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REVIEW OF FINANCIAL
RESULTS

Second Quarter 2010
October 6, 2009
Forward-looking Statement
    Disclaimer
This presentation contains forward-looking statements that involve risks and unce...
Mr. François J. Coutu
President and Chief Executive Officer
Financial Results
     Highlights / Q2 2010


Highlights franchising                Q2 2010          Q2 2009           Var...
Financial Results
     Highlights / Q2 2010

Summary of Results                                   Q2 2010     Q2 2009     ...
Network Performance
Retail Sales Growth / Comparable Stores


           Combined              Front-End               Pha...
Franchising Activities
Highlights / Private Label

•   Launch of 17 new
    products and increase of
    penetration rate ...
Franchising Activities
Photo Category



• Development of
  26,311,000 digital
  photos during the
  second quarter, an
  ...
Franchising Activities
Marketing Initiatives


 • Passion insert included
   in Clin d’Œil Magazine
    -   Nearly 77 000 ...
Franchising Activities
 Highlights / Real Estate Development

• Opening of 5 new
  pharmacies,
  including one
  relocatio...
Franchising Activities
  Highlights / Grand Reopenings

• 4 renovation
   projects and
   2 store
   expansions
   complet...
Franchising Activities
« My Jean Coutu, My Health Solution »



                                   • Distribution of
     ...
Rite Aid
    Highlights / Q2 2010
Rite Aid Summary of Results                    Q2 2010      Q2 2009      6 months     6 ...
Mr. André Belzile
Senior Vice President, Finance and
         Corporate Affairs
Financial Results
    Additional Information on non-GAAP Measures



Non-GAAP Measures                      Q2 2010    Q2 ...
Financial Results
    Additional Information on Non-GAAP Measures

Non-GAAP Measures                                    Q2...
Financial Position
   Consolidated Highlights


Balance Sheet                                              As at          ...
Financial Position
Consolidated Highlights


• Cash flow provided by operating activities before
  net changes in non-cash...
REVIEW OF FINANCIAL
RESULTS

Second Quarter 2010
October 6, 2009
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Q3 2009 Earning Report of Jean Coutu Group

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Transcript of "Q3 2009 Earning Report of Jean Coutu Group"

  1. 1. REVIEW OF FINANCIAL RESULTS Second Quarter 2010 October 6, 2009
  2. 2. Forward-looking Statement Disclaimer This presentation contains forward-looking statements that involve risks and uncertainties, and which are based on the Company’s current expectations, estimates, projections and assumptions and were made by the Jean Coutu Group in light of its experience and its perception of historical trends. All statements that address expectations or projections about the future, including statements about the Company’s strategy for growth, costs, operating or financial results, are forward-looking statements. All statements other than statements of historical facts, including statements regarding the prospects of the Company’s industry and the Company’s prospects, plans, financial position and business strategy may constitute forward- looking statements within the meaning of the Canadian securities legislation and regulations. Some of the forward-looking statements may be identified by the use of forward-looking terminology such as "may", "will", "expect", "intend", "estimate", "project", "could", "anticipate", "plan", "foresee", "believe" or "continue" or the negatives of these terms or variations of them or similar terminology. Although the Company believes that the expectations reflected in these forward-looking statements are reasonable, it can give no assurance that these expectations will prove to have been correct. These statements are not guarantees of future performance and involve a number of risks, uncertainties and assumptions. These statements do not reflect the potential impact of any non-recurring items or of any mergers, acquisitions, dispositions, asset write-downs or other transactions or charges that may be announced or that may occur after the date hereof. While the list below of cautionary statements is not exhaustive, some important factors that could affect our future operating results, financial position and cash flows and could cause our actual results to differ materially from those expressed in these forward-looking statements are our equity interest in Rite Aid Corporation ("Rite Aid"), general economic, financial or market conditions, the investment in ABCP, the cyclical and seasonal variations in the industry in which we operate, the changes in the regulatory environment as it relates to the sale of prescription drugs, the ability to attract and retain pharmacists, the intensity of competitive activity in the industry in which we operate, labour disruptions, including possibly strikes and labour protests, changes in laws and regulations, or in their interpretations, changes in tax regulations and accounting pronouncements, the success of the Company’s business model, the supplier and brand reputations and the accuracy of management’s assumptions and other factors that are beyond our control. These and other factors could cause our actual performance and financial results in future periods to differ materially from any estimates or projections of future performance or results expressed or implied by such forward-looking statements. Investors and others are cautioned that undue reliance should not be placed on any forward-looking statements. For more information on the risks, uncertainties and assumptions that would cause the Company’s actual results to differ from current expectations, please also refer to the Company’s public filings available at www.sedar.com and www.jeancoutu.com. In particular, further details and descriptions of these and other factors are disclosed in the Company’s Annual Information Form under "Risk Factors" and in the "Risks and uncertainties" section of the MD&A for the fiscal year ended February 28, 2009. We expressly disclaim any obligation or intention to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, unless required by the applicable securities laws. 1
  3. 3. Mr. François J. Coutu President and Chief Executive Officer
  4. 4. Financial Results Highlights / Q2 2010 Highlights franchising Q2 2010 Q2 2009 Variation 6 months 6 months Variation (millions $Can) 2010 2009 Retail sales (1) Pharmacy 9,1% 8,9% Front-end 3,7% 3,7% Total 878,9 823,6 6,7% 1 762,8 1 651,7 6,7% Distribution center sales Pharmacy 9,8% 9,8% Front-end 6,3% 6,9% Total 549,0 509,9 7,7% 1 108,6 1 026,6 8,0% Other revenues 59,7 57,6 3,6% 119,4 115,2 3,6% Revenues franchising 608,7 567,5 7,3% 1 228,0 1 141,8 7,5% (1) Franchised outlets’ retail sales are not included in the Company’s consolidated financial statements 3
  5. 5. Financial Results Highlights / Q2 2010 Summary of Results Q2 2010 Q2 2009 6 months 6 months (millions $Can, except EPS) 2010 2009 Sales 549,0 509,9 1 108,6 1 026,6 Gross profit 50,9 44,8 106,4 89,7 as a % of sales 9,3% 8,8% 9,6% 8,7% Other revenues 59,7 57,6 119,4 115,2 General and operating expenses 52,3 47,0 105,7 96,4 as a % of revenues 8,6% 8,3% 8,6% 8,4% Operating income before amortization 61,4 56,8 126,1 111,2 as a % of revenues 10,1% 10,0% 10,3% 9,7% Share of loss in Rite Aid 24,3 73,1 55,2 126,5 Net earnings (loss) 14,9 -39,1 25,2 -59,3 Earnings (loss) per share 0,07 $ -0,16 $ 0,11 $ -0,24 $ Earnings (loss) per share before specific items 0,06 $ -0,16 $ 0,09 $ -0,24 $ Earnings per share before specific items and share of loss in Rite Aid 0,16 $ 0,14 $ 0,32 $ 0,27 $ 4
  6. 6. Network Performance Retail Sales Growth / Comparable Stores Combined Front-End Pharmacy % 7 6 5 4 3 2 1 0 -1 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2009 2010 5
  7. 7. Franchising Activities Highlights / Private Label • Launch of 17 new products and increase of penetration rate to reach 10.7% compared with 10.5% for the second quarter of last year 6
  8. 8. Franchising Activities Photo Category • Development of 26,311,000 digital photos during the second quarter, an increase of 4.1% over last year’s comparable period 7
  9. 9. Franchising Activities Marketing Initiatives • Passion insert included in Clin d’Œil Magazine - Nearly 77 000 copies distributed 8
  10. 10. Franchising Activities Highlights / Real Estate Development • Opening of 5 new pharmacies, including one relocation during the last quarter St-Jérôme, QC Chambly, QC Laval, QC 9
  11. 11. Franchising Activities Highlights / Grand Reopenings • 4 renovation projects and 2 store expansions completed during the last quarter ÎlesHochelaga, Mtl, QC de la Madeleine, QC Fabreville, QC Côte des Neiges, Mtl, QC 10
  12. 12. Franchising Activities « My Jean Coutu, My Health Solution » • Distribution of 6,600 free reusable bags in exchange of expired medication in the quarter 11
  13. 13. Rite Aid Highlights / Q2 2010 Rite Aid Summary of Results Q2 2010 Q2 2009 6 months 6 months (millions $US, ex cept EPS) 2010 2009 Revenues 6 321,9 6 500,2 12 853,0 13 113,1 Gross profit 1 688,3 1 778,2 3 462,3 3 586,4 as a % of revenues 26,7% 27,4% 26,9% 27,3% Selling, general and administrative expenses 1 645,9 1 780,6 3 356,6 3 573,6 as a % of revenues 26,0% 27,4% 26,1% 27,3% Adjusted EBITDA 216,5 219,9 465,7 461,0 as a % of revenues 3,4% 3,4% 3,6% 3,5% Net loss -116,0 -222,0 -214,5 -378,6 Basic and diluted loss per share -$0,14 -$0,27 -$0,25 -$0,47 • Rite Aid revised its guidance for its 2010 fiscal year : - Sales in a range of $US 25.7 B to $US 26.2 B - Comparable sales growth of -1.0% to 1.0% - Adjusted EBITDA in a range of $US 900 M to $US 1 B - Net loss in a range of $US 390 M to $US 615 M 12
  14. 14. Mr. André Belzile Senior Vice President, Finance and Corporate Affairs
  15. 15. Financial Results Additional Information on non-GAAP Measures Non-GAAP Measures Q2 2010 Q2 2009 6 months 6 months (millions $Can) 2010 2009 Net earnings (loss) 14,9 -39,1 25,2 -59,3 Share of loss in Rite Aid 24,3 73,1 55,2 126,5 Financing expenses -1,9 1,5 -4,1 2,8 Income Taxes 16,6 15,8 35,3 30,5 Operating Income 53,9 51,3 111,6 100,5 Amortization 7,5 5,5 14,5 10,7 Operating income before amortization 61,4 56,8 126,1 111,2 14
  16. 16. Financial Results Additional Information on Non-GAAP Measures Non-GAAP Measures Q2 2010 Q2 2009 6 months 6 months (millions $Can, except EPS) 2010 2009 Net earnings (loss) 14,9 -39,1 25,2 -59,3 Unrealized foreign exchange losses (gains) on monetary items - 0,2 -0,8 0,2 Change in fair value of third party asset-backed commercial paper -2,1 - -4,0 - Earnings (loss) before specific items 12,8 -38,9 20,4 -59,1 Share of loss in Rite Aid 24,3 73,1 55,2 126,5 Earnings before specific items and share of loss in Rite Aid 37,1 34,2 75,6 67,4 Earnings (loss) per share 0,07 $ -0,16 $ 0,11 $ -0,24 $ Unrealized foreign exchange losses (gains) on monetary items - - - - Change in fair value of third party asset-backed commercial paper -0,01 $ - -0,02 $ - Earnings (loss) per share before specific items 0,06 $ -0,16 $ 0,09 $ -0,24 $ Share of loss in Rite Aid 0,10 $ 0,30 $ 0,23 $ 0,51 $ Earnings per share before specific items and share of loss in Rite Aid 0,16 $ 0,14 $ 0,32 $ 0,27 $ 15
  17. 17. Financial Position Consolidated Highlights Balance Sheet As at As at (millions $Can, except ratios and NBV) August 29, 2 009 Feb. 28 , 2009 Long term debt (including current portion) 257,7 275,7 Ratio of long term debt (including current portion) to operating income before amortization 1,04x 1,18x Ratio of long term debt (including current portion) to total capitalization 36,0% 37,7% Shareholders' equity 458,8 455,6 Net Book Value per share 1,94 $ 1,93 $ Investments 51,9 110,1 Total Assets 981,7 1 014,4 16
  18. 18. Financial Position Consolidated Highlights • Cash flow provided by operating activities before net changes in non-cash asset and liability items of $45.2 M in the second quarter of 2010 fiscal year • Cash flow used in investing activities of $26.0 M for the second quarter of 2010 fiscal year: - Purchase of capital assets of $14.0 M for real estate development - Investment in incentives to franchisees of $12.9 M for the acquisition of independent pharmacies • Cash flow used in financing activities of $12.9 M 17
  19. 19. REVIEW OF FINANCIAL RESULTS Second Quarter 2010 October 6, 2009
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