding of the prepaid card liability of $23.9 million in the US business in the fourth quarter of 2011.
(4) Common and preferred dividends paid.
(5) Free Cash Flow after common and preferred dividends paid.
(3)
Dividends(4) $ 113.5 $ 107.6 $ 28.9 $ 26.2
Free Cash Flow(5) $ 84.1 $ 113.7 ($ 16.5) $ 55.3
FY 2011 FY 2010 Q4 2011 Q4 2010
$221.5
$36.3
$221.2
$81.5
$197.6
(3)
$0.42
$0.06
$1.08$1.04
FY 2011 FY 2010 Q4 2011 Q4 2010
DEMONSTRATING RELIABILITY WITH A STRONG BALANCE SHEET AND INVESTMENT GRADE RATING
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Balance Sheet
INVESTMENT GRADE RATING IS CRITICAL TO EXECUTION OF GLOBAL EXPANSION
Completed multiple bond issues with declining yields
Long-term debt with laddered maturities
Strong free cash flow generation = flexibility
Dec 31, 2011 Dec 31, 2010
Cash and cash equivalents $202.1 $538.6
Restricted cash $15.1 $12.6
Short-term investments $58.4 --
Long-term investments in bonds $279.7 $176.9
$555.3 $728.1
Current portion of long-term debt $200.0 --
Long-term debt $386.7 $643.9
Equity attributable to equity holders of the Corporation $1,305.6 $1,632.2
Equity $1,291.5 $1,635.1
INCREASING SHAREHOLDER RETURN WITH AN ATTRACTIVE COMMON SHARE DIVIDEND
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Dividends Paid ($ millions)
Dividend to be reviewed annually
Current annual dividend is $0.60 per
common share –increased by 20%
in 2011
Payout ratio has historically been
approximately 50%
2009 2010 2011
Common Preferred
$108$100
$113
INCREASING SHAREHOLDER RETURN THROUGH A COMMON SHARE REPURCHASE PROGRAM
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26.2 million common shares repurchased
since May 2010
Average repurchase price: $11.77
Reduced common shares outstanding by 13% since May 2010
200M
173.8M
Aimia Common Shares Outstanding
• Grow core coalition & proprietary loyalty businesse s– Top line growth– Value-added digital products and services– Operating leverage and margin expansion
• Expand operations– Greenfield coalition programs (e.g. Italy, India, U.S.)– Investments in frequent flyer programs
(Aeromexico / Club Premier)– Joint ventures with industry leaders (Tata in India,
Multiplus in Brazil)
• Globalize our world leading data analytics expertis e and capitalize on digital revolution
– ISS – head room to grow with strong worldwide retail pipeline and 100+ retailers with sales of $10B+
– Aggressively pursuing digital and mobile strategy and looking at possible partners leading the space
A STRONG CORE AND MORE: CREATING LONG-TERM VALUE THROUGH GLOBALIZATION AND EXPANSION STRATEGY
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NECTAR ITALIA: GREENFIELD COALITION LOYALTY PROGRAMS PROVIDE OUTSTANDING USE OF CAPITAL
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• Aimia acquired 28.6% of Club Premier, Aeromexico’s frequent flyer program for cash consideration of US$35 million – currently Aimia exercises joint control with Aeromexico through governance and significant shareholder rights
• After first year in business, Club Premier has 3 million members and delivered:
− US$115 million in Gross Billings− More than 30% Adjusted EBITDA margin (more than US$34.5 million)
• 2011 was first full year of operations with many successes, including:− Launched co-branded credit card with Banamex, Mexico’s leading
retail bank− Signed on key retail partnerships which are expected to launch in early
2012
• The Club Premier investment should exceed Aimia’s target return on equity hurdle of 15 per cent over a 5-year hold period.
• Given Club Premier’s performance to date, it is anticipated that Aimia will recover its initial investment within 3-4 years
• It is anticipated that Club Premier will be in a position to begin paying dividends to Aimia in 2012
CLUB PREMIER: AN OPPORTUNITY TO REPLICATE THESUCCESSFUL AEROPLAN CANADA BUSINESS IN MEXICO
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• and we are well positioned with the advance of mobile and digital in global loyalty . . .
DATA IS AT THE HEART OF EVERYTHING THAT WE DO
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Digital Mobile Social
INTELLIGENT SHOPPER SOLUTIONS: WORLD LEADING EXPERTS IN LOYALTY DATA ANALYTICS
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# 1 drug retailer in world
# 2 supermarketin Switzerland
#2 supermarket in Australia
#2 Grocery retailer in Canada
CARDLYTICS: UNLOCKING THE SIGNIFICANTPOTENTIAL VALUE OF NON-CURRENCY LOYALTY
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• Significantly better ROI from precise targeting
• Unparalleled visibility
• Trusted advertising channel
• Superior consumer experience
• Valuable customer rewards at no cost
• Revenue share
• Protects customer data
Merchant Consumers Banks
• Aimia is a global leader in loyalty management
• New brand supports our vision of inspiring loyalty
• Aimia is best positioned to compete in increasingly intense competitive environment by offering the global full-suite of products and services –coalition, proprietary and data analytics
• Loyalty data analytics and digital/mobile are at the core of everything we do and will define the future of loyalty
• Global loyalty market represents significant growth opportunity by 2015: ~$100B (estimated)
WE ARE DEFINING THE FUTURE OF GLOBAL LOYALTY
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OUR PRIORITIES ARE FOCUSED ON DELIVERING LONG-
TERM SUSTAINABLE
GROWTH FOR OUR SHAREHOLDERS
A STRONG INVESTMENT THESIS AND COMPELLING RISK-ADJUSTED RETURN
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• Barriers to Entry / Member, Partner and Client Stickiness• Full-Suite Offering / Proprietary Systems / Unparalleled Expertise• Strong Brands / Solid Market Share/ Operating Leverage
• Low Capital Intensity / High ROIC• $0.60 Annual Dividend per Common Share• Common Share Repurchase
• Track Record for Consistent Gross Billings Growth• Large Global Loyalty Market Opportunity• Unparalleled Loyalty and Data & Analytics Expertise
• Substantial Free Cash Flow / Increasing Capital Flexibility• Investment Grade Rating• Solid Cash / Reserve Position and Low Refinancing Risk
Attractive Business Model
Strong Free Cash Flow Generation
Attractive Growth
Opportunities
Solid Financial Characteristics
