TORONTO, May 10, 2016 /CNW/ - George Weston Limited
(TSX: WN) ("GWL" or the "Company") today announced its consolidated
unaudited results for the 12 weeks ended March 26, 2016.
GWL's 2016 First Quarter Report to Shareholders has been filed
with SEDAR and is available at sedar.com and in the Investor
Centre section of the Company's website at weston.ca.
"Both of the Company's operating segments continued to execute
on their strategic priorities in the first quarter of 2016. We
remain confident in the Company's ability to deliver long term
growth and profitability and today George Weston Limited announced
a dividend increase for the fourth consecutive year", said
W. Galen Weston, Executive Chairman, George Weston
Limited.
2016 FIRST QUARTER HIGHLIGHTS
(unaudited)
|
($ millions except
where otherwise indicated)
|
|
12 Weeks
Ended
|
|
|
For the periods ended
as indicated
|
|
Mar. 26, 2016
|
|
Mar. 28,
2015
|
|
Change
|
Sales
|
|
$
|
10,800
|
|
$
|
10,409
|
|
3.8 %
|
Adjusted
EBITDA(1)
|
|
$
|
890
|
|
$
|
850
|
|
4.7 %
|
Adjusted EBITDA
margin(1)
|
|
|
8.2%
|
|
|
8.2%
|
|
|
Net earnings attributable to shareholders of the
Company
|
|
$
|
47
|
|
$
|
167
|
|
(71.9) %
|
Net earnings available to common shareholders of
the Company
|
|
$
|
37
|
|
$
|
157
|
|
(76.4) %
|
Adjusted net earnings
available to common shareholders
of the Company(1)
|
|
$
|
168
|
|
$
|
152
|
|
10.5 %
|
Diluted net earnings per common share
($)
|
|
$
|
0.29
|
|
$
|
1.23
|
|
(76.4) %
|
Adjusted diluted net
earnings per common share(1) ($)
|
|
$
|
1.31
|
|
$
|
1.19
|
|
10.1 %
|
|
|
|
|
|
|
|
|
|
Pavi Binning, President and Chief
Executive Officer, George Weston Limited, commented that "George
Weston Limited's first quarter results came in as expected. Loblaw
continued to execute against its financial plan and remains
confident in its ability to fund growth initiatives despite a
highly competitive retail environment and the continued pressure of
healthcare reform. Weston Foods delivered sales growth and results
in line with expectations as it continued to invest in the business
and execute on its priorities".
CONSOLIDATED RESULTS OF OPERATIONS
Adjusted net earnings available to common shareholders of the
Company(1) increased by $16 million ($0.12 per common share) to $168 million
($1.31 per common share) in the first
quarter of 2016 compared to the same period in 2015. The
improvement was primarily due to an increase in Loblaw Companies
Limited ("Loblaw") earnings, driven by the results of its Retail
segment including the positive contribution from incremental net
synergies.
Net earnings available to common shareholders of the Company
decreased by $120 million ($0.94
per common share) to $37 million ($0.29 per common share) in the first quarter of
2016 compared to the same period in 2015. The decrease in net
earnings available to common shareholders of the Company was as a
result of the increase in operating performance, as described
above, being more than offset by the unfavourable year-over-year
impact of the following significant items:
- the unfavourable impact of foreign currency translation losses
of $77 million ($0.53 per common share); and
- the unfavourable impact of an increase in net interest expense
and other financing charges primarily due to the fair value
adjustment of the forward sale agreement for 9.6 million Loblaw
common shares of $85 million
($0.48 per common share).
REPORTABLE OPERATING SEGMENTS
Weston Foods Segment
Results
(unaudited)
|
|
|
|
|
|
|
|
($ millions except
where otherwise indicated)
|
|
12 Weeks
Ended
|
|
Change
|
For the periods ended
as indicated
|
|
Mar. 26, 2016
|
|
Mar. 28,
2015
|
|
Sales
|
|
$
|
562
|
|
|
$
|
504
|
|
11.5%
|
Adjusted
EBITDA(1)
|
|
$
|
63
|
|
|
$
|
63
|
|
|
Adjusted EBITDA
margin(1)
|
|
|
11.2%
|
|
|
|
12.5%
|
|
|
Depreciation and
amortization(i)
|
|
$
|
27
|
|
|
$
|
18
|
|
50.0%
|
|
|
|
|
|
|
|
|
|
|
(i)
|
Depreciation and
amortization in the first quarter of 2016 includes $6 million (2015
– nil) of accelerated depreciation recorded as restructuring and
other charges.
|
Sales Weston Foods sales in the first quarter of
2016 were $562 million, an increase of $58 million, or
11.5%, compared to the same period in 2015. Sales included the
positive impact of foreign currency translation of approximately
6.7%. Excluding the impact of foreign currency translation, sales
increased by 4.8% primarily due to an increase in volumes and the
combined positive impact of pricing and changes in sales mix. The
timing of Easter had a nominal impact when compared to 2015.
Adjusted EBITDA(1) Weston Foods adjusted
EBITDA(1) in the first quarter of 2016 was flat at
$63 million, compared to the same period in 2015. The
positive impact of the increase in sales and productivity
improvements was offset by higher input costs, continued
investments in the business and new plant costs.
Adjusted EBITDA margin(1) in the first quarter of
2016 was 11.2% compared to 12.5% in the same period in 2015.
The decline in adjusted EBITDA margin(1) in the first
quarter of 2016 was due to incremental investments in the business
and new plant costs.
Depreciation and Amortization Weston Foods
depreciation and amortization was $27 million in the first
quarter of 2016, an increase of $9 million compared to the
same period in 2015. Depreciation and amortization included
$6 million (2015 – nil) of accelerated depreciation related to
the planned closures of pie and cake manufacturing facilities.
Excluding this amount, depreciation and amortization increased
$3 million due to investments in capital.
Weston Foods Other Business Matters
Restructuring Weston Foods continuously
evaluates strategic and cost reduction initiatives related to its
manufacturing assets, distribution networks and administrative
infrastructure with the objective of ensuring a low cost
operating structure. Restructuring activities related to these
initiatives are ongoing and in the first quarter of 2016, Weston
Foods recorded restructuring and other charges of $9 million
(2015 – $4 million), including $6 million (2015 – nil) of
accelerated depreciation. These charges primarily relate to
restructuring plans to close manufacturing facilities in
Canada and the United States ("U.S.") with production
transferring to other facilities.
Loblaw Segment Results
(unaudited)
|
|
|
|
|
|
|
|
($ millions except
where otherwise indicated)
|
|
12 Weeks
Ended
|
|
Change
|
For the periods ended
as indicated
|
|
Mar. 26, 2016
|
|
Mar. 28,
2015
|
|
Sales
|
|
$
|
10,381
|
|
$
|
10,048
|
|
3.3%
|
Retail gross
profit(i)
|
|
$
|
2,776
|
|
$
|
2,624
|
|
5.8%
|
Adjusted
EBITDA(1)
|
|
$
|
827
|
|
$
|
787
|
|
5.1%
|
Adjusted EBITDA
margin(1)
|
|
8.0%
|
|
7.8%
|
|
|
Depreciation and
amortization(ii)
|
|
$
|
368
|
|
$
|
370
|
|
(0.5)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(i)
|
Loblaw Retail gross
profit includes a charge of $1 million (2015 – nil) related to
restructuring and other charges.
|
(ii)
|
Depreciation and
amortization includes $124 million (2015 – $124 million) of
amortization of intangible assets acquired with Shoppers Drug Mart
Corporation ("Shoppers Drug Mart").
|
Overall Loblaw Performance Loblaw adjusted
EBITDA(1) increased by $40
million in the first quarter of 2016 compared to the same
period in 2015, primarily driven by Retail. Retail adjusted
EBITDA(1) growth was driven by higher sales, including
the positive impact of Easter, incremental net synergies, an
increase in Retail gross profit rate and improvements in selling,
general and administrative expenses ("SG&A") excluding the
impact of consolidated franchises. Retail adjusted
EBITDA(1) included the positive impact of $28 million in incremental net synergies.
Sales Loblaw sales in the first quarter of 2016
were $10,381 million, an
increase of $333 million compared to the same period in
2015, primarily driven by Retail. Retail sales increased by
$324 million, or 3.3%, compared to the same period
in 2015 and included food retail sales of $7,390 million (2015 – $7,234 million) and drug retail sales of
$2,764 million (2015 – $2,596 million).
The increase in Retail sales was primarily due to the following
factors:
- food retail same-store sales growth was 2.0%. The timing of
Easter had a positive impact of approximately 1.0%. Loblaw's food
retail average quarterly internal food price index was moderately
higher than the average quarterly national food price inflation of
4.3% as measured by "The Consumer Price Index for Food Purchased
from Stores" ("CPI"). CPI does not necessarily reflect the effect
of inflation on the specific mix of goods sold in Loblaw
stores;
- drug retail same-store sales growth was 6.3%, including
same-store pharmacy sales growth of 4.2% and front store same-store
sales growth of 8.2%. The timing of Easter had a positive impact on
front store same-store sales of approximately 1.9%; and
- in the last 12 months, there was a decrease in Retail net
square footage of 0.2 million square feet, or 0.3%, primarily
driven by Loblaw's store closure plan announced in 2015.
Retail gross profit and adjusted EBITDA(1) in the
first quarter of 2016 included the impacts related to the
franchises consolidated in the quarter, as set out in "Loblaw Other
Business Matters".
Retail Gross Profit Loblaw Retail gross profit in
the first quarter of 2016 was $2,776 million, an increase of
$152 million compared to the same period in 2015 and included
the unfavourable year-over-year impact of a charge of $1 million related to restructuring and other
charges.
Excluding this impact, Retail gross profit increased
$153 million to $2,777 million. Retail gross profit
percentage was 27.3%, an increase of 60 basis points compared to
the same period in 2015. Excluding the consolidation of franchises,
Retail gross profit percentage was 26.9%, an increase of 20 basis
points compared to the same period in 2015 driven by the
achievement of operational synergies and an increase in underlying
Retail gross margin, partially offset by the impact of healthcare
reform.
Adjusted EBITDA(1) Loblaw adjusted
EBITDA(1) in the first quarter of 2016 was
$827 million, an increase of $40 million compared to the
same period in 2015, primarily driven by Retail. Retail adjusted
EBITDA(1) increased $41 million driven by an
increase in Retail gross profit, as described above, partially
offset by an increase in Retail SG&A of $112 million. Retail SG&A as a percentage of
sales was 19.6%, an increase of 40 basis points compared to the
first quarter of 2015. Excluding the consolidation of franchises,
as a percentage of sales, SG&A was 19.1%, an improvement of 10
basis points compared to the same period in 2015 with higher store
and store support costs being more than offset by the achievement
of operational synergies and favourable foreign exchange
impacts.
Depreciation and Amortization Loblaw's depreciation
and amortization was $368 million in the first
quarter of 2016, a decrease of $2 million compared
to the same period in 2015, and included $124 million
(2015 – $124 million) of amortization of intangible
assets related to the acquisition of Shoppers Drug Mart. The
decline in depreciation and amortization was driven by lower
depreciation on older supply chain assets.
Loblaw Other Business Matters
Consolidation of Franchises As at the
end of the first quarter of 2016, Loblaw consolidated 115 franchise
stores, which included 30 additional franchises and 85 stores
consolidated in 2015. Loblaw recorded the incremental impact of the
115 consolidated franchise stores as follows:
(unaudited)
|
|
|
($
millions)
|
12 Weeks
Ended
|
For the period ended
as indicated
|
Mar. 26, 2016
|
Sales
|
|
$
|
64
|
Retail gross
profit
|
|
59
|
Adjusted
EBITDA(1)
|
|
(6)
|
Depreciation and
amortization
|
|
4
|
Net loss attributable
to Non-Controlling Interest
|
|
(9)
|
|
|
|
|
Loblaw operates more than 500 franchise stores, including the
115 consolidated franchise stores, under the new and existing
franchise agreements. Loblaw will continue to convert franchises to
the new, simplified franchise agreement as the existing agreements
expire.
OUTLOOK(2)
Weston Foods expects sales growth generated by new capacity and
productivity improvements to drive an increase in adjusted
EBITDA(1) in 2016 when compared to 2015. The increase in
adjusted EBITDA(1) is expected to be greater in the
second half of the year as new plant capacity and capability come
on-line. Depreciation is projected to increase in 2016 when
compared to 2015, and largely offset the improvement in adjusted
EBITDA(1). Management expects to make capital
investments of approximately $300 million in 2016.
Loblaw remains focused on its strategic framework, delivering
the best in food, best in health and beauty, operational excellence
and growth. This strategic framework is supported by a financial
strategy of maintaining a stable trading environment that targets
positive same-store sales and stable gross margin; surfacing
efficiencies; delivering synergies as a result of its acquisition
of Shoppers Drug Mart; and returning capital to shareholders. In
2016, Loblaw expects to:
- deliver positive same-store sales and stable gross margin in
its Retail segment in a highly competitive grocery market and with
continued negative pressure from healthcare reform;
- grow adjusted net earnings;
- invest approximately $1.3 billion
in capital expenditures, including $1.0
billion in its Retail segment; and
- return capital to shareholders by allocating a significant
portion of free cash flow to share repurchases.
For 2016, the Company expects growth in net earnings to be
driven by an increase in net earnings at Loblaw, and the positive
impact of the Company's increased ownership in Loblaw as a result
of Loblaw's share repurchases.
DECLARATION OF QUARTERLY DIVIDENDS
Subsequent to the end of the first quarter of 2016, the
Company's Board of Directors declared a quarterly dividend on GWL
Common Shares, Preferred Shares, Series I, Preferred Shares, Series
III, Preferred Shares, Series IV and Preferred Shares, Series
V payable as follows:
|
Common
Shares
|
$0.44 per share
payable July 1, 2016, to shareholders of record June 15,
2016;
|
|
|
|
|
|
|
Preferred Shares,
Series I
|
$0.3625 per share
payable June 15, 2016, to shareholders of record May 31,
2016;
|
|
|
|
|
|
|
Preferred Shares,
Series III
|
$0.3250 per share
payable July 1, 2016, to shareholders of record June 15,
2016;
|
|
|
|
|
|
|
Preferred Shares,
Series IV
|
$0.3250 per share
payable July 1, 2016, to shareholders of record June 15, 2016;
and
|
|
|
|
|
|
|
Preferred Shares,
Series V
|
$0.296875 per share
payable July 1, 2016, to shareholders of record June 15,
2016.
|
|
NON-GAAP FINANCIAL MEASURES
The Company uses the following non-GAAP financial measures:
EBITDA, adjusted EBITDA and adjusted EBITDA margin, adjusted net
earnings attributable to shareholders of the Company, adjusted net
earnings available to common shareholders of the Company and
adjusted diluted net earnings per common share. In addition to
these items, the following measures are used by management in
calculating adjusted diluted net earnings per common share:
adjusted net interest expense and other financing charges,
adjusted income taxes and adjusted income tax rate. The Company
believes these non-GAAP financial measures provide useful
information to both management and investors in measuring the
financial performance of the Company for the reasons outlined
below.
Management uses these and other non-GAAP financial measures to
exclude the impact of certain expenses and income that must be
recognized under GAAP when analyzing consolidated and segment
underlying operating performance. The excluded items are not
necessarily reflective of the Company's underlying operating
performance and make comparisons of underlying financial
performance between periods difficult. From time to time, the
Company may exclude additional items if it believes doing so would
result in a more effective analysis of underlying operating
performance. The exclusion of certain items does not imply that
they are non-recurring.
These measures do not have a standardized meaning prescribed by
GAAP and therefore they may not be comparable to similarly titled
measures presented by other publicly traded companies, and they
should not be construed as an alternative to other financial
measures determined in accordance with GAAP.
For details on the nature of items excluded in the calculation
of any of the non-GAAP financial measures detailed below, see the
"Non-GAAP Financial Measures" section of the Company's First
Quarter 2016 Report to Shareholders.
EBITDA and Adjusted EBITDA The Company believes
adjusted EBITDA is useful in assessing and making decisions
regarding the underlying operating performance of the Company's
ongoing operations and in assessing the Company's ability to
generate cash flows to fund its cash requirements, including its
capital investment program.
The following table reconciles EBITDA and adjusted EBITDA to
operating income, which is reconciled to GAAP net earnings
attributable to shareholders of the Company reported for the
periods ended as indicated.
|
|
12 Weeks
Ended
|
(unaudited)
|
|
|
|
|
Mar. 26, 2016
|
|
|
|
Mar. 28,
2015
|
($ millions)
|
|
Weston
Foods
|
|
Loblaw
|
Other(i)
|
Consolidated
|
|
Weston
Foods
|
Loblaw
|
Other(i)
|
Consolidated
|
Net earnings
attributable to shareholders of the Company
|
|
|
|
|
|
|
$
|
47
|
|
|
|
|
$
|
167
|
Add impact of the
following:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-controlling
interests
|
|
|
|
|
|
|
98
|
|
|
|
|
79
|
|
Income
taxes
|
|
|
|
|
|
|
75
|
|
|
|
|
96
|
|
Net interest expense
and other financing charges
|
|
|
|
|
|
|
237
|
|
|
|
|
177
|
Operating
income
|
|
$
|
34
|
|
$
|
434
|
$
|
(11)
|
$
|
457
|
|
$
|
41
|
$
|
412
|
$
|
66
|
$
|
519
|
Depreciation and
amortization
|
|
27
|
|
|
368
|
395
|
|
18
|
370
|
|
388
|
EBITDA
|
|
$
|
61
|
|
$
|
802
|
$
|
(11)
|
$
|
852
|
|
$
|
59
|
$
|
782
|
$
|
66
|
$
|
907
|
Operating
income
|
|
$
|
34
|
|
$
|
434
|
$
|
(11)
|
$
|
457
|
|
$
|
41
|
$
|
412
|
$
|
66
|
$
|
519
|
Add impact of the
following:
|
|
|
|
|
|
|
|
|
|
|
Amortization of
intangible assets acquired with Shoppers Drug Mart
|
|
|
|
|
124
|
|
124
|
|
|
124
|
|
124
|
|
Restructuring and
other charges
|
|
9
|
|
|
1
|
|
10
|
|
4
|
12
|
|
16
|
|
Prior year tax
assessment
|
|
|
|
|
10
|
|
10
|
|
|
|
|
|
|
Fixed asset and other
related impairments, net of recoveries
|
|
|
|
|
2
|
|
2
|
|
|
3
|
|
3
|
|
Pension annuities and
buy-outs
|
|
|
|
|
2
|
|
2
|
|
|
|
|
|
|
Shoppers Drug Mart
divestitures loss
|
|
|
|
|
|
|
|
|
|
2
|
|
2
|
|
Fair value adjustment
of derivatives
|
|
(1)
|
|
|
10
|
|
9
|
|
(1)
|
(12)
|
|
(13)
|
|
Inventory
loss
|
|
|
|
|
|
|
|
|
|
1
|
|
|
1
|
|
Foreign currency
translation
|
|
|
|
|
|
11
|
11
|
|
|
|
(66)
|
(66)
|
Adjusted operating
income
|
|
$
|
42
|
|
$
|
583
|
|
$
|
625
|
|
$
|
45
|
$
|
541
|
|
$
|
586
|
Depreciation and
amortization excluding the impact of the above
adjustments(ii)
|
|
21
|
|
|
244
|
|
265
|
|
18
|
246
|
|
264
|
Adjusted
EBITDA
|
|
$
|
63
|
|
$
|
827
|
|
$
|
890
|
|
$
|
63
|
$
|
787
|
|
$
|
850
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(i)
|
Represents the effect
of foreign currency translation on a portion of the U.S. dollar
denominated cash and cash equivalents and short term investments
held by foreign operations.
|
(ii)
|
Depreciation and
amortization for the calculation of adjusted EBITDA excludes $124
million (2015 – $124 million) of amortization of intangible assets,
acquired with Shoppers Drug Mart, recorded by Loblaw and $6 million
(2015 – nil) of accelerated depreciation recorded by Weston Foods,
related to restructuring and other charges.
|
The following new item impacted operating income in the first
quarter of 2016:
Prior year tax assessment In the first
quarter of 2016, the province of Ontario enacted retroactive amendments to the
Land Transfer Tax Act. The amendments were applicable to land
transfer activities between related parties that occurred on
or after July 19, 1989. The
amendments impacted certain land transfers between Loblaw and
Choice Properties Real Estate Investment Trust at the time of the
initial public offering, resulting in a charge to SG&A in the
first quarter of 2016.
Adjusted Net Interest Expense and Other Financing Charges
The Company believes adjusted net interest expense and other
financing charges is useful in assessing the ongoing net financing
costs of the Company.
The following table reconciles adjusted net interest expense and
other financing charges to GAAP net interest expense and other
financing charges reported for the periods ended as indicated.
(unaudited)
|
12 Weeks
Ended
|
($
millions)
|
Mar. 26, 2016
|
|
Mar. 28,
2015
|
Net interest expense
and other financing charges
|
|
$
|
237
|
|
|
|
$
|
177
|
Add:
|
Fair value adjustment
of the Trust Unit liability
|
|
(21)
|
|
|
|
(39)
|
|
Fair value adjustment
of the forward sale agreement for 9.6 million Loblaw
common shares
|
|
(82)
|
|
|
|
3
|
|
Accelerated
amortization of deferred financing costs
|
|
|
|
|
(3)
|
Adjusted net interest
expense and other financing charges
|
|
$
|
134
|
|
|
|
$
|
138
|
|
|
|
|
|
|
|
Adjusted Income Taxes and Adjusted Income Tax Rate
The Company believes the adjusted income tax rate applicable
to adjusted earnings before taxes is useful in assessing the
underlying operating performance of its business.
The following table reconciles the effective income tax rate
applicable to adjusted earnings before taxes to the GAAP effective
income tax rate applicable to earnings before taxes as reported for
the periods ended as indicated.
(unaudited)
|
|
12 Weeks
Ended
|
($ millions except
where otherwise indicated)
|
|
Mar. 26, 2016
|
|
Mar. 28,
2015
|
Adjusted operating
income(i)
|
|
$
|
625
|
|
|
$
|
586
|
Adjusted net interest
expense and other financing charges(i)
|
|
134
|
|
|
138
|
Adjusted earnings
before taxes
|
|
$
|
491
|
|
|
$
|
448
|
Income
taxes
|
|
$
|
75
|
|
|
$
|
96
|
Add:
|
Tax impact of items
excluded from adjusted earnings before
taxes(ii)
|
|
65
|
|
|
26
|
|
Statutory corporate
income tax rate change
|
|
(3)
|
|
|
|
Adjusted income
taxes
|
|
$
|
137
|
|
|
$
|
122
|
Effective income tax
rate applicable to earnings before taxes
|
|
|
34.1%
|
|
|
|
28.1%
|
Adjusted income tax
rate applicable to adjusted earnings before taxes
|
|
|
27.9%
|
|
|
|
27.2%
|
|
|
|
|
|
|
|
(i)
|
See reconciliations
of adjusted operating income and adjusted net interest expense and
other financing charges above.
|
(ii)
|
See the EBITDA and
adjusted EBITDA table and the adjusted net interest expense and
other financing charges table above for a complete list of items
excluded from adjusted earnings before taxes.
|
The following new item impacted incomes taxes in the first
quarter of 2016:
Statutory corporate income tax rate change
The Company's deferred income tax assets and liabilities are
impacted by changes to provincial and federal statutory corporate
income tax rates resulting in a charge or benefit to earnings. The
Company implements changes in the statutory corporate income tax
rate in the same period the change is substantively enacted by the
legislative body. In the first quarter of 2016, the government of
New Brunswick announced an
increase to the statutory corporate income tax rate from 12% to 14%
effective April 1, 2016 which was enacted in the first
quarter of 2016. As a result, Loblaw recorded a charge related to
the remeasurement of deferred tax assets and liabilities.
Adjusted Diluted Net Earnings per Common Share and Adjusted
Net Earnings The Company believes adjusted diluted net
earnings per common share and adjusted net earnings are useful in
assessing the Company's underlying operating performance and in
making decisions regarding the ongoing operations of its
business.
The following table reconciles adjusted diluted net earnings per
common share and adjusted net earnings to GAAP diluted net earnings
per common share reported for the periods ended as indicated.
(unaudited)
|
|
12 Weeks
Ended
|
($ except where
otherwise indicated)
|
|
Mar. 26, 2016
|
|
Mar. 28,
2015
|
Diluted net earnings
per common share ($)
|
|
$
|
0.29
|
|
|
|
$
|
1.23
|
Add impact of the
following(i):
|
|
|
|
|
|
|
Amortization of
intangible assets acquired with Shoppers Drug Mart
|
|
0.33
|
|
|
|
0.32
|
|
Restructuring and
other charges
|
|
0.05
|
|
|
|
0.06
|
|
Prior year tax
assessment
|
|
0.02
|
|
|
|
|
|
Pension annuities and
buy-outs
|
|
0.01
|
|
|
|
|
|
Fixed asset and other
related impairments, net of recoveries
|
|
0.01
|
|
|
|
0.01
|
|
Shoppers Drug Mart
divestitures loss
|
|
|
|
|
0.01
|
|
Fair value adjustment
of derivatives
|
|
0.02
|
|
|
|
(0.04)
|
|
Inventory
loss
|
|
|
|
|
0.01
|
|
Fair value adjustment
of the forward sale agreement for 9.6 million Loblaw common
shares
|
|
0.46
|
|
|
|
(0.02)
|
|
Fair value adjustment
of the Trust Unit liability
|
|
0.03
|
|
|
|
0.05
|
|
Accelerated
amortization of deferred financing costs
|
|
|
|
|
0.01
|
|
Statutory corporate
income tax rate change
|
|
0.01
|
|
|
|
|
|
Foreign currency
translation
|
|
0.08
|
|
|
|
(0.45)
|
Adjusted diluted net
earnings per common share
|
|
$
|
1.31
|
|
|
|
$
|
1.19
|
Weighted average
common shares outstanding(ii) (millions)
|
|
128.3
|
|
|
|
128.1
|
Adjusted net earnings
attributable to shareholders of the Company ($
millions)
|
|
$
|
178
|
|
|
|
$
|
162
|
Prescribed dividends
on preferred shares in share capital ($ millions)
|
|
10
|
|
|
|
10
|
Adjusted net earnings
available to common shareholders of the Company ($
millions)
|
|
$
|
168
|
|
|
|
$
|
152
|
|
|
|
|
|
|
(i)
|
Net of income taxes
and non-controlling interests, as applicable.
|
(ii)
|
Includes impact of
dilutive instruments for purposes of calculating adjusted diluted
net earnings per common share.
|
FORWARD-LOOKING STATEMENTS
This News Release contains forward-looking statements about the
Company's objectives, plans, goals, aspirations, strategies,
financial condition, results of operations, cash flows,
performance, prospects and opportunities. Specific forward-looking
statements in this News Release include, but are not limited to,
statements with respect to the Company's anticipated future
results, events and plans, synergies and other anticipated benefits
associated with the acquisition of Shoppers Drug Mart, and planned
capital investments. These specific forward-looking statements are
contained throughout this News Release including, without
limitation, in the "Outlook" section of this News Release.
Forward-looking statements are typically identified by words such
as "expect", "anticipate", "believe", "foresee", "could",
"estimate", "goal", "intend", "plan", "seek", "strive", "will",
"may", "maintain", "achieve", "grow", and "should" and similar
expressions, as they relate to the Company and its management.
Forward-looking statements reflect the Company's current
estimates, beliefs and assumptions, which are based on management's
perception of historical trends, current conditions and expected
future developments, as well as other factors it believes are
appropriate in the circumstances. The Company's expectation of
operating and financial performance in 2016 is based on certain
assumptions including assumptions about sales and volume growth,
anticipated cost savings, operating efficiencies, and continued
growth from current initiatives. The Company's estimates, beliefs
and assumptions are inherently subject to significant business,
economic, competitive and other uncertainties and contingencies
regarding future events and as such, are subject to change. The
Company can give no assurance that such estimates, beliefs and
assumptions will prove to be correct.
Numerous risks and uncertainties could cause the Company's
actual results to differ materially from those expressed, implied
or projected in the forward-looking statements, including those
described in the "Enterprise Risks and Risk Management" section of
the Management's Discussion and Analysis in the Company's 2015
Annual Report and the Company's Annual Information Form ("AIF") for
the year ended December 31, 2015. Such risks and uncertainties
include:
- changes to the regulation of generic prescription drug prices,
the reduction of reimbursements under public drug benefit plans and
the elimination or reduction of professional allowances paid by
drug manufacturers;
- the inability of the Company's information technology ("IT")
infrastructure to support the requirements of the Company's
business, or the occurrence of any internal or external security
breaches, denial of service attacks, viruses, worms and other known
or unknown cybersecurity or data breaches;
- failure to realize benefits from investments in Loblaw's new IT
systems;
- the inability of the Company to manage inventory to minimize
the impact of obsolete or excess inventory and to control
shrink;
- public health events including those related to food and drug
safety;
- failure by Loblaw to realize the anticipated strategic benefits
associated with the acquisition of Shoppers Drug Mart;
- the inability of the Company to effectively develop and execute
its strategy;
- failure to realize anticipated results, including revenue
growth, anticipated cost savings or operating efficiencies
associated with the Company's major initiatives, including those
from restructuring;
- failure by Loblaw's franchisees or Shoppers Drug Mart licensees
("Associates") to operate in accordance with prescribed procedures
or standards, or disruptions to Loblaw's relationship with its
franchisees or Associates;
- failure to achieve desired results in labour negotiations,
including the terms of future collective bargaining agreements,
which could lead to work stoppages;
- changes in the Company's income, capital, commodity, property
and other tax and regulatory liabilities, including changes in tax
laws, regulations or future assessments;
- reliance on the performance and retention of third-party
service providers, including those associated with the Company's
supply chain and Loblaw's apparel business;
- issues with vendors in both advanced and developing
markets;
- the risk that the Company would experience a financial loss if
its counterparties fail to meet their obligations in accordance
with the terms and conditions of their contracts with the
Company;
- failure to merchandise effectively or in a manner that is
responsive to customer demand;
- heightened competition, whether from current competitors or new
entrants to the marketplace;
- the inability of the Company to anticipate, identify and react
to consumer and retail trends;
- changes in economic conditions, including economic recession or
changes in the rate of inflation or deflation, employment rates,
changes in interest rates, currency exchange rates and derivative
and commodity prices;
- the impact of potential environmental liabilities; and
- the inability of Loblaw to collect on or fund its credit card
receivables.
This is not an exhaustive list of the factors that may affect
the Company's forward-looking statements. Other risks and
uncertainties not presently known to the Company or that the
Company presently believes are not material could also cause actual
results or events to differ materially from those expressed in its
forward-looking statements. Additional risks and uncertainties are
discussed in the Company's materials filed with the Canadian
securities regulatory authorities from time to time, including
without limitation, the section entitled "Operating and Financial
Risks and Risk Management" in the Company's AIF for the year ended
December 31, 2015. Readers are
cautioned not to place undue reliance on these forward-looking
statements, which reflect the Company's expectations only as of the
date of this News Release. Except as required by law, the Company
does not undertake to update or revise any forward-looking
statements, whether as a result of new information, future events
or otherwise.
2016 FIRST QUARTER REPORT TO SHAREHOLDERS
The Company's 2015 Annual Report and 2016 First Quarter Report to
Shareholders are available in the Investor Centre section of the
Company's website at www.weston.ca and have been filed with
SEDAR and are available online at www.sedar.com.
INVESTOR RELATIONS
Shareholders, security analysts and investment professionals should
direct their requests to Mr. Geoffrey H. Wilson,
Senior Vice President, Investor Relations, Business Intelligence
and Communications, at the Company's Executive Office or
by e-mail at investor@weston.ca.
Additional financial information has been filed electronically
with various securities regulators in Canada through SEDAR. This News Release
includes selected information on Loblaw Companies Limited, a public
company with shares trading on the Toronto Stock Exchange. For
information regarding Loblaw, readers should also refer to the
materials filed by Loblaw with SEDAR from time to time. These
filings are also maintained at Loblaw's corporate website at
www.loblaw.ca.
FIRST QUARTER CONFERENCE CALL AND WEBCAST
PRESENTATION
George Weston Limited will host a conference call as well as an
audio webcast on Tuesday, May 10, 2016 at 9:00 a.m.
(EDT). To access via tele-conference, please dial
(647) 427-7450. The playback will be available two hours after
the event at (416) 849-0833, passcode: 77470371#. To access
via audio webcast, please visit the Investor Centre section of
www.weston.ca. Pre-registration will be available.
ANNUAL MEETING
The George Weston Limited Annual Meeting of Shareholders will be
held on Tuesday, May 10, 2016,
at 11:00 a.m. (EDT) at The Royal Conservatory, TELUS Centre
for Performance and Learning, Koerner
Hall, 273 Bloor Street West, Toronto, Ontario, Canada. To access via
tele-conference, please dial (647) 427-7450. The playback
will be available two hours after the event at (416) 849-0833,
passcode: 78081258#. To access via audio webcast, please
visit the Investor Centre section of www.weston.ca.
Pre-registration will be available.
|
|
Endnotes
|
|
|
(1)
|
See "Non-GAAP
Financial Measures" section of this News Release.
|
(2)
|
This News Release
contains forward-looking information. See Forward-Looking
Statements of this News Release for a discussion of material
factors that could cause actual results to differ materially from
the forecasts and projections herein and of the material factors,
estimates, beliefs and assumptions that were applied in presenting
the conclusions, forecasts and projections presented herein. This
News Release must be read in conjunction with GWL's filings with
securities regulators made from time to time, all of which can be
found at www.weston.ca and www.sedar.com.
|
SOURCE George Weston Limited