Fourth Quarter 2020
- Net earnings attributable to shareholders of the Corporation ("net earnings") were
$576.3 million or$0.52 per diluted share for the fourth quarter of fiscal 2020 compared with$293.1 million or$0.26 per diluted share for the fourth quarter of fiscal 2019. Adjusted net earnings were$521.0 million 1 compared with$289.0 million 1 for the fourth quarter of fiscal 2019. Adjusted net earnings per share on a diluted basis were$0.47 1, representing an increase of 80.8% from$0.26 1 last year. - Due to the implementation of restrictive social measures in the various geographies in which the Corporation operates, the COVID-19 pandemic had a meaningful impact on financial results, mostly driven by declining traffic across the network. Fuel volumes declined rapidly following the initial response to the crisis but stabilized during April, while fuel margins overall benefited from the rapid and steep decline in crude prices as well as by changes in the competitive landscape. Merchandise sales benefited from a higher average basket which helped offset in part the lower number of visitors.
- Total merchandise and service revenues of
$3.2 billion , a decrease of 2.6%. Same-store merchandise revenues decreased 0.5% in theU.S. , 6.5% inEurope , while they increased 4.7% inCanada . - Merchandise and service gross margin decreased 0.9% in the
U.S. to 33.0%, 1.2% inEurope to 40.6%, and 1.2% inCanada to 31.8%, all impacted by product mix. - Same-store road transportation fuel volume decreased 18.3% in the
U.S. , 13.4% inEurope , and 23.5% inCanada . - Road transportation fuel gross margin increased by 28.37¢ per gallon in the
U.S. to 46.88¢ per gallon, by US 0.39¢ per liter inEurope to US 8.67¢ per liter, and by CA 0.27¢ per liter inCanada to CA 8.40¢ per liter. - Took mitigating actions to adapt the business, including reducing non-critical capital expenditures, marketing and promotional expenses, and various professional fees. Adjusted store hours where appropriate and shared best practices across business units to optimize decision-making and minimize business risks.
- To ensure customers and employees safety, the Corporation pulled forward enabling technologies that could become key to serving customers beyond the pandemic, including the expansion of home delivery, Click & Collect and curbside delivery, as well as in-app ordering and prepayment.
- The Corporation is in a strong cash position, with access to approximately
$4.7 billion through available cash and its revolving unsecured operating credit facility.
Fiscal Year 2020
- Net earnings per diluted share of
$2.09 1 compared with$1.62 1 for fiscal 2019, an increase of 29.0%, while adjusted net earnings per diluted share were$1.97 1 compared with$1.63 1 for fiscal 2019, an increase of 20.9%. Circle K rebranding project continues inNorth America with more than 6,300 stores now displaying the newCircle K global brand, representing more than 86.0% of the overall North American project.- Increase in the annual dividend of 17.8%, from CA 22.5¢ to CA 26.5¢.
- Return on capital employed² improved from 12.6% to 15.0%, on a pro forma basis.
- Adjusted leverage ratio², improved from 2.18 : 1 to 1.60 : 1, on a pro forma basis, driven by strong earnings.
_____________________________ | |
1 | Please refer to the section "Net earnings attributable to shareholders of the Corporation ("net earnings") and adjusted net earnings attributable to shareholders of the Corporation ("adjusted net earnings")" of this press release for additional information on this performance measure not defined by IFRS. This performance measure, for the 12 and 52-week periods ended |
2 | Please refer to the section "Summary Analysis of Consolidated Results for the Fourth Quarter and Fiscal 2020" of this press release for additional information on this performance measure not defined by IFRS. These performance measures, for the 52-week period ended |
LAVAL, QC,
"This year,
"We also had a strong fourth quarter with positive traffic trends to begin with before we endured significant decline in traffic and fuel volumes with the pandemic stay-at-home orders implemented across our global footprint. Our customers changed their shopping behaviors moving to larger baskets with more impulse and emergency items, and we innovated quickly to meet their desire for less touchpoints while visiting our locations. Most of all, we placed the health and safety of our employees and customers at the forefront of all our decision making and were committed to being part of the solution in the communities where we work and live. I want to thank all our employees, customers, partners, and shareholders for their trust in the business during these troubling times. I am deeply proud of the courage, care, and commitment our employees showed towards each other and our customers," concluded
Significant Items of the Fourth Quarter of Fiscal 2020
- Due to the implementation of restrictive social measures in the various geographies in which we operate, the COVID-19 pandemic had a meaningful impact on our financial results, mostly driven by declining traffic in our entire network. These measures led to fewer visits to our stores starting mid-March in
Europe and slightly later inNorth America . The impact of lower traffic was partially offset by the purchasing of larger baskets by consumers. From a merchandise category standpoint, product demand shifted during the pandemic negatively impacting margins due to a different product mix. From a fuel perspective, volumes declined rapidly during the first weeks following the stay-at-home orders across the different regions, while margins remained healthy. Additionally, various measures were enacted to support the health and safety of our employees and customers driving incremental operating expenses. These additional costs were partly offset by initiatives implemented across our network to reduce our controllable expenses. - During the fourth quarter and entire fiscal 2020, we repurchased 8,696,424 and 16,354,384 Class B subordinate voting shares, respectively. These repurchases were settled for net amounts of
$233.9 million and$470.8 million , respectively. The last share repurchase was traded onMarch 26, 2020 . The share repurchase program expired onApril 9, 2020 , and was not renewed. - During the fourth quarter of fiscal 2020, as part of our cost 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 operations. As such, an additional restructuring expense of
$0.9 million was recorded to earnings of the fourth quarter of fiscal 2020.
_____________________________ | |
1 | Please refer to the section "Net earnings attributable to shareholders of the Corporation ("net earnings") and adjusted net earnings attributable to shareholders of the Corporation ("adjusted net earnings")" of this press release for additional information on this performance measure not defined by IFRS. This performance measure, for the 12 and 52-week periods ended |
Changes in our Network
- On
March 26, 2020 , we announced the closing of an asset exchange agreement with CAPL (the "November 2019 asset exchange agreement") under which we transferred a portion of ourU.S. wholesale road transportation fuel operations, which consisted of wholesale fuel supply agreements covering 333 sites, 33 fee and leasehold properties, also covered by wholesale fuel supply agreements, for a total of 366 supply agreements, as well as a cash consideration of approximately$14.0 million , receiving in return CAPL's 17.5% limited partnership interest inCST Fuel Supply LP . We recognized a net gain on disposal of$41.0 million in relation to this transaction. This transaction also led to the release of a deferred tax asset valuation allowance of$4.6 million in relation with capital losses which were not expected to be used before their expiration date. - On
February 25, 2020 , and onApril 7, 2020 , we closed the third and fourth transactions of the asset exchange agreement with CAPL ("December 2018 asset exchange agreement"). In these transactions, we transferred 23 Circle KU.S. stores for a total value of approximately$24.0 million . In exchange, CAPL transferred the real estate for 12 properties for a total value of approximately$23.0 million . - On
May 5, 2020 , subsequent to the end of the fourth quarter of fiscal 2020, we closed the fifth transaction of theDecember 2018 asset exchange agreement with CAPL. In this fifth transaction, we transferred 29 Circle KU.S. stores for a total value of approximately$32.0 million . In exchange, CAPL transferred the real estate for 13 properties for an equivalent value. The remaining assets of this agreement are expected to be exchanged in the second half of calendar 2020. - During the fourth quarter of fiscal 2020, we acquired 3 company-operated stores, reaching a total of 13 stores since the beginning of fiscal 2020.
- During the fourth quarter of fiscal 2020, we completed the construction of 11 stores and the relocation or reconstruction of 6 stores, reaching a total of 85 stores since the beginning of fiscal year 2020. As of
April 26, 2020 , another 30 stores were under construction and should open in the upcoming quarters.
Summary of changes in our store network during the fourth quarter and fiscal 2020
The following table presents certain information regarding changes in our store network over the 12-week period ended
12-week period ended | |||||
Type of site | Company- | CODO | DODO | Franchised and | Total |
Number of sites, beginning of period | 9,732 | 449 | 1,025 | 1,290 | 12,496 |
Acquisitions | 3 | — | — | — | 3 |
Openings / constructions / additions | 10 | 1 | 18 | 27 | 56 |
Closures / disposals / withdrawals | (33) | (26) | (345) | (27) | (431) |
Store conversion | (21) | 29 | (9) | 1 | — |
Number of sites, end of period | 9,691 | 453 | 689 | 1,291 | 12,124 |
2,347 | |||||
Total network | 14,471 | ||||
Number of automated fuel stations included in the period-end | 982 | — | 10 | — | 992 |
The following table presents certain information regarding changes in our store network over the 52-week period ended
52-week period ended | |||||
Type of site | Company- | CODO | DODO | Franchised and | Total |
Number of sites, beginning of period | 9,794 | 514 | 1,052 | 1,215 | 12,575 |
Acquisitions | 30 | — | — | — | 30 |
Openings / constructions / additions | 72 | 3 | 37 | 163 | 275 |
Closures / disposals / withdrawals | (128) | (151) | (389) | (88) | (756) |
Store conversion | (77) | 87 | (11) | 1 | — |
Number of sites, end of period | 9,691 | 453 | 689 | 1,291 | 12,124 |
2,347 | |||||
Total network | 14,471 |
New Accounting Standard Adopted by the Corporation
As of
12-week period ended | |||||||
(in millions of US dollars) | Pre – IFRS 16 | Excluding: rent | Including: | Other | Total estimated | Pro forma - | Total estimated |
Revenues | 13,113.3 | — | — | 10.0 | 10.0 | 13,123.3 | 6.0 |
Cost of sales | 11,135.0 | — | — | — | — | 11,135.0 | — |
Gross profit | 1,978.3 | — | — | 10.0 | 10.0 | 1,988.3 | 6.0 |
Operating, selling, administrative and | 1,339.5 | (91.0) | — | 7.0 | (84.0) | 1,255.5 | (84.0) |
Restructuring costs | 2.6 | — | — | — | — | 2.6 | — |
Gain on disposal of property and | (15.5) | — | — | — | — | (15.5) | — |
Depreciation, amortization and | 241.5 | (4.0) | 90.0 | — | 86.0 | 327.5 | 84.0 |
Total operating expenses | 1,568.1 | (95.0) | 90.0 | 7.0 | 2.0 | 1,570.1 | — |
Operating income | 410.2 | 95.0 | (90.0) | 3.0 | 8.0 | 418.2 | 6.0 |
Share of earnings of joint ventures | 3.6 | — | — | — | — | 3.6 | — |
EBITDA | 655.3 | 91.0 | — | 3.0 | 94.0 | 749.3 | 89.0 |
Financial expenses | 83.5 | (5.0) | 21.0 | — | 16.0 | 99.5 | 14.0 |
Financial revenues | (3.8) | — | — | — | — | (3.8) | — |
Foreign exchange gain | (1.1) | — | — | — | — | (1.1) | — |
Net financial expenses | 78.6 | (5.0) | 21.0 | — | 16.0 | 94.6 | 14.0 |
Earnings before income taxes | 335.2 | 100.0 | (111.0) | 3.0 | (8.0) | 327.2 | (8.0) |
Income taxes | 45.3 | 25.0 | (28.0) | 1.0 | (2.0) | 43.3 | (2.0) |
Net earnings including non-controlling | 289.9 | 75.0 | (83.0) | 2.0 | (6.0) | 283.9 | (6.0) |
Net loss attributable to non-controlling | 3.2 | (1.0) | 5.0 | (4.0) | — | 3.2 | — |
Net earnings attributable to | 293.1 | 74.0 | (78.0) | (2.0) | (6.0) | 287.1 | (6.0) |
(1) | Depreciation and interest expenses are based on our assessment of Fiscal 2020 impact. |
52-week period ended | |||||||
(in millions of US dollars) | Pre – IFRS 16 | Excluding: rent | Including: | Other | Total estimated | Pro forma - | Total estimated |
Revenues | 59,117.6 | — | — | 40.0 | 40.0 | 59,157.6 | 20.0 |
Cost of sales | 49,922.7 | — | — | — | — | 49,922.7 | — |
Gross profit | 9,194.9 | — | — | 40.0 | 40.0 | 9,234.9 | 20.0 |
Operating, selling, administrative and | 5,646.1 | (390.0) | — | 28.0 | (362.0) | 5,284.1 | (361.0) |
Restructuring costs | 10.5 | — | — | — | — | 10.5 | — |
Gain on disposal of property and | (21.3) | — | — | — | — | (21.3) | — |
Depreciation, amortization and | 1,070.7 | (18.0) | 388.0 | — | 370.0 | 1,440.7 | 356.0 |
Total operating expenses | 6,706.0 | (408.0) | 388.0 | 28.0 | 8.0 | 6,714.0 | (5.0) |
Operating income | 2,488.9 | 408.0 | (388.0) | 12.0 | 32.0 | 2,520.9 | 25.0 |
Share of earnings of joint ventures | 23.4 | — | — | — | — | 23.4 | — |
EBITDA | 3,583.0 | 390.0 | — | 12.0 | 402.0 | 3,985.0 | 381.0 |
Financial expenses | 338.7 | (20.0) | 90.0 | — | 70.0 | 408.7 | 62.0 |
Financial revenues | (13.3) | — | — | — | — | (13.3) | — |
Foreign exchange gain | (5.3) | — | — | — | — | (5.3) | — |
Net financial expenses | 320.1 | (20.0) | 90.0 | — | 70.0 | 390.1 | 62.0 |
Earnings before income taxes | 2,192.2 | 428.0 | (478.0) | 12.0 | (38.0) | 2,154.2 | (37.0) |
Income taxes | 370.9 | 108.0 | (120.0) | 3.0 | (9.0) | 361.9 | (9.0) |
Net earnings including non-controlling | 1,821.3 | 320.0 | (358.0) | 9.0 | (29.0) | 1,792.3 | (28.0) |
Net loss attributable to non-controlling | 12.6 | (3.0) | 20.0 | (16.0) | 1.0 | 13.6 | — |
Net earnings attributable to | 1,833.9 | 317.0 | (338.0) | (7.0) | (28.0) | 1,805.9 | (28.0) |
(1) | Depreciation and interest expenses are based on our assessment of Fiscal 2020 impact. |
In order to facilitate the understanding of our financial performance, we have adjusted some of our previously reported performance measures. All adjustments related to IFRS 16 are clearly identified and are based on the calculations presented in the tables above.
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 following table sets forth information about exchange rates based upon closing rates expressed as US dollars per comparative currency unit:
12-week periods ended | 52-week periods ended | |||
Average for period | ||||
Canadian dollar | 0.7275 | 0.7510 | 0.7494 | 0.7595 |
Norwegian krone | 0.1005 | 0.1165 | 0.1096 | 0.1195 |
Swedish krone | 0.1016 | 0.1077 | 0.1038 | 0.1108 |
Danish krone | 0.1467 | 0.1514 | 0.1485 | 0.1542 |
Zloty | 0.2485 | 0.2627 | 0.2568 | 0.2675 |
Euro | 1.0953 | 1.1298 | 1.1087 | 1.1499 |
Ruble | 0.0141 | 0.0153 | 0.0153 | 0.0153 |
Summary Analysis of Consolidated Results for the Fourth Quarter and Fiscal 2020
The following table highlights certain information regarding our operations for the 12 and 52-week periods ended
12-week periods ended | 52-week periods ended | |||||
(in millions of US dollars, unless otherwise stated) |
|
| Variation % |
|
| Variation |
Statement of Operations Data: | ||||||
Merchandise and service revenues(1): | ||||||
2,433.8 | 2,469.9 | (1.5) | 10,918.4 | 10,781.8 | 1.3 | |
312.9 | 343.3 | (8.9) | 1,416.3 | 1,457.8 | (2.8) | |
486.7 | 485.8 | 0.2 | 2,302.7 | 2,172.7 | 6.0 | |
CAPL | — | 20.1 | (100.0) | 29.6 | 95.8 | (69.1) |
Elimination of intercompany transactions with CAPL | — | (0.5) | (100.0) | (0.8) | (2.7) | (70.4) |
Total merchandise and service revenues | 3,233.4 | 3,318.6 | (2.6) | 14,666.2 | 14,505.4 | 1.1 |
Road transportation fuel revenues: | ||||||
4,304.1 | 6,227.1 | (30.9) | 25,724.8 | 28,195.6 | (8.8) | |
1,360.4 | 1,960.1 | (30.6) | 7,481.1 | 8,380.7 | (10.7) | |
660.2 | 1,033.3 | (36.1) | 4,415.7 | 4,957.9 | (10.9) | |
CAPL | — | 436.3 | (100.0) | 1,365.7 | 2,211.8 | (38.3) |
Elimination of intercompany transactions with CAPL | — | (80.0) | (100.0) | (288.0) | (444.7) | (35.2) |
Total road transportation fuel revenues | 6,324.7 | 9,576.8 | (34.0) | 38,699.3 | 43,301.3 | (10.6) |
Other revenues(2): | ||||||
8.8 | 4.9 | 79.6 | 36.9 | 21.8 | 69.3 | |
115.7 | 197.0 | (41.3) | 652.0 | 1,220.7 | (46.6) | |
4.6 | 4.8 | (4.2) | 21.3 | 24.5 | (13.1) | |
CAPL | — | 15.5 | (100.0) | 65.6 | 61.2 | 7.2 |
Elimination of intercompany transactions with CAPL | — | (4.3) | (100.0) | (8.9) | (17.3) | (48.6) |
Total other revenues | 129.1 | 217.9 | (40.8) | 766.9 | 1,310.9 | (41.5) |
Total revenues | 9,687.2 | 13,113.3 | (26.1) | 54,132.4 | 59,117.6 | (8.4) |
Merchandise and service gross profit(1): | ||||||
802.3 | 836.4 | (4.1) | 3,686.7 | 3,646.3 | 1.1 | |
127.0 | 143.4 | (11.4) | 587.6 | 609.0 | (3.5) | |
154.9 | 160.4 | (3.4) | 750.9 | 729.7 | 2.9 | |
CAPL | — | 4.9 | (100.0) | 6.8 | 23.3 | (70.8) |
Elimination of intercompany transactions with CAPL | — | (0.4) | (100.0) | (0.8) | (2.3) | (65.2) |
Total merchandise and service gross profit | 1,084.2 | 1,144.7 | (5.3) | 5,031.2 | 5,006.0 | 0.5 |
Road transportation fuel gross profit: | ||||||
903.5 | 450.0 | 100.8 | 3,131.3 | 2,471.5 | 26.7 | |
206.2 | 226.0 | (8.8) | 932.0 | 981.1 | (5.0) | |
63.4 | 82.5 | (23.2) | 344.2 | 392.8 | (12.4) | |
CAPL | — | 22.3 | (100.0) | 57.5 | 103.6 | (44.5) |
Total road transportation fuel gross profit | 1,173.1 | 780.8 | 50.2 | 4,465.0 | 3,949.0 | 13.1 |
Other revenues gross profit(2): | ||||||
8.8 | 4.9 | 79.6 | 36.9 | 21.8 | 69.3 | |
19.8 | 31.9 | (37.9) | 123.6 | 149.7 | (17.4) | |
4.6 | 4.8 | (4.2) | 21.2 | 24.5 | (13.5) | |
CAPL | — | 15.5 | (100.0) | 65.7 | 61.2 | 7.4 |
Elimination of intercompany transactions with CAPL | — | (4.3) | (100.0) | (8.9) | (17.3) | (48.6) |
Total other revenues gross profit | 33.2 | 52.8 | (37.1) | 238.5 | 239.9 | (0.6) |
Total gross profit | 2,290.5 | 1,978.3 | 15.8 | 9,734.7 | 9,194.9 | 5.9 |
Operating, selling, administrative and general expenses | ||||||
Excluding CAPL | 1,231.9 | 1,322.6 | (6.9) | 5,276.4 | 5,584.8 | (5.5) |
CAPL | — | 21.6 | (100.0) | 46.8 | 80.5 | (41.9) |
Elimination of intercompany transactions with CAPL | — | (4.7) | (100.0) | (9.2) | (19.2) | (52.1) |
Total Operating, selling, administrative and general expenses | 1,231.9 | 1,339.5 | (8.0) | 5,314.0 | 5,646.1 | (5.9) |
Restructuring costs | 0.9 | 2.6 | (65.4) | 4.5 | 10.5 | (57.1) |
Gain on disposal of property and equipment and other assets | (19.3) | (15.5) | 24.5 | (83.1) | (21.3) | 290.1 |
Depreciation, amortization and impairment | ||||||
Excluding CAPL | 307.4 | 223.6 | 37.5 | 1,282.9 | 927.2 | 38.4 |
CAPL | — | 17.9 | (100.0) | 53.9 | 143.5 | (62.4) |
Total depreciation, amortization and impairment | 307.4 | 241.5 | 27.3 | 1,336.8 | 1,070.7 | 24.9 |
Operating income | ||||||
Excluding CAPL | 769.6 | 407.1 | 89.0 | 3,137.7 | 2,534.0 | 23.8 |
CAPL | — | 3.1 | (100.0) | 25.3 | (44.7) | (156.6) |
Elimination of intercompany transactions with CAPL | — | — | — | (0.5) | (0.4) | 25.0 |
Total operating income | 769.6 | 410.2 | 87.6 | 3,162.5 | 2,488.9 | 27.1 |
Net financial expenses | 53.2 | 78.6 | (32.3) | 284.5 | 320.1 | (11.1) |
Net earnings including non-controlling interests | 578.3 | 289.9 | 99.5 | 2,357.6 | 1,821.3 | 29.4 |
Net (earnings) loss attributable to non-controlling interests | (2.0) | 3.2 | (162.5) | (4.0) | 12.6 | (131.7) |
Net earnings attributable to shareholders of the Corporation | 576.3 | 293.1 | 96.6 | 2,353.6 | 1,833.9 | 28.3 |
Per Share Data: | ||||||
Basic net earnings per share (dollars per share) | 0.52 | 0.26 | 100.0 | 2.10 | 1.62 | 29.6 |
Diluted net earnings per share (dollars per share) | 0.52 | 0.26 | 100.0 | 2.09 | 1.62 | 29.0 |
Adjusted diluted net earnings per share (dollars per share)(13) | 0.47 | 0.26 | 80.8 | 1.97 | 1.63 | 20.9 |
12-week periods ended | 52-week periods ended | |||||
(in millions of US dollars, unless otherwise stated) |
|
| Variation % |
|
| Variation % |
Other Operating Data – excluding CAPL: | ||||||
Merchandise and service gross margin(1): | ||||||
Consolidated | 33.5% | 34.6% | (1.1) | 34.3% | 34.6% | (0.3) |
33.0% | 33.9% | (0.9) | 33.8% | 33.8% | — | |
40.6% | 41.8% | (1.2) | 41.5% | 41.8% | (0.3) | |
31.8% | 33.0% | (1.2) | 32.6% | 33.6% | (1.0) | |
Growth of (decrease in) same-store merchandise revenues(3): | ||||||
(0.5%) | 3.4% | 2.1% | 4.1% | |||
(6.5%) | 4.7% | 0.1% | 4.8% | |||
4.7% | 4.2% | 2.8% | 5.2% | |||
Road transportation fuel gross margin: | ||||||
46.88 | 18.51 | 153.3 | 31.19 | 23.60 | 32.2 | |
8.67 | 8.28 | 4.7 | 8.48 | 8.61 | (1.5) | |
8.40 | 8.13 | 3.3 | 7.91 | 8.38 | (5.6) | |
Total volume of road transportation fuel sold: | ||||||
1,993.5 | 2,513.2 | (20.7) | 10,476.1 | 10,979.5 | (4.6) | |
2,378.9 | 2,730.6 | (12.9) | 10,990.3 | 11,391.2 | (3.5) | |
1,035.7 | 1,359.9 | (23.8) | 5,815.6 | 6,198.9 | (6.2) | |
Growth of (decrease in) same-store road transportation fuel volume: | ||||||
(18.3%) | 0.3% | (3.9%) | 0.7% | |||
(13.4%) | (1.8)% | (3.9 %) | (0.9)% | |||
(23.5%) | (0.4)% | (6.0%) | (1.6)% |
(in millions of US dollars, unless otherwise stated) | Variation $ | ||||
Balance Sheet Data(5): | |||||
Total assets (including | 25,679.5 | 25,033.0 | 646.5 | ||
Interest-bearing debt (including | 10,379.3 | 9,575.3 | 804.0 | ||
Equity attributable to shareholders of the Corporation | 10,066.6 | 8,913.7 | 1,152.9 | ||
Indebtedness Ratios(7): | |||||
Net interest-bearing debt/total capitalization(6)(8) | 0.40 : 1 | 0.48 : 1 | |||
Leverage ratio(9) | 1.54 : 1 | 2.09 : 1 | |||
Adjusted leverage ratio(10) | 1.60 : 1 | 2.18 : 1 | |||
Returns(7): | |||||
Return on equity(11) | 24.8% | 21.9% | |||
Return on capital employed(12) | 15.0% | 12.6% |
(1) | Includes revenues derived from franchise fees, royalties, suppliers' rebates on some purchases made by franchisees and licensees, as well as from wholesale of merchandise. |
(2) | Includes revenues from the rental of assets and from the sale of aviation fuel, energy for stationary engines and marine fuel (until |
(3) | Does not include services and other revenues (as described in footnotes 1 and 2 above). Growth in |
(4) | For company-operated stores only. |
(5) | The balance sheet data as at |
(6) | This measure is presented including the following balance sheet accounts: Current portion of long-term debt, Long-term debt, Current portion of lease liabilities, and Lease liabilities. |
(7) | Until |
(8) | This measure is presented for information purposes only and represents a measure of financial condition used especially in financial circles. It represents the following calculation: interest-bearing debt, net of cash and cash equivalents and temporary investments divided by the addition of shareholders' equity and interest-bearing debt, net of cash and cash equivalents and temporary investments. It does not have a standardized meaning prescribed by IFRS and therefore may not be comparable to similar measures presented by other public corporations. For the purpose of this calculation, until |
(9) | This measure is presented for information purposes only and represents a measure of financial condition used especially in financial circles. It represents the following calculation: interest-bearing debt, net of cash and cash equivalents and temporary investments divided by EBITDA (Earnings before Interest, Tax, Depreciation, Amortization and Impairment) adjusted for specific items. It does not have a standardized meaning prescribed by IFRS and therefore may not be comparable to similar measures presented by other public corporations. For the purpose of this calculation, until |
(10) | This measure is presented for information purposes only and represents a measure of financial condition used especially in financial circles. It represents the following calculation: interest-bearing debt plus the product of eight times rent expense, net of cash and cash equivalents and temporary investments divided by EBITDAR (Earnings before Interest, Tax, Depreciation, Amortization, Impairment and Rent expense) adjusted for specific items. It does not have a standardized meaning prescribed by IFRS and therefore may not be comparable to similar measures presented by other public corporations. For the purpose of this calculation, until |
(11) | This measure is presented for information purposes only and represents a measure of performance used especially in financial circles. It represents the following calculation: net earnings divided by average equity for the corresponding period. It does not have a standardized meaning prescribed by IFRS and therefore may not be comparable to similar measures presented by other public corporations. This performance measure, for the 52-week period ended |
(12) | This measure is presented for information purposes only and represents a measure of performance used especially in financial circles. It represents the following calculation: earnings before income taxes and interests divided by average capital employed for the corresponding period. Capital employed represents total assets less short-term liabilities not bearing interests. It does not have a standardized meaning prescribed by IFRS and therefore may not be comparable to similar measures presented by other public corporations. This performance measure, for the 52-week period ended |
(13) | These performance measures, for the 12 and 52-week periods ended |
Revenues
Our revenues were
For fiscal 2020, our revenues decreased by
Merchandise and service revenues
Total merchandise and service revenues for the fourth quarter of fiscal 2020 were
For fiscal 2020, the growth in merchandise and service revenues was
Road transportation fuel revenues
Total road transportation fuel revenues for the fourth quarter of fiscal 2020 were
For fiscal 2020, the road transportation fuel revenues decreased by
The following table shows the average selling price of road transportation fuel of our company-operated stores in our various markets for the last eight quarters, starting with the first quarter of the fiscal year ended
Quarter | 1st | 2nd | 3rd | 4th | Weighted average | |
52-week period ended | ||||||
United States (US dollars per gallon) – excluding CAPL | 2.66 | 2.55 | 2.51 | 2.21 | 2.50 | |
77.35 | 70.86 | 73.92 | 60.95 | 71.20 | ||
111.16 | 105.14 | 103.47 | 88.78 | 103.21 | ||
52-week period ended | ||||||
United States (US dollars per gallon) – excluding CAPL | 2.76 | 2.72 | 2.42 | 2.51 | 2.60 | |
75.07 | 80.56 | 75.28 | 74.59 | 76.32 | ||
117.95 | 115.22 | 97.59 | 103.45 | 107.82 |
Other revenues
Total other revenues for the fourth quarter of fiscal 2020 were
Total other revenues for fiscal 2020 were
Gross profit
Our gross profit was
For fiscal 2020, our gross profit increased by
Merchandise and service gross profit
In the fourth quarter of fiscal 2020, our merchandise and service gross profit was
During fiscal 2020, our merchandise and service gross profit was
Road transportation fuel gross profit
In the fourth quarter of fiscal 2020, our road transportation fuel gross profit was
During fiscal 2020, our road transportation fuel gross profit was
The road transportation fuel gross margin of our company-operated stores in
(US cents per gallon) | |||||
Weighted | |||||
Quarter | 1st | 2nd | 3rd | 4th | average |
52-week period ended | |||||
Before deduction of expenses related to electronic payment modes | 26.86 | 28.29 | 27.04 | 46.88 | 31.19 |
Expenses related to electronic payment modes(1) | 4.70 | 4.63 | 4.54 | 4.97 | 4.70 |
After deduction of expenses related to electronic payment modes | 22.16 | 23.66 | 22.50 | 41.91 | 26.49 |
52-week period ended | |||||
Before deduction of expenses related to electronic payment modes | 22.70 | 21.88 | 29.42 | 18.51 | 23.60 |
Expenses related to electronic payment modes(1) | 4.67 | 4.55 | 4.31 | 4.40 | 4.50 |
After deduction of expenses related to electronic payment modes | 18.03 | 17.33 | 25.11 | 14.11 | 19.10 |
(1) | Please note that this information has been restated to reflect the cost of electronic payment expenses per corporate-store road transportation fuel gallons instead of per total road transportation fuel gallons. |
Generally, during normal economic cycles, road transportation fuel margins in the United States can be volatile from one quarter to another but have historically trended higher over longer periods. The historical trends for
Other revenues gross profit
In the fourth quarter and fiscal 2020, other revenues gross profit was
Operating, selling, administrative and general expenses ("expenses")
For the fourth quarter and fiscal 2020, expenses decreased by 8.0% and 5.9%, respectively, compared with the corresponding periods of fiscal 2019. If we exclude the decrease in rent from the transition to IFRS 16 and certain items that are not considered indicative of future trends, expenses increased by 2.3% and 2.8%, respectively.
12-week period ended | 52-week period ended | |
Total variance, as reported | (8.0%) | (5.9%) |
Adjusted for: | ||
Decrease in rent expense from transition to IFRS 16 | 6.3% | 6.4% |
Decrease from the net impact of foreign exchange translation | 1.7% | 1.2% |
Decrease in CAPL's expenses | 1.6% | 0.6% |
Decrease from higher electronic payment fees, excluding acquisitions | 1.1% | — |
Increase from incremental expenses related to acquisitions | (0.2%) | (0.1%) |
Acquisition costs recognized to earnings of fiscal 2020 | (0.2%) | (0.1%) |
Decrease from settlements and reserves adjustments for specific elements recognized to earnings of | — | 0.4% |
Compensatory payment to CAPL for divestiture of assets recognized in fiscal 2019 | — | 0.2% |
Disposal of our marine fuel business | — | 0.1% |
Remaining variance | 2.3% | 2.8% |
(1) | During fiscal 2019, we settled various claims and adjusted our reserves in connection with specific events, which had a pre-tax negative impact of $24.2 million on our earnings. |
Growth in expenses, amongst other items, was driven by COVID-19 related expenses, normal inflation, higher labor costs from minimum wage increases in certain regions and incremental investments in our stores to support our strategic initiatives. COVID-19 related expenses include, but are not limited to, an emergency appreciation pay premium of
Earnings before interest, taxes, depreciation, amortization and impairment (EBITDA) and adjusted EBITDA
During the fourth quarter of fiscal 2020, EBITDA increased from
During fiscal 2020, EBITDA increased from
It should be noted that EBITDA and adjusted EBITDA are not performance measures defined by IFRS, but we, as well as investors and analysts, consider that those performance measures facilitate the evaluation of our ongoing operations and our ability to generate cash flows to fund our cash requirements, including our capital expenditures program and payment of dividends. Note that our definition of these measures may differ from the one used by other public corporations.
12-week periods ended | 52-week periods ended | |||
(in millions of US dollars) | ||||
Net earnings including non-controlling interests, as reported | 578.3 | 289.9 | 2,357.6 | 1,821.3 |
Add: | ||||
Income taxes | 145.4 | 45.3 | 545.9 | 370.9 |
Net financial expenses | 53.2 | 78.6 | 284.5 | 320.1 |
Depreciation, amortization and impairment | 307.4 | 241.5 | 1,336.8 | 1,070.7 |
EBITDA | 1,084.3 | 655.3 | 4,524.8 | 3,583.0 |
Adjusted for: | ||||
Net gain on disposal of a portion of the Corporation's | (41.0) | — | (41.0) | — |
Acquisition costs | 2.9 | 0.4 | 6.7 | 2.2 |
EBITDA attributable to non-controlling interests | (2.0) | (16.2) | (66.6) | (77.5) |
Restructuring costs attributable to shareholders of the Corporation | 0.9 | 2.6 | 4.5 | 10.5 |
Net gain on the disposal of the Corporation's interests in CAPL | — | — | (61.5) | — |
Compensatory payment to CAPL for divestiture of assets, net of non-controlling interests | — | — | — | 5.0 |
Gain on the disposal of the marine fuel business | — | — | — | (3.2) |
Adjusted EBITDA, as previously reported | 1,045.1 | 642.1 | 4,366.9 | 3,520.0 |
Estimated pro forma impact from transition to IFRS 16 attributable to | — | 89.0 | — | 381.0 |
Adjusted EBITDA | 1,045.1 | 731.1 | 4,366.9 | 3,901.0 |
Depreciation, amortization and impairment ("depreciation")
For the fourth quarter of fiscal 2020, our depreciation expense increased by
For fiscal 2020, our depreciation expense increased by
Net financial expenses
Net financial expenses for the fourth quarter of fiscal 2020 were
Net financial expenses for fiscal 2020 were
12-week periods ended | 52-week periods ended | |||
(in millions of US dollars) | ||||
Net financial expenses, as reported | 53.2 | 78.6 | 284.5 | 320.1 |
Adjusted for: | ||||
Net foreign exchange gain | 22.8 | 1.1 | 33.5 | 5.3 |
CAPL's financial expenses | — | (7.7) | (25.6) | (29.3) |
Estimated pro forma impact from transition to IFRS 16 | — | 14.0 | — | 62.0 |
Net financial expenses excluding items above | 76.0 | 86.0 | 292.4 | 358.1 |
Income taxes
The income tax rate for the fourth quarter of fiscal 2020 was 20.1% compared with 13.5% for the corresponding period of fiscal 2019. The income tax rate for the fourth quarter of fiscal 2020 includes a net tax benefit of
For fiscal 2020 the income tax rate was 18.8% compared with 16.9% for fiscal 2019. The income tax rate for fiscal 2020 includes a net tax benefit of
12-week periods ended | 52-week periods ended | |||
Income tax rate, as reported | 20.1% | 13.5% | 18.8% | 16.9% |
Adjusted for: | ||||
Release of deferred tax asset valuation allowance | 0.6% | — | 1.2% | — |
Income tax expense following the asset exchange | — | — | (0.1%) | — |
Tax benefit stemming from the decrease of the statutory | — | — | — | 0.3% |
Net income tax rate excluding items above | 20.7% | 13.5% | 19.9% | 17.2% |
Net earnings attributable to shareholders of the Corporation ("net earnings") and adjusted net earnings attributable to shareholders of the Corporation ("adjusted net earnings")
Net earnings for the fourth quarter of fiscal 2020 were
Excluding the items shown in the table below from net earnings of the fourth quarter of fiscal 2020 and fiscal 2019, adjusted net earnings for the fourth quarter of fiscal 2020 would have been approximately
For fiscal 2020, net earnings were
Excluding the items shown in the table below from net earnings of fiscal 2020 and 2019, adjusted net earnings for fiscal 2020 would have been approximately
The table below reconciles reported net earnings to adjusted net earnings:
12-week periods ended | 52-week periods ended | |||
(in millions of US dollars) | ||||
Net earnings attributable to shareholders of the Corporation, as | 576.3 | 293.1 | 2,353.6 | 1,833.9 |
Adjusted for: | ||||
Net gain on disposal of a portion of the Corporation's | (41.0) | — | (41.0) | — |
Net foreign exchange gain | (22.8) | (1.1) | (33.5) | (5.3) |
Release of deferred tax asset valuation allowance | (4.6) | — | (33.6) | — |
Acquisition costs | 2.9 | 0.4 | 6.7 | 2.2 |
Restructuring costs attributable to shareholders of the Corporation | 0.9 | 2.6 | 4.5 | 10.5 |
Net gain on the disposal of the Corporation's interests in CAPL | — | — | (61.5) | — |
Income tax expense following the asset exchange | — | — | 2.7 | — |
Impairment charge on CAPL's goodwill | — | — | — | 55.0 |
Tax benefit stemming from the decrease of the statutory income tax rate in | — | — | — | (6.2) |
Compensatory payment to CAPL for divestiture of assets, net of non-controlling interests | — | — | — | 5.0 |
Gain on the disposal of the marine fuel business | — | — | — | (3.2) |
Tax impact of the items above and rounding | 9.3 | — | 22.1 | (17.9) |
Adjusted net earnings attributable to shareholders of the Corporation, | 521.0 | 295.0 | 2,220.0 | 1,874.0 |
Estimated pro forma impact from transition to IFRS 16 | — | (6.0) | — | (28.0) |
Adjusted net earnings attributable to shareholders of the Corporation | 521.0 | 289.0 | 2,220.0 | 1,846.0 |
It should be noted that adjusted net earnings is not a performance measure defined by IFRS, but we, as well as investors and analysts, consider this measure useful for evaluating the underlying performance of our operations on a comparable basis. Note that our definition of this measure may differ from the one used by other public corporations.
Dividends
During its
For fiscal 2020, the Board of Directors declared total dividends of CA 26.5¢ per share, an increase of 17.8% compared with fiscal 2019.
Profile
As of
In
In addition, under licensing agreements, close to 2,350 stores are operated under the Circle K banner in 15 other countries and territories (
For more information on
The statements set forth in this press release, which describes
Webcast on
Financial analysts, investors, media and any individuals interested in listening to the webcast on
Rebroadcast: For individuals who will not be able to listen to the live webcast, a recording of the webcast will be available on the Corporation's website for a period of 90 days.
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