Canadian Tire Corporation February 2010 F Forward-looking - PowerPoint PPT Presentation

Canadian Tire Corporation February 2010

F Forward-looking Information d l ki I f i This disclosure contains statements that are forward-looking These forward-looking statements This disclosure contains statements that are forward looking. These forward looking statements relate to, among other things, our objectives, goals, strategies, intentions, plans, beliefs, expectations and estimates, and can generally be identified by the use of words such as “may”, “will”, “could”, “should”, “would”, “suspect”, “outlook”, “expect”, “intend”, “estimate”, “anticipate”, “believe”, “plan”, “forecast”, “objective” and “continue” (or the negative thereof) and words and expressions of similar import, and include statements concerning possible or assumed future results Certain material factors or assumptions are applied in making forward looking results. Certain material factors or assumptions are applied in making forward-looking statements, and actual results may differ materially from those expressed or implied in such statements. Information about material factors that could cause actual results to differ materially from expectations and about material factors or assumptions applied in making forward-looking statements may be found in the body of this document, as well as in the Q3 2009 Management’s Discussion and Analysis (“MD&A”). The forward-looking information contained in this document is presented for the purpose of assisting the Company's security holders and financial analysts in understanding its financial position and results of operations as at and for the periods ended on the dates presented and the Company’s strategic priorities and objectives, and may not be appropriate for other purposes. When relying on the forward-looking statements to make decisions with respect to the Compan the Company, investors and others should carefully consider the foregoing factors and other in estors and others sho ld caref ll consider the foregoing factors and other uncertainties and potential events. Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, such statements involve risks and uncertainties, and undue reliance should not be placed on such statements. The Company does not undertake to update any forward-looking statements, including those statements that are incorporated by reference herein, whether written or oral, that may be made from time to p y y time by or on its behalf, except in accordance with applicable securities laws. 2

Core CTR Business and Four Supporting Businesses C CTR B i d F S i B i CTR Financial Services Mark’s Petroleum PartSource 479 stores >5 million 378 stores 272 gas bars 87 stores MasterCard accounts Canadian Tire Retail Canadian Tire Mark’s Work Canadian Tire PartSource is a is one of Canada’s is one of Canada s Financial Services Financial Services Wearhouse is one of Wearhouse is one of Petroleum is one of Petroleum is one of chain of specialty chain of specialty most shopped offers Canadian Tire- Canada’s leading Canada’s largest automotive hard general merchandise branded credit cards, apparel retailers. independent parts stores, as well retailers and a leader personal loans, lines Mark’s sells work, gasoline retailers as a supplier for in each of its three of credit, insurance work-related, casual with 272 gas bars Canadian Tire core product and warranty and active-wear including 267 Retail’s cornerstone categories – categories – products, as well as products as well as clothing and clothing and convenience stores convenience stores automotive automotive Automotive, Leisure, high-interest and tax- footwear as well as and kiosks and 73 business. Its expert and Home. free savings accounts. health-care and car washes, creating staff sells business-to- customer loyalty to competitively priced business apparel. drive growth for auto parts, catering Canadian Tire Retail to professional and Canadian Tire d C di Ti automotive installers t ti i t ll Financial Services. and serious do-it- Canadian Tire’s products and services provide yourselfers. the essentials of everyday living for people of all ages 3

C Core Assets A  Store Networks – Canadian Tire Retail: approximately 400 new or rebuilt stores since 1994 – Mark’s: approximately 280 stores built, upgraded or acquired since 2002 – Petroleum: 2/3 of sites now upgraded or rebranded – PartSource: now has close to 100 sites, including 10 Hub stores  Supply Chain – New Canadian Tire Retail DC in Eastern Quebec  All Financial Services credit cards relaunched with PayPass technology in 2008; Beginning rollout of chip cards in 2010 4

Strategic and Operational Strengths S i d O i l S h  One of Canada’s most trusted brands  Loyal customer base across all of our businesses  Products and service offering targeted at the needs (not just wants) of everyday Canadian families at competitive prices  Financial Services one of the best run credit card businesses in the country – very capable risk management team  Financially strong company, fully funded and able to adapt and respond to the changing Canadian economy We are well-positioned for days like today and tomorrow 5

2010 S 2010 Strategic Priorities i P i i i  Optimize the significant investments made in store and supply chain infrastructure and drive sustainable, long-term earnings growth   Build the strength of the core Canadian Tire Retail business and Build the strength of the core Canadian Tire Retail business and brand – Improve overall customer service – Leverage industry-leading core assets in automotive business Leverage industry-leading core assets in automotive business – Position each business unit to actively support and drive consumers to the core Canadian Tire Retail business A balanced approach to maximize earnings potential maximize earnings potential 6 6

2010 I i i 2010 Initiatives i Key areas of focus in 2010 will build on the momentum of programs and initiatives begun i in 2009: 2009  Continue roll-out of capital-light CTR Smart and Small Market stores  Refocus and align core automotive assets with single focus for growing market share  Improving the customer experience at CTR  Staffing and process changes within CTR Marketing, Merchandising and Store Operations to improve core processes  Development of redesigned and enhanced loyalty program  Centralize key support functions to improve operating efficiencies  “Clothes That Work” at Mark’s Clothes That Work at Mark s  Enhance supply chain and operations capabilities at Mark’s  Ongoing focus on credit risk management at Financial Services   E h Enhance financial performance across the organization and improve operating and fi i l f th i ti d i ti d strategic planning process 7

Growth Initiatives Growth Initiatives Initiative Future Impact / Rationale Real estate projects Focused growth and upgrade of network to strengthen brand and generate returns, including CTR capital-light formats •Canadian Tire Retail stores (Smart and Small Market stores) •Petroleum sites P t l it •Mark’s stores •PartSource stores Financial Services Drive managed growth of receivables with benefits of relaunched cards with PayPass capability, testing of further new credit cards, including new Options Visa card, and select investments in balance transfer offers Reduction in gross capital expenses to $273 million in 2009 (2010 Capex in the range of $280 million to $300 million) Focused on managing working capital and investing in initiatives that will g g g p g deliver positive cash flow 8

CTR S CTR Small Market Store ll M k S Before Before  Identified 100+ underserved markets  Opportunity to generate $5-$9 million in retail sales per store, mostly incremental  Low-cost building – great use of outdoor space; intense merchandising  Mark’s Work Wearhouse within each store and Petroleum Gas Bar (where appropriate) Petroleum Gas Bar (where appropriate)  Early results and customer research very positive  9 opened to-date After 9

CTR S CTR Smart Store S   Drive growth and improve sales productivity by reallocating space to high growth Drive growth and improve sales productivity by reallocating space to high growth and ‘cornerstone’ categories (eg. storage & organization, sports & recreation)  Added traffic-driving businesses (eg. pet foods, food test)   Improved customer experience – navigation better signage logical adjacencies Improved customer experience navigation, better signage, logical adjacencies, enhanced service features (call buttons, service desks, customer pick-up, etc.)  Leveraging investments made in square footage – most projects retrofits   Capital-light projects; cost is approximately $0 3 million/store Capital light projects; cost is approximately $0.3 million/store  Expect approximately 6-8% same store sales growth in year one  10 new or replacement stores and 26 retrofit projects opened to-date  59-60 retrofits planned in 2010 10