- Net earnings were
$810.4 million , or$0.79 per diluted share for the second quarter of fiscal 2023 compared with$694.8 million , or$0.65 per diluted share for the second quarter of fiscal 2022. Adjusted net earnings1 were approximately$838.0 million compared with$693.0 million for the second quarter of fiscal 2022. Adjusted diluted net earnings per share1 were$0.82 , representing an increase of 26.2% from$0.65 for the corresponding quarter of last year. - Total merchandise and service revenues of
$4.1 billion , an increase of 2.3%. Same-store merchandise revenues2 increased by 5.6% inthe United States , by 2.9% inEurope and other regions1, and decreased by 1.5% inCanada . - Merchandise and service gross margin1 increased by 0.2% in
the United States to 34.0%, by 0.9% inCanada to 33.2% and decreased by 0.1% inEurope and other regions to 38.3%. - Same-store road transportation fuel volumes decreased by 1.9% in
the United States , by 6.3% inEurope and other regions, and by 6.5% inCanada . - Road transportation fuel gross margin1 of 49.16¢ per gallon in
the United States , an increase of 12.77¢ per gallon, US 9.76¢ per liter inEurope and other regions, a decrease of US 0.81¢ per liter driven by the impact of currency translation, and CA 12.55¢ per liter inCanada , an increase of CA 1.52¢ per liter. Fuel margins remained healthy throughout the network due to favorable market conditions and the continued work on the optimization of the supply chain. - The Corporation completed the acquisition of 218 sites within the Wilsons network, consisting of 79 company-owned and operated convenience retail and fuel locations, 2 company-owned and dealer-operated locations, 137 dealer-owned and operated locations, and a fuel terminal in
Atlantic Canada . According to the Corporation's agreement with the competition bureau, a portion of this network will be divested. - During the second quarter and first half-year of fiscal 2023, the Corporation repurchased shares for amounts of
$205.2 million and$683.2 million , respectively. Subsequent to the end of the quarter, shares were repurchased for an amount of$396.2 million . - Sustained healthy financial situation as demonstrated by a leverage ratio1 of 1.20 : 1, and a return on capital employed1 of 16.4%, both driven by strong earnings.
- 27.3% increase of the quarterly dividend, from CA 11.0¢ per share, bringing it to CA 14.0¢ per share.
________________________ |
1 Please refer to the "Non-IFRS Measures" section for additional information on performance measures not defined by IFRS. |
2 This measure represents the growth of (decrease in) cumulated merchandise revenues between the current period and comparative period for those stores that were open for at least 23 days out of every 28-day period included in the reported periods. Merchandise revenues are defined as Merchandise and service revenues excluding service revenues. |
"We are pleased to report strong results this quarter, especially in the face of the continued challenges of high inflation, energy and fuel prices across the global economy. We had good performance in convenience with favorable same store sales, particularly in our U.S. market, which had strong growth in food, and positive promotional activity. We also continued to generate robust fuel margins across all of our platforms. As always, we remain committed to delivering consistent value both inside our stores and on our forecourts to help make our customers' lives a little easier every day," said
"We are proud of the recent significant milestones that we have achieved especially in innovation and mobility. Over 1,000 units have been deployed so far in the roll out of our easy-to-use, smart checkout technology. We passed one million pay-by-plate fuel transactions on
Significant Items of the Second Quarter of Fiscal 2023
- On
September 1, 2022 , we adopted a special resolution to convert Class A multiple-voting shares into Common shares carrying one vote per share. Following the conversion, the Common shares ofCouche-Tard are listed on theToronto Stock Exchange in substitution of all Class A multiple-voting shares under the symbol "ATD". - During the second quarter and first half-year of fiscal 2023, we repurchased 4,796,500 and 15,736,900 shares, for amounts of
$205.2 million and$683.2 million , respectively. Subsequent to the end of the quarter, 8,875,400 shares were repurchased for an amount of$396.2 million . - On
October 9, 2022 , as a result of a decrease in the market capitalization of Fire & Flower Holdings Corp. ("Fire & Flower"), an impairment loss of$23.9 million was recorded to Depreciation, amortization and impairment to bring our investment of 35.2% in the associated company to its fair value. - Subsequent to the end of the quarter, we issued a
$8.0 million secured loan to Fire & Flower bearing interest at an annual rate of 11.0% and maturing onDecember 31, 2023 .
Changes in our Network during the Second Quarter of Fiscal 2023
- On
August 30, 2022 , we closed the acquisition of all the issued and outstanding shares ofCape D'Or Holdings Limited ,Barrington Terminals Limited , and other related holding entities which operate an independent convenience store and fuel network inAtlantic Canada under the Esso, Go! Store and Wilsons Gas Stops brands (collectively "Wilsons"). The Wilsons network comprises 79 company-owned and operated convenience retail and fuel locations, 2 company-owned and dealer-operated locations, 137 dealer-owned and operated locations, and a fuel terminal inHalifax, Canada . The transaction was settled for a consideration, subject to post-closing adjustments, of CA$277.9 million ($213.0 million ), using available cash. - In connection with obtaining the
Competition Bureau (Canada ) approval for the transaction, we entered into a consent agreement with the Commissioner of Competition to divest 34 company-owned and operated convenience retail and fuel locations, 1 company-owned and dealer-operated location, and 12 dealer-owned and operated locations inNew Brunswick ,Newfoundland andLabrador ,Nova Scotia andPrince Edward Island, Canada . - We acquired one company-operated store, reaching a total of two company-operated stores since the beginning of fiscal 2023.
- We completed the construction of 19 stores and the relocation or reconstruction of 4 stores, reaching a total of 53 stores since the beginning of fiscal 2023. As of
October 9, 2022 , another 73 stores were under construction and should open in the upcoming quarters.
__________________________ |
1 Please refer to the "Non-IFRS Measures" section for additional information on performance measures not defined by IFRS. |
Summary of changes in our store network
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 other affiliated | Total | ||||
Number of sites, beginning of period | 9,796 | 369 | 698 | 1,294 | 12,157 | ||||
Acquisitions | 80 | 2 | 137 | — | 219 | ||||
Openings / constructions / additions | 19 | — | 5 | 13 | 37 | ||||
Closures / disposals / withdrawals | (20) | (1) | (6) | (19) | (46) | ||||
Store conversions | 4 | (4) | — | — | — | ||||
Number of sites, end of period | 9,879 | 366 | 834 | 1,288 | 12,367 | ||||
1,935 | |||||||||
Total network | 14,302 | ||||||||
Number of automated fuel stations included in the period-end figures | 978 | — | 1 | — | 979 |
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 | 24‑week periods ended | |||
Average for the period(1) | ||||
Canadian dollar | 0.7626 | 0.7923 | 0.7702 | 0.8045 |
Norwegian krone | 0.0999 | 0.1142 | 0.1015 | 0.1165 |
Swedish krone | 0.0945 | 0.1154 | 0.0970 | 0.1171 |
Danish krone | 0.1348 | 0.1581 | 0.1380 | 0.1600 |
Zloty | 0.2114 | 0.2572 | 0.2181 | 0.2617 |
Euro | 1.0031 | 1.1758 | 1.0267 | 1.1901 |
Ruble | Not Applicable | 0.0137 | Not Applicable | 0.0136 |
0.1274 | 0.1285 | 0.1274 | 0.1287 |
(1) Calculated by taking the average of the closing exchange rates of each day in the applicable period. |
For the analysis of consolidated results, the impact of the translation of our foreign currency operations into US dollars is defined as the impact from the translation of our Canadian, European, and Asian operations into US dollars. Variances of our foreign currency operations into US dollars are determined as being the difference between the corresponding period results in local currencies translated at the current period average exchange rate and the corresponding period results in local currencies translated at the corresponding period average exchange rate.
Summary Analysis of Consolidated Results for the Second Quarter and First Half-year of Fiscal 2023
The following table highlights certain information regarding our operations for the 12 and 24‑week periods ended
12‑week periods ended | 24‑week periods ended | |||||
(in millions of US dollars, unless otherwise stated) | 2022 | 2021 | Variation % | 2022 | 2021 | Variation % |
Statement of Operations Data: | ||||||
Merchandise and service revenues(1): | ||||||
2,903.0 | 2,754.0 | 5.4 | 5,807.9 | 5,583.4 | 4.0 | |
550.9 | 580.4 | (5.1) | 1,088.0 | 1,141.8 | (4.7) | |
617.9 | 644.5 | (4.1) | 1,248.4 | 1,321.7 | (5.5) | |
Total merchandise and service revenues | 4,071.8 | 3,978.9 | 2.3 | 8,144.3 | 8,046.9 | 1.2 |
Road transportation fuel revenues: | ||||||
8,236.0 | 6,654.8 | 23.8 | 17,917.4 | 13,118.5 | 36.6 | |
2,837.5 | 2,154.9 | 31.7 | 5,813.4 | 3,948.5 | 47.2 | |
1,453.1 | 1,267.7 | 14.6 | 3,114.9 | 2,405.6 | 29.5 | |
Total road transportation fuel revenues | 12,526.6 | 10,077.4 | 24.3 | 26,845.7 | 19,472.6 | 37.9 |
Other revenues(2): | ||||||
8.5 | 11.4 | (25.4) | 18.2 | 22.2 | (18.0) | |
265.6 | 147.6 | 79.9 | 516.1 | 247.6 | 108.4 | |
7.0 | 4.4 | 59.1 | 12.9 | 9.3 | 38.7 | |
Total other revenues | 281.1 | 163.4 | 72.0 | 547.2 | 279.1 | 96.1 |
Total revenues | 16,879.5 | 14,219.7 | 18.7 | 35,537.2 | 27,798.6 | 27.8 |
Merchandise and service gross profit(1)(3): | ||||||
987.5 | 932.1 | 5.9 | 1,972.8 | 1,899.8 | 3.8 | |
211.1 | 222.8 | (5.3) | 419.8 | 438.2 | (4.2) | |
205.0 | 208.3 | (1.6) | 413.9 | 427.3 | (3.1) | |
Total merchandise and service gross profit | 1,403.6 | 1,363.2 | 3.0 | 2,806.5 | 2,765.3 | 1.5 |
Road transportation fuel gross profit(3): | ||||||
1,058.0 | 791.7 | 33.6 | 2,089.4 | 1,596.5 | 30.9 | |
241.8 | 278.0 | (13.0) | 522.5 | 524.7 | (0.4) | |
124.9 | 115.7 | 8.0 | 257.3 | 223.7 | 15.0 | |
Total road transportation fuel gross profit | 1,424.7 | 1,185.4 | 20.2 | 2,869.2 | 2,344.9 | 22.4 |
Other revenues gross profit(2)(3): | ||||||
8.5 | 11.4 | (25.4) | 18.2 | 22.2 | (18.0) | |
18.4 | 23.8 | (22.7) | 38.2 | 46.5 | (17.8) | |
5.0 | 4.4 | 13.6 | 10.9 | 9.3 | 17.2 | |
Total other revenues gross profit | 31.9 | 39.6 | (19.4) | 67.3 | 78.0 | (13.7) |
Total gross profit(3) | 2,860.2 | 2,588.2 | 10.5 | 5,743.0 | 5,188.2 | 10.7 |
Operating, selling, general and administrative expenses | 1,433.0 | 1,321.3 | 8.5 | 2,831.1 | 2,599.4 | 8.9 |
(Gain) loss on disposal of property and equipment and other assets | (20.4) | 3.2 | (737.5) | (33.4) | (34.1) | (2.1) |
Depreciation, amortization and impairment | 353.9 | 325.7 | 8.7 | 673.1 | 640.0 | 5.2 |
Operating income | 1,093.7 | 938.0 | 16.6 | 2,272.2 | 1,982.9 | 14.6 |
Net financial expenses | 58.1 | 67.3 | (13.7) | 125.2 | 141.6 | (11.6) |
Net earnings | 810.4 | 694.8 | 16.6 | 1,682.8 | 1,459.2 | 15.3 |
Per Share Data: | ||||||
Basic net earnings per share (dollars per share) | 0.79 | 0.65 | 21.5 | 1.64 | 1.36 | 20.6 |
Diluted net earnings per share (dollars per share) | 0.79 | 0.65 | 21.5 | 1.64 | 1.36 | 20.6 |
Adjusted diluted net earnings per share (dollars per share)(3) | 0.82 | 0.65 | 26.2 | 1.67 | 1.35 | 23.7 |
12‑week periods ended | 24‑week periods ended | |||||
(in millions of US dollars, unless otherwise stated) | 2022 | 2021 | Variation % | 2022 | 2021 | Variation % |
Other Operating Data: | ||||||
Merchandise and service gross margin(1)(3): | ||||||
Consolidated | 34.5 % | 34.3 % | 0.2 | 34.5 % | 34.4 % | 0.1 |
34.0 % | 33.8 % | 0.2 | 34.0 % | 34.0 % | — | |
38.3 % | 38.4 % | (0.1) | 38.6 % | 38.4 % | 0.2 | |
33.2 % | 32.3 % | 0.9 | 33.2 % | 32.3 % | 0.9 | |
Growth of (decrease in) same-store merchandise revenues(4): | ||||||
5.6 % | 1.4 % | 4.5 % | 0.6 % | |||
2.9 % | 3.9 % | 2.9 % | 4.9 % | |||
(1.5 %) | (2.1 %) | (1.4 %) | (6.1 %) | |||
Road transportation fuel gross margin(3): | ||||||
49.16 | 36.39 | 35.1 | 49.08 | 36.57 | 34.2 | |
9.76 | 10.57 | (7.7) | 10.96 | 10.45 | 4.9 | |
12.55 | 11.03 | 13.8 | 13.27 | 11.02 | 20.4 | |
Total volume of road transportation fuel sold: | ||||||
2,152.2 | 2,175.7 | (1.1) | 4,257.2 | 4,365.3 | (2.5) | |
2,476.2 | 2,629.9 | (5.8) | 4,765.0 | 5,021.6 | (5.1) | |
1,305.3 | 1,324.5 | (1.4) | 2,517.5 | 2,536.4 | (0.7) | |
Growth of (decrease in) same-store road transportation fuel volume(5): | ||||||
(1.9 %) | 3.3 % | (3.0 %) | 7.4 % | |||
(6.3 %) | (0.3 %) | (5.0 %) | 2.8 % | |||
(6.5 %) | 2.8 % | (3.2 %) | 6.3 % |
(in millions of US dollars, unless otherwise stated) | As at | As at | Variation $ |
Balance Sheet Data: | |||
Total assets | 29,108.6 | 29,591.6 | (483.0) |
Interest-bearing debt(3) | 9,136.7 | 9,439.9 | (303.2) |
Equity | 12,793.9 | 12,437.6 | 356.3 |
Indebtedness Ratios(3): | |||
Net interest-bearing debt/total capitalization | 0.34 : 1 | 0.37 : 1 | |
Leverage ratio | 1.20 : 1 | 1.39 : 1 | |
Returns(3): | |||
Return on equity | 22.7 % | 21.8 % | |
Return on capital employed | 16.4 % | 15.4 % |
(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. Franchise fees from international licensed stores are presented in |
(2) | Includes revenues from the rental of assets and from the sale of aviation fuel and energy for stationary engines. |
(3) | Please refer to the "Non-IFRS measures" section for additional information on our capital management measure as well as performance measures not defined by IFRS. |
(4) | This measure represents the growth of (decrease in) cumulated merchandise revenues between the current period and comparative period for those stores that were open for at least 23 days out of every 28-day period included in the reported periods. Merchandise revenues are defined as Merchandise and service revenues excluding service revenues. |
(5) | For company-operated stores only. |
(6) | Calculated based on respective functional currencies. |
Revenues
Our revenues were
For the first half-year of fiscal 2023, our revenues increased by
Merchandise and service revenues
Total merchandise and service revenues for the second quarter of fiscal 2023 were
For the first half-year of fiscal 2023, the growth in merchandise and service revenues was
Road transportation fuel revenues
Total road transportation fuel revenues for the second quarter of fiscal 2023 were
For the first half-year of fiscal 2023, the road transportation fuel revenues increased 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. The average selling price of road transportation fuel consists of the road transportation fuel revenues divided by the volume of road transportation fuel sold:
Quarter | 3ʳᵈ | 4ᵗʰ | 1ˢᵗ | 2ⁿᵈ | Weighted | |
52‑week period ended | ||||||
United States (US dollars per gallon) | 3.28 | 3.94 | 4.61 | 3.84 | 3.87 | |
96.66 | 120.84 | 129.11 | 117.39 | 115.58 | ||
129.39 | 150.30 | 179.15 | 149.55 | 150.46 | ||
52‑week period ended | ||||||
United States (US dollars per gallon) | 2.16 | 2.72 | 2.97 | 3.08 | 2.70 | |
65.84 | 79.29 | 79.09 | 86.29 | 77.13 | ||
92.54 | 108.99 | 117.51 | 123.00 | 109.87 |
______________________ |
1 Please refer to the "Non-IFRS Measures" section for additional information on performance measures not defined by IFRS. |
Other revenues
Total other revenues for the second quarter of fiscal 2023 were
For the first half-year of fiscal 2023, total other revenues were
Gross profit1
Our gross profit was $2.9 billion for the second quarter of fiscal 2023, up by
For the first half-year of fiscal 2023, our gross profit increased by
Merchandise and service gross profit
In the second quarter of fiscal 2023, our merchandise and service gross profit was $1.4 billion, an increase of
During the first half-year of fiscal 2023, our merchandise and service gross profit was $2.8 billion, an increase of
Road transportation fuel gross profit
In the second quarter of fiscal 2023, our road transportation fuel gross profit was
During the first half-year of fiscal 2023, our road transportation fuel gross profit was
_________________________ |
1 Please refer to the "Non-IFRS Measures" section for additional information on performance measures not defined by IFRS. |
The road transportation fuel gross margin1 of our company-operated stores in
(US cents per gallon) | |||||
Quarter | 3ʳᵈ | 4ᵗʰ | 1ˢᵗ | 2ⁿᵈ | Weighted |
52‑week period ended | |||||
Before deduction of expenses related to electronic payment modes | 41.02 | 47.55 | 50.95 | 51.11 | 47.22 |
Expenses related to electronic payment modes(1) | 5.74 | 6.61 | 7.21 | 6.53 | 6.47 |
After deduction of expenses related to electronic payment modes | 35.28 | 40.94 | 43.74 | 44.58 | 40.75 |
52‑week period ended | |||||
Before deduction of expenses related to electronic payment modes | 31.86 | 35.25 | 37.58 | 37.68 | 35.40 |
Expenses related to electronic payment modes(1) | 4.66 | 5.10 | 5.38 | 5.31 | 5.09 |
After deduction of expenses related to electronic payment modes | 27.20 | 30.15 | 32.20 | 32.37 | 30.31 |
(1) | Expenses related to electronic payment modes are determined by allocating the portion of total electronic payment modes, which are included in Operating, selling, administrative and general expenses, deemed related to our |
Generally, during normal economic cycles, road transportation fuel margins in the United States can be volatile from one quarter to another, while in
Other revenues gross profit
In the second quarter of fiscal 2023, other revenues gross profit was
During the first half-year of fiscal 2023, other revenues gross profit was $67.3 million, a decrease of
Operating, selling, general and administrative expenses ("expenses")
For the second quarter and first half-year of fiscal 2023, expenses increased by 8.5% and 8.9%, respectively, compared with the corresponding periods of fiscal 2022. Normalized growth of expenses1 was 8.1% and 7.7%, respectively, as shown in the table below:
12‑week periods ended | 24‑week periods ended | |||
Growth of expenses, as reported | 8.5 % | 12.8 % | 8.9 % | 12.1 % |
Adjusted for: | ||||
Decrease (increase) from the net impact of foreign exchange translation | 3.2 % | (0.9 %) | 2.8 % | (2.2 %) |
Increase from higher electronic payment fees, excluding acquisitions | (2.3 %) | (1.9 %) | (3.0 %) | (2.2 %) |
Increase from incremental expenses related to acquisitions | (1.0 %) | (2.2 %) | (0.9 %) | (2.2 %) |
(Increase) decrease from changes in acquisition costs recognized to earnings | (0.3 %) | (0.1 %) | (0.1 %) | 0.1 % |
Normalized growth of expenses1 | 8.1 % | 7.7 % | 7.7 % | 5.6 % |
We have continued to deploy strategic efforts in order to mitigate the impact of a higher inflation level and continued pressure on wages, which is demonstrated by our normalized growth of expenses1 of 8.1%, below inflation despite the challenging market conditions, mainly driven by inflationary pressures, most notably on higher energy costs in our European operations, higher costs from rising minimum wages, as well as by incremental investments in our stores to support our strategic initiatives, partly offset by the impact of lower pressure in the employment market.
_____________________________ |
1 Please refer to the "Non-IFRS Measures" section for additional information on performance measures not defined by IFRS. |
Earnings before interest, taxes, depreciation, amortization and impairment ("EBITDA1") and adjusted EBITDA1
During the second quarter of fiscal 2023, EBITDA stood at
During the first half-year of fiscal 2023, EBITDA stood at
Depreciation, amortization and impairment ("depreciation")
For the second quarter of fiscal 2023, our depreciation expense increased by
For the first half-year of fiscal 2023, our depreciation expense increased by
Net financial expenses
Net financial expenses for the second quarter and first half-year of fiscal 2023 were
12‑week periods ended | 24‑week periods ended | |||||
(in millions of US dollars) | Variation | Variation | ||||
Net financial expenses, as reported | 58.1 | 67.3 | (9.2) | 125.2 | 141.6 | (16.4) |
Explained by: | ||||||
Net foreign exchange gain | 1.5 | 4.9 | (3.4) | 0.5 | 13.5 | (13.0) |
Change in fair value of financial instruments and amortization of deferred differences | 0.1 | (1.7) | 1.8 | 1.0 | (11.8) | 12.8 |
Remaining variation | 59.7 | 70.5 | (10.8) | 126.7 | 143.3 | (16.6) |
The remaining variations are mainly driven by higher interest revenue as well as by the reduction of long-term debt compared with the corresponding periods of fiscal 2022.
Income taxes
The income tax rate for the second quarter and first half-year of fiscal 2023 was 21.9% compared with 21.3% for the corresponding periods of fiscal 2022. The increase is mainly stemming from the impact of a different mix in our earnings across the various jurisdictions in which we operate.
_________________________ |
1 Please refer to the "Non-IFRS Measures" section for additional information on performance measures not defined by IFRS. |
Net earnings and adjusted net earnings1
Net earnings for the second quarter of fiscal 2023 were
Adjusted net earnings for the second quarter of fiscal 2023 were approximately
For the first half-year of fiscal 2023, net earnings stood at
Adjusted net earnings for the first half-year of fiscal 2023 stood at
Dividends
During its
During the same meeting, the Board of Directors declared a quarterly dividend of CA 14.0¢ per share for the second quarter of fiscal 2023 to shareholders on record as at
Non-IFRS Measures
To provide more information for evaluating the Corporation's performance, the financial information included in our financial documents contains certain data that are not performance measures under IFRS ("non-IFRS measures"), which are also calculated on an adjusted basis to exclude specific items. We believe that providing those non-IFRS measures is useful to management, investors, and analysts, as they provide additional information to measure the performance and financial position of the Corporation.
The following non-IFRS financial measures are used in our financial disclosures:
- Gross profit;
- Earnings before interest, taxes, depreciation, amortization and impairment ("EBITDA") and adjusted EBITDA;
- Adjusted net earnings; and
- Interest-bearing debt;
The following non-IFRS ratios are used in our financial disclosures:
- Merchandise and service gross margin and Road transportation fuel gross margin;
- Normalized growth of operating, selling, general and administrative expenses;
- Growth of same-store merchandise revenues for
Europe and other regions; - Adjusted diluted net earnings per share;
- Leverage ratio; and
- Return on equity and return on capital employed.
The following capital management measure is used in our financial disclosures:
- Net interest-bearing debt/total capitalization.
Supplementary financial measures are also used in our financial disclosures and those measures are described where they are presented.
____________________________ |
1 Please refer to the "Non-IFRS Measures" section for additional information on performance measures not defined by IFRS. |
Non-IFRS financial measures and ratios, as well as the capital management measure are mainly derived from the consolidated financial statements, but do not have standardized meanings prescribed by IFRS. These non-IFRS measures should not be considered in isolation or as a substitute for financial measures prepared in accordance with IFRS. In addition, our definitions of non-IFRS measures may differ from those of other public corporations. Any such modification or reformulation may be significant. These measures are also adjusted for the pro forma impact of our acquisitions and impacts of new accounting standards, if they are considered to be material.
Gross profit. Gross profit consists of revenues less the cost of sales, excluding depreciation, amortization and impairment. This measure is considered useful for evaluating the underlying performance of our operations.
The table below reconciles revenues and cost of sales, excluding depreciation, amortization and impairment, as per IFRS, to gross profit:
12‑week periods ended | 24‑week periods ended | |||
(in millions of US dollars) | ||||
Revenues | 16,879.5 | 14,219.7 | 35,537.2 | 27,798.6 |
Cost of sales, excluding depreciation, amortization and impairment | 14,019.3 | 11,631.5 | 29,794.2 | 22,610.4 |
Gross profit | 2,860.2 | 2,588.2 | 5,743.0 | 5,188.2 |
Please note that the same reconciliation applies in the determination of gross profit by category and by geography presented in the section "Summary Analysis of Consolidated Results".
Merchandise and service gross margin. Merchandise and service gross margin consists of Merchandise and service gross profit divided by Merchandise and service revenues, both measures are presented in the section ''Summary Analysis of Consolidated Results''. Merchandise and service gross margin is considered useful for evaluating how efficiently we generate gross profit by dollar of revenue.
Road transportation fuel gross margin. Road transportation fuel gross margin consists of Road transportation fuel gross profit divided by total volume of road transportation fuel sold. For
12‑week periods ended | 24‑week periods ended | |||
(in millions of Canadian dollars, unless otherwise noted) | ||||
Road transportation fuel revenues | 1,906.0 | 1,600.0 | 4,042.5 | 2,994.2 |
Road transportation fuel cost of sales, excluding depreciation, amortization and impairment | 1,742.2 | 1,453.9 | 3,708.5 | 2,714.8 |
Road transportation fuel gross profit | 163.8 | 146.1 | 334.0 | 279.4 |
Total road transportation fuel volume sold | 1,305.3 | 1,324.5 | 2,517.5 | 2,536.4 |
Road transportation fuel gross margin (CA cents per liter) | 12.55 | 11.03 | 13.27 | 11.02 |
Normalized growth of operating, selling, general and administrative expenses ("normalized growth of expenses"). Normalized growth of expenses consists of the growth of Operating, selling, general and administrative expenses adjusted for the impact of the changes in our network, the impact from changes in accounting policies and adoption of accounting standards, the impact of more volatile items over which we have limited control including, but not limited to, the net impact of foreign exchange translation, electronic payment fees excluding acquisitions, and acquisition costs, as well as other specific items for which the impact on consolidated results is not deemed indicative of future trends. Please note that the description of this measure was modified to clarify its composition. This measure is considered useful for evaluating our ability to control our expenses on a comparable basis.
The tables below reconcile growth of Operating, selling, general and administrative expenses to normalized growth of expenses:
12‑week periods ended | ||||||
(in millions of US dollars, unless otherwise noted) | Variation | Variation | ||||
Operating, selling, general and administrative expenses, as published | 1,433.0 | 1,321.3 | 8.5 % | 1,321.3 | 1,171.1 | 12.8 % |
Adjusted for: | ||||||
Decrease (increase) from the net impact of foreign exchange translation | 42.2 | — | 3.2 % | (10.7) | — | (0.9 %) |
Increase from higher electronic payment fees, excluding acquisitions | (30.9) | — | (2.3 %) | (22.0) | — | (1.9 %) |
Increase from incremental expenses related to acquisitions | (13.2) | — | (1.0 %) | (26.1) | — | (2.2 %) |
Increase from changes in acquisition costs recognized to earnings | (3.4) | — | (0.3 %) | (0.7) | — | (0.1 %) |
Normalized growth of expenses | 1,427.7 | 1,321.3 | 8.1 % | 1,261.8 | 1,171.1 | 7.7 % |
24‑week periods ended | ||||||
(in millions of US dollars, unless otherwise noted) | Variation | Variation | ||||
Operating, selling, general and administrative expenses, as published | 2,831.1 | 2,599.4 | 8.9 % | 2,599.4 | 2,319.7 | 12.1 % |
Adjusted for: | ||||||
Increase from higher electronic payment fees, excluding acquisitions | (77.5) | — | (3.0 %) | (50.2) | — | (2.2 %) |
Decrease (increase) from the net impact of foreign exchange translation | 73.9 | — | 2.8 % | (50.3) | — | (2.2 %) |
Increase from incremental expenses related to acquisitions | (24.3) | — | (0.9 %) | (51.2) | — | (2.2 %) |
(Increase) decrease from changes in acquisition costs recognized to earnings | (3.8) | — | (0.1 %) | 2.4 | — | 0.1 % |
Normalized growth of expenses | 2,799.4 | 2,599.4 | 7.7 % | 2,450.1 | 2,319.7 | 5.6 % |
Growth of same-store merchandise revenues for
The tables below reconcile Merchandise and service revenues, as per IFRS, to same-store merchandise revenues for
12‑week periods ended | ||||
(in millions of US dollars, unless otherwise noted) | ||||
Merchandise and service revenues for | 550.9 | 580.4 | 580.4 | 394.6 |
Adjusted for: | ||||
Service revenues | (38.9) | (41.0) | (41.0) | (36.1) |
Net foreign exchange impact | — | (58.6) | — | 1.5 |
Merchandise revenues for stores not meeting the definition of same-store | (21.8) | (17.4) | (17.9) | (10.1) |
Same-store merchandise revenues from stores not included in our consolidated results, including the impact of store conversions | 79.7 | 90.3 | 103.4 | 251.6 |
Total Same-store merchandise revenues for | 569.9 | 553.7 | 624.9 | 601.5 |
Growth of same-store merchandise revenues for | 2.9 % | 3.9 % |
24‑week periods ended | ||||
(in millions of US dollars, unless otherwise noted) | ||||
Merchandise and service revenues for | 1,088.0 | 1,141.8 | 1,141.8 | 737.8 |
Adjusted for: | ||||
Service revenues | (78.7) | (85.8) | (85.8) | (69.8) |
Net foreign exchange impact | — | (105.3) | — | 37.2 |
Merchandise revenues for stores not meeting the definition of same-store | (40.9) | (35.2) | (26.6) | (23.7) |
Same-store merchandise revenues from stores not included in our consolidated results, including the impact of store conversions | 164.6 | 186.0 | 217.0 | 506.8 |
Total Same-store merchandise revenues for | 1,133.0 | 1,101.5 | 1,246.4 | 1,188.3 |
Growth of same-store merchandise revenues for | 2.9 % | 4.9 % |
Earnings before interest, taxes, depreciation, amortization and impairment ("EBITDA") and adjusted EBITDA. EBITDA represents net earnings plus income taxes, net financial expenses, and depreciation, amortization and impairment. Adjusted EBITDA represents the EBITDA adjusted for acquisition costs, the impact from changes in accounting policies and adoption of accounting standards as well as other specific items for which the impact on consolidated results is not deemed indicative of future trends. Please note that the description of adjusted EBITDA was modified to clarify its composition. These performance measures are considered useful to facilitate the evaluation of our ongoing operations and our ability to generate cash flows to fund our cash requirements, including our capital expenditures program, share repurchases, and payment of dividends.
The table below reconciles net earnings, as per IFRS, to EBITDA and adjusted EBITDA:
12‑week periods ended | 24‑week periods ended | |||
(in millions of US dollars) | ||||
Net earnings | 810.4 | 694.8 | 1,682.8 | 1,459.2 |
Add: | ||||
Income taxes | 227.3 | 187.5 | 471.9 | 393.8 |
Net financial expenses | 58.1 | 67.3 | 125.2 | 141.6 |
Depreciation, amortization and impairment | 353.9 | 325.7 | 673.1 | 640.0 |
EBITDA | 1,449.7 | 1,275.3 | 2,953.0 | 2,634.6 |
Adjusted for: | ||||
Acquisition costs | 5.3 | 1.8 | 6.5 | 2.6 |
Adjusted EBITDA | 1,455.0 | 1,277.1 | 2,959.5 | 2,637.2 |
Adjusted net earnings and adjusted diluted net earnings per share. Adjusted net earnings represents net earnings adjusted for net foreign exchange gains or losses, acquisition costs, the impact from changes in accounting policies and adoption of accounting standards, impairment on goodwill, investments in subsidiaries, joint ventures and associated companies as well as other specific items for which the impact on consolidated results is not deemed indicative of future trends. Please note that the description of this measure was modified to clarify its composition. These measures are considered useful for evaluating the underlying performance of our operations on a comparable basis.
The table below reconciles net earnings, as per IFRS, with adjusted net earnings and adjusted diluted net earnings per share:
12‑week periods ended | 24‑week periods ended | |||
(in millions of US dollars, except per share amounts, or unless otherwise noted) | ||||
Net earnings | 810.4 | 694.8 | 1,682.8 | 1,459.2 |
Adjusted for: | ||||
Impairment of our investment in Fire & Flower | 23.9 | — | 23.9 | — |
Acquisition costs | 5.3 | 1.8 | 6.5 | 2.6 |
Net foreign exchange gain | (1.5) | (4.9) | (0.5) | (13.5) |
Tax impact of the items above and rounding | (0.1) | 1.3 | 0.3 | 2.7 |
Adjusted net earnings | 838.0 | 693.0 | 1,713.0 | 1,451.0 |
Weighted average number of shares - diluted (in millions) | 1,022.8 | 1,072.5 | 1,025.0 | 1,073.4 |
Adjusted diluted net earnings per share | 0.82 | 0.65 | 1.67 | 1.35 |
Interest-bearing debt. This measure represents the sum of the following balance sheet accounts: Current portion of long-term debt, Long-term debt, Current portion of lease liabilities and Lease liabilities. This measure is considered useful to facilitate the understanding of our financial position in relation with financing obligations. The calculation of this measure of financial position is detailed in the ''Net interest-bearing debt/total capitalization'' section below.
Net interest-bearing debt/total capitalization. This measure represents the basis for monitoring our capital as well as a measure of financial condition that is especially used in the financial community.
The table below presents the calculation of this performance measure:
(in millions of US dollars, except ratio data) | As at | As at |
Current portion of long-term debt | 1.3 | 1.4 |
Current portion of lease liabilities | 414.8 | 425.4 |
Long-term debt | 5,793.1 | 5,963.6 |
Lease liabilities | 2,927.5 | 3,049.5 |
Interest-bearing debt | 9,136.7 | 9,439.9 |
Less: Cash and cash equivalents | 2,456.3 | 2,143.9 |
Net interest-bearing debt | 6,680.4 | 7,296.0 |
Equity | 12,793.9 | 12,437.6 |
Net interest-bearing debt | 6,680.4 | 7,296.0 |
Total capitalization | 19,474.3 | 19,733.6 |
Net interest-bearing debt to total capitalization ratio | 0.34 : 1 | 0.37 : 1 |
Leverage ratio. This measure represents a measure of financial condition that is especially used in the financial community.
The table below reconciles net interest-bearing debt and adjusted EBITDA, for which the calculation methodologies are described in other tables of this section, with the leverage ratio:
52-week periods ended | ||
(in millions of US dollars, except ratio data) | ||
Net interest-bearing debt | 6,680.4 | 7,296.0 |
Adjusted EBITDA | 5,588.3 | 5,266.1 |
Leverage ratio | 1.20 : 1 | 1.39 : 1 |
Return on equity. This measure is used to assess the relation between our profitability and our net assets. Average equity is calculated by taking the average of the opening and closing balance for the 52-week period.
The table below reconciles net earnings, as per IFRS, with the ratio of return on equity:
52-week periods ended | ||
(in millions of US dollars, unless otherwise noted) | ||
Net earnings | 2,906.9 | 2,683.3 |
Equity - Opening balance | 12,866.1 | 12,180.9 |
Equity - Ending balance | 12,793.9 | 12,437.6 |
Average equity | 12,830.0 | 12,309.3 |
Return on equity | 22.7 % | 21.8 % |
Return on capital employed. This measure is used to measure the relation between our profitability and capital efficiency. Earnings before interest and taxes ("EBIT") represents net earnings plus income taxes and net financial expenses. Capital employed represents total assets less short-term liabilities not bearing interest, which excludes the current portion of long-term debt and current portion of lease liabilities. Average capital employed is calculated by taking the average of the beginning and ending balance of capital employed for the 52-week period.
The table below reconciles net earnings, as per IFRS, to EBIT with the ratio of return on capital employed:
52-week periods ended | ||
(in millions of US dollars, unless otherwise noted) | ||
Net earnings | 2,906.9 | 2,683.3 |
Add: | ||
Income taxes | 812.4 | 734.3 |
Net financial expenses | 264.6 | 281.0 |
EBIT | 3,983.9 | 3,698.6 |
Capital employed - Opening balance(1) | 24,623.3 | 23,971.5 |
Capital employed - Ending balance(1) | 24,087.1 | 24,001.0 |
Average capital employed | 24,355.2 | 23,986.3 |
Return on capital employed | 16.4 % | 15.4 % |
(1) The table below reconciles balance sheet line items, as per IFRS, to capital employed: |
(in millions of US dollars) | As at | As at | As at | As at |
Total Assets | 29,108.6 | 29,352.4 | 29,591.6 | 28,394.5 |
Less: Current liabilities | (5,437.6) | (5,137.9) | (6,017.4) | (5,949.7) |
Add: Current portion of long-term debt | 1.3 | 1.5 | 1.4 | 1,107.3 |
Add: Current portion of lease liabilities | 414.8 | 407.3 | 425.4 | 419.4 |
Capital employed | 24,087.1 | 24,623.3 | 24,001.0 | 23,971.5 |
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