Alimentation Couche-Tard announces its results for its fourth quarter and fiscal year 2018

• Results of the fourth quarter and of fiscal 2018 included one less week compared with the fourth quarter and fiscal 2017. All quarterly and annual same-store information is presented on a comparable basis of 12 and 52 weeks, respectively.

Quarter

• Net earnings attributable to shareholders of the Corporation ("net earnings") of $392.7 million ($0.70 per share on a diluted basis) for the fourth quarter of fiscal 2018 compared with $277.6 million ($0.49 per share on a diluted basis) for the fourth quarter of fiscal 2017. Excluding certain items for both comparable periods, net earnings for the quarter would have been approximately $336.0 million¹ or $0.59 per share on a diluted basis, compared with $0.52 per share on a diluted basis¹ for the fourth quarter of fiscal 2017, an increase of 13.5%. The Corporation estimates that adjusted net earnings and adjusted net earnings per share, based on an equivalent number of weeks would have been approximately $360.0 million and $0.64, respectively, an increase of 20.9% and 23.1% respectively.
• Total merchandise and service revenues of $3.2 billion, an increase of 25.0%. Same-store merchandise revenues increased by 1.8% in the U.S., by 4.3% in Europe and by 3.6% in Canada. For the first quarter since the acquisition, CST sites same-store merchandise revenues grew both in the U.S and in Canada.
• Merchandise and service gross margin increased by 0.3% in the U.S., to 33.6%, it remained stable in Europe at 44.0% and, in Canada, it decreased by 0.3%, to 34.4%, as a result of the conversion of some of the Esso sites to company-operated stores.
• Total road transportation fuel volumes grew by 33.8%. Same-store road transportation fuel volumes decreased by 0.1% in the U.S. and by 2.9% in Canada, while same-store volumes increased by 0.1% in Europe.
• Road transportation fuel gross margin increased by US 1.82¢ per gallon in the U.S. to US 17.29¢ per gallon, by US 0.89¢ per litre in Europe, to US 8.72¢ per litre and by CA 1.39¢ per litre in Canada, to CA 9.44¢ per litre.
• Current annual synergies run rate related to the CST integration reached approximately $153.0 million.
• Adjusted leverage ratio improved to 3.13:1.
• Increase of CA 1.0¢ of the quarterly dividend, a growth of 11.1%.
• Circle K rebranding project for all Statoil sites in Europe is now completed. The project was launched in Ireland while roll out continues in North America. More than 3,350 stores in North America and more than 1,650 stores in Europe now display the new Circle K global brand.

Fiscal Year 2018

• Diluted net earnings per share were $2.95 compared with $2.12 for fiscal 2017, an increase of 39.2%, while adjusted diluted net earnings per share were $2.60¹ compared with $2.21¹ for fiscal 2017, an increase of 17.6%. The Corporation estimates that adjusted net earnings per share, based on an equivalent number of weeks would have been $2.64, an increase of 19.5%.
• U.S. fuel margins were 19.39¢ for fiscal year 2018, up 4.5% compared to fiscal year 2017.
• Addition of more than 2,100 stores through new openings and acquisitions.
• Return on equity and return on capital employed at 24.8% and 12.0%, respectively, on a pro-forma basis.

 

LAVAL, QC, July 9, 2018 /PRNewswire/ - For its fourth quarter ended April 29, 2018, Alimentation Couche-Tard Inc. (TSX: ATD.A) (TSX: ATD.B) announces net earnings attributable to shareholders of the Corporation of $392.7 million, representing $0.70 per share on a diluted basis. The results for the fourth quarter of fiscal 2018 were affected by a net tax benefit of $69.7 million, of which $4.1 million relate to non-controlling interests, following the finalization of the impact analysis of the "U.S. Tax Cuts and Jobs Act" impacts, pre-tax restructuring costs of $6.9 million, a $4.5 million pre-tax accelerated depreciation and amortization expense in connection with the Corporation's global brand initiative, a pre-tax net foreign exchange loss of $1.0 million, pre-tax acquisition costs of $0.9 million, as well as a $0.6 million pre-tax curtailment gain on defined benefits pension plan obligation. In addition to including 13 weeks, the results for the comparable quarter of fiscal 2017 were affected by a pre-tax net foreign exchange loss of $15.1 million, pre-tax acquisition costs of $6.4 million, a $5.3 million pre-tax accelerated depreciation and amortization expense in connection with the Corporation's global brand initiative, a pre-tax restructuring expense of $2.1 million, as well as a $1.2 million pre-tax curtailment gain on defined benefits pension plan obligation. Excluding these items, the adjusted diluted net earnings per share would have been $0.59 for the fourth quarter of fiscal 2018, compared with $0.52 per share on a diluted basis for the fourth quarter of fiscal 2017, an increase of 13.5%, driven by the contribution from acquisitions, higher road transportation fuel margins, organic growth, as well as lower income tax rate, partly offset by higher financing expenses following the Corporation's recent acquisitions, as well as by one less week in the fourth quarter of fiscal 2018 compared with the fourth quarter of fiscal 2017. The Corporation estimates that adjusted net earnings and adjusted net earnings per share, based on an equivalent number of weeks, would have been approximately $360.0 million and $0.64, respectively, an increase of 20.9% and 23.1% respectively. All financial information is in US dollars unless stated otherwise.

"In fiscal 2018, we achieved impressive year over year growth, driven by both our CST and Holiday acquisitions and organic growth. Our global footprint, which provides both scale advantages and geographic diversification, continues to serve us well," stated Brian Hannasch, President and CEO of Alimentation Couche-Tard. "Once again, we proved our excellence in integration as seen in our early initiatives with Holiday Stationstores and strong results from our CST Brands network. With CST, we are pleased to report that, in less than a year, we realized synergies of approximately $153.0 million, surpassing our expectations. In addition, growth in same-store merchandise revenues, both in the U.S. and Canada, was positive for the first quarter since the acquisition."

"During the quarter, we saw a nice and expected rebound in our U.S. fuel margins and finished fiscal 2018 with margins up 4.5% compared to fiscal 2017. Same-store merchandise revenues also increased across the network including in Canada, reversing the trend of recent quarters. These results are encouraging as we continue to focus both on operation excellence and driving traffic to our stores," concluded Brian Hannasch.

Claude Tessier, Chief Financial Officer stated: "Our strong results this quarter, proven in our operational performance and successful integration of our acquisitions, has generated cash flow allowing us to accelerate our deleveraging plan as evidenced by our adjusted leverage ratio of 3.13:1. This reduction in our debt results from our constant focus on financial discipline and strengthening of our balance sheet."  He added, "We are also pleased to announce that we have increased our quarterly dividend by 1.0 ¢, or 11.1%, providing additional value for our shareholders."

Significant Items of the Fourth Quarter of Fiscal 2018

• During the quarter, we finalized our analysis of the impacts of the "U.S. Tax Cuts and Jobs Act", and consequently recorded an additional net tax benefit of $69.7 million, of which $4.1 million relate to non-controlling interests, mostly derived from the finalization of our estimate of the impact of the Deemed Repatriation Transition Tax ("Transition tax").
• During the quarter, as part of our costs reduction initiatives and the search for synergies aimed at improving our efficiency, we made the decision to proceed with the restructuring of certain of our European and U.S. operations. As such, an additional restructuring expense of $6.9 million was recorded during the fourth quarter.
• As of April 29, 2018, our annual synergies run rate for the CST acquisition reached approximately $153.0 million. These synergies should result in reductions in operating, selling, administrative and general expenses, as well as improvements in road transportation fuel and merchandises distribution and supply costs. We expect that our synergies will reach $215.0 million¹ over the 3 years following the close of the transaction.
• During the quarter, we adjusted and finalized our assessment of the fair value of the assets acquired, the liabilities assumed and the goodwill for the CST acquisition. The adjustments we made had the following impact on our previously reported net earnings:

 

 

• During the fourth quarter, we successfully completed the rebranding of all Statoil stores to Circle K. The deployment of the Circle K brand has started in Ireland while the rollout in North America is progressing steadily. More than 3,350 stores in North America and more than 1,650 stores in Europe are now proudly displaying our new global brand. In connection with this rebranding project, a pre-tax depreciation and amortization expense of $4.5 million was recorded to earnings for the fourth quarter of fiscal 2018.

 

Other changes in our Network

• During the fourth quarter of fiscal 2018, we acquired 3 company-operated stores through distinct transactions, for a total of 11 company-operated stores since the beginning of the fiscal year 2018.
• During the fourth quarter of fiscal 2018, we completed the construction, relocation or reconstruction of 22 stores, reaching a total of 88 stores since the beginning of fiscal 2018. As of April 29, 2018, 29 stores were under construction and should open in the upcoming quarters.

Summary of changes in our store network during the fourth quarter and fiscal 2018

The following table presents certain information regarding changes in our store network over the 12-week period ended April 29, 2018:

 

 

The following table presents certain information regarding changes in our store network over the 52-week period ended April 29, 2018:

 

 

Exchange Rate Data

We use the US dollar as our reporting currency, which provides more relevant information given the predominance of our operations in the United States.

The following table sets forth information about exchange rates based upon closing rates expressed as US dollars per comparative currency unit:

 

Summary analysis of consolidated results for the fourth quarter and fiscal 2018

The following table highlights certain information regarding our operations for the 12 and 52-week periods ended April 29, 2018, and for the 13 and 53-week periods ended April 30, 2017. CAPL refers to CrossAmerica Partners LP.