Q2 2013 Financial Highlights

1,509 views
1,423 views

Published on

Q2 2013 Financial Highlights

Published in: Economy & Finance, Business
0 Comments
1 Like
Statistics
Notes
  • Be the first to comment

No Downloads
Views
Total views
1,509
On SlideShare
0
From Embeds
0
Number of Embeds
902
Actions
Shares
0
Downloads
7
Comments
0
Likes
1
Embeds 0
No embeds

No notes for slide

Q2 2013 Financial Highlights

  1. 1. Q2 2013 HIGHLIGHTS August 12, 2013
  2. 2. FORWARD-LOOKING STATEMENTS 3 Forward-looking statements are included in the following presentations. These forward-looking statements are identified by the use of terms and phrases such as “anticipate”, “believe”, “could”, “estimate”, “expect”, “intend”, “may”, “plan”, “predict”, “project”, “will”, “would”, ”should” and similar terms and phrases, including references to assumptions. Such statements may involve but are not limited to comments with respect to strategies, expectations, objectives, goals, aspirations, intentions, planned operations or future actions. Forward-looking statements, by their nature, are based on assumptions and are subject to important risks and uncertainties. Any forecasts, predictions or forward- looking statements cannot be relied upon due to, among other things, changing external events and general uncertainties of the business and its corporate structure. Results indicated in forward-looking statements may differ materially from actual results for a number of reasons, including without limitation, dependency on top Accumulation Partners and clients, the effective implementation of Aeroplan Program enhancements and a new financial card partnership and associated cardholder migration, conflicts of interest, greater than expected redemptions for rewards, regulatory matters, retail market/economic conditions, industry competition, Air Canada liquidity issues, Air Canada or travel industry disruptions, airline industry changes and increased airline costs, supply and capacity costs, unfunded future redemption costs, failure to safeguard databases and consumer privacy, changes to coalition loyalty programs, seasonal nature of the business, other factors and prior performance, foreign operations, legal proceedings, reliance on key personnel, labour relations, pension liability, technological disruptions and inability to use third party software, failure to protect intellectual property rights, interest rate and currency fluctuations, leverage and restrictive covenants in current and future indebtedness, uncertainty of dividend payments, managing growth, credit ratings, as well as the other factors identified throughout this presentation and throughout our public disclosure record on file with the Canadian securities regulatory authorities. Slides 20 and 21 of this presentation contain certain forward-looking statements with respect to certain financial metrics in 2014 and 2015, respectively. These statements are not intended to constitute, nor should they be considered as, financial outlook or guidance within the meaning of applicable securities laws. These statements exclude the effects of fluctuations in currency exchange rates and Aimia made a number of general economic and market assumptions in making these statements, including assumptions regarding the performance of the economies in which the Corporation operates and market competition and tax laws applicable to the Corporation’s operations. In addition, the Corporation has made a number of specific assumptions in making these statements, including (i) that any migration of the Corporation’s current financial cardholders will be completed by the end of 2014 within a range that is consistent with past comparable situations in North America, (ii) a level of growth for the Corporation’s financial card business that is consistent with the general Canadian premium credit card market, and (iii) growth in the Corporation’s non-Aeroplan related business consistent with the Corporation’s three year plan. The Corporation cautions that the assumptions used to make these statements with respect to 2014 and 2015, although reasonable at the time they were made, may prove to be incorrect or inaccurate. In addition, these statements do not reflect the potential impact of any non-recurring or other special items or of any new material commercial agreements, dispositions, mergers, acquisitions, other business combinations or transactions or the outcome of ongoing discussions between Aimia, TD and CIBC that may or may not result in an agreement relating to the retention by CIBC of a portion of the portfolio and the acquisition by TD of the remainder, that may be announced or that may occur after August 12, 2013. The financial impact of these transactions and non-recurring and other special items can be complex and depends on the facts particular to each of them. We therefore cannot describe the expected impact in a meaningful way or in the same way we present known risks affecting our business. Accordingly, our actual results could differ materially from the statements made at Slides 20 and 21 of this presentation. The forward-looking statements contained herein represent the expectations of Aimia Inc., as of August 12, 2013 and are subject to change. However, Aimia disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise, except as required under applicable securities regulations. For further information, please contact Investor Relations at 416 352 3728 or karen.keyes@aimia.com .
  3. 3. RUPERT DUCHESNE GROUP CHIEF EXECUTIVE
  4. 4. Ground breaking transformation of the Aeroplan program, including: • Introduction of Distinction • New MarketFare rewards • Cancellation of the 7 year redemption policy • New financial credit card agreement with TD Bank Group The conclusion of two long running proceedings • Competition Tribunal in Canada • UK Supreme Court decision with respect to VAT Investments centred on our proprietary loyalty offering • Additional investment in Cardlytics • Acquisition of Smart Button • Impending launch of the new Aimia Loyalty Platform • Ongoing EIM Integration A LOT HAS HAPPENED SINCE MAY 5
  5. 5. MAJOR ACCUMULATION PATHS TO DISTINCTION FLIGHT-BASED ACCUMULATION Altitude SuperElite 100K Altitude Elite 35K, 50K and 75K Altitude Prestige 25K FINANCIAL CARD SPEND Enhanced premium Premium Mid-market BOTH AMPLIFIED BY SPEND WITH COALITION PARTNERS diamond Earn 100,000 eligible miles or more in one year and reach our top level, dDiamond black Earn between 50,000 and 99,999 eligible miles and you’ll achieve dBlack silver When you earn between 25,000 and 49,999 eligible miles in one year, you’ll qualify for the first level of Distinction, dSilver 6
  6. 6. Source: Aimia estimates OUR NEW AIR TRAVEL REWARDS WILL BE UNPARALLELED IN THE MARKET Getting members to departures faster Months to North American Long Haul air reward redemption Based on combined average card spend and coalition activity, and average Toronto-Vancouver fare Market fare product Fixed grid product Notes: 1. Card spend assumed to be the same for all card products, not disclosed due to confidentiality. 2. Additional spend bonuses estimated for competitive cards (e.g., gas, grocery, drug, travel spend). 3. Months required to reach reward exclude impact of welcome bonuses. 4. Fare Source: Average fare observed for Toronto – Vancouver ClassicPlus rewards in 2012, confidential. 5. CIBC Aventura World Elite figure may differ depending on grid pricing at the time of redemption; figure displayed assumes points required matches RBC Avion (35K). TD First Class Visa Infinite Aeroplan MarketFare Scotiagold Passport Visa RBC Visa Infinite Avion CIBC Aventura World Elite MasterCard World Elite Vs ClassicFlight Rewards Vs MarketFare Rewards For Distinction Diamond Member 1.1x 1.8x1.2x 1.8x1.3x 2.7x1.8x 1.7x ~12 Months Aeroplan ClassicFlight Aeroplan CLASSICPLUS 7
  7. 7. DISTINCTION LAUNCH: JULY 2013 8
  8. 8. Ground breaking transformation of the Aeroplan program, including: • Introduction of Distinction • New MarketFare rewards • Cancellation of the 7 year redemption policy • New financial credit card agreement with TD Bank Group The conclusion of two long running proceedings • Competition Tribunal in Canada • UK Supreme Court decision with respect to VAT Investments centred on our proprietary loyalty offering • Additional investment in Cardlytics • Acquisition of Smart Button • Impending launch of the new Aimia Loyalty Platform • Ongoing EIM Integration A LOT HAS HAPPENED SINCE MAY 9
  9. 9. DAVID ADAMS EXECUTIVE VICE- PRESIDENT AND CFO
  10. 10. Q2 2013 CONSOLIDATED FINANCIAL HIGHLIGHTS 11 (1) Discrepancies in variances may arise due to rounding. Year over year change has been calculated excluding the VAT and Breakage adjustments recorded in the three months ended June 30, 2013. (2) Reported results excluding the impact of VAT and Breakage adjustments recorded in the three months ended June 30, 2013. (3) Gross Billings and Adjusted EBITDA for the three months ended June 30, 2012 includes $5.5 million of compensation received from Air Canada in relation to transfer of the assets and obligations on pension benefits accrued by contact centre employees prior to 2009, who were transferred to Aeroplan in 2009. (4) Before depreciation and amortization. (5) Includes amortization of Accumulation Partners’ contracts, customer relationships and technology. (6) Constant Currency excludes the translation effect of foreign operations on the consolidated results. For more information on Constant Currency, please refer to Aimia’s August 12, 2013 earnings press release. ** information not meaningful ($ millions) Exluding Noted Items(2) 2013 Breakage Adjustment VAT Impact Reported 2013 Reported 2012 Year Over Year Constant Currency (6) Gross Billings (3) 570.5 - - 570.5 554.3 2.9% 3.1% Gross Billings from sale of Loyalty Units 414.2 - - 414.2 414.0 0.0% 0.4% Total Revenue 540.3 (663.6) - (123.3) 504.2 7.1% 7.2% Cost of rewards and direct costs 305.4 - (74.9) 230.5 279.9 9.1% 9.2% Gross margin (4) 234.9 (663.6) 74.9 (353.8) 224.3 4.7% 4.8% Gross margin (%) 43.5% ** ** ** 44.5% (1.0 pp) (1.0 pp) Depreciation and amortization(5) 30.6 - - 30.6 29.4 4.2% 4.2% Operating expenses 149.4 - 48.8 198.2 140.9 6.0% 5.9% Operating income (loss) 54.8 (663.6) 26.1 (582.7) 54.0 1.5% 2.1% Net financial income (costs) (11.0) - 17.3 6.3 (9.0) ** ** Share of net earnings (loss) of equity accounted investments (1.9) - - (1.9) 1.6 ** ** Net earnings (loss) 25.2 (483.8) 43.4 (415.2) 35.0 ** ** Adjusted EBITDA (3) 100.2 (24.8) 26.6 102.0 102.1 (1.9%) (1.4%) Adjusted EBITDA margin excluding distributions (as a % of Gross Billings) 16.4% ** ** 16.7% 18.4% (2.0 pp) (2.0 pp) % Change(1)Three Months Ended June 30,
  11. 11. Q2 2013 GROSS BILLINGS GROWTH ($ MILLIONS) 12 $18.9 US&APAC $3.7 EMEA ($7.2) Canada Consolidated: +2.9% growth; +3.1% in c.c.(3) US&APAC: +27.5% in c.c.(3) . EMEA: +3.4% in c.c.(3) . Canada: -2.2%(1) (1) Canada region variance includes $5.5 million in the three month period ended June 30, 2012 of compensation received from Air Canada in relation to transfer of the assets and obligations on pension benefits accrued by contact centre employees prior to 2009, who were transferred to Aeroplan in 2009. (2) Variance related to intercompany eliminations of $0.8 million has been excluded from the bridge. (3) Constant Currency excludes the translation effect of foreign operations on the consolidated results. For more information on Constant Currency, please refer to Aimia’s August 12, 2013 earnings press release. (2) (1)
  12. 12. Q2 2013 AEBITDA GROWTH ($ MILLIONS) 13 (1) Canada region variance includes $5.5 million in the three month period ended June 30, 2012 of compensation received from Air Canada in relation to transfer of the assets and obligations on pension benefits accrued by contact centre employees prior to 2009, who were transferred to Aeroplan in 2009. 2012 Reported 2013 Reported $102.1 $102.0 $26.6 VAT $3.9 EMEA ($5.7) US&APAC ($3.8) Canada ($24.8) Breakage ($3.2) Corporate costs $6.9 PLM (1)
  13. 13. YTD 2013 FINANCIAL HIGHLIGHTS – US & APAC 14 (1) Discrepancies in variances may arise due to rounding. (2) Before depreciation and amortization. (3) Constant Currency excludes the translation effect of foreign operations on the consolidated results. For more information on Constant Currency, please refer to Aimia’s August 12, 2013 earnings press release. ** information not meaningful Gross Billings growth reflects the impact of EIM, slightly offset by Qantas impact in the first quarter; ongoing investments included in Adjusted EBITDA ($ millions) Reported 2013 Reported 2012 Year Over Year Constant Currency (3) Gross Billings 165.1 146.6 12.6% 12.0% Total revenue 168.5 147.7 14.1% 13.5% Gross margin (2) 76.0 69.5 9.4% 8.5% Gross margin (%) 45.1% 47.1% (2.0 pp) (2.1 pp) Operating income (loss) (11.9) (1.8) ** ** Adjusted EBITDA (9.9) 1.4 ** ** Adjusted EBITDA margin (as a % of Gross Billings) (6.0%) 0.9% ** ** Six Months Ended June 30, % Change(1)
  14. 14. YTD 2013 FINANCIAL HIGHLIGHTS - EMEA 15 (1) Discrepancies in variances may arise due to rounding. Year over year change has been calculated excluding the VAT impact, recorded in six months ended June 30, 2013 (2) Before depreciation and amortization. (3) Constant Currency excludes the translation effect of foreign operations on the consolidated results. For more information on Constant Currency, please refer to Aimia’s August 12, 2013 earnings press release. ** information not meaningful More moderate Q2 EMEA growth with I2C impact and cycling contract terms effective from Q2 2012 Underlying Adjusted EBITDA +$20 million driven by higher volumes and Q1 promotional funding ($ millions) Exluding VAT 2013 VAT Adjustment Reported 2013 Reported 2012 Year Over Year Constant Currency (3) Gross Billings 335.0 - 335.0 301.5 11.1% 11.9% Gross Billings from the sale of Loyalty Units 300.5 - 300.5 261.1 15.1% 15.8% Total revenue 281.2 - 281.2 242.8 15.8% 16.3% Gross margin (2) 92.7 72.8 165.5 71.6 29.5% 29.9% Gross margin (%) 33.0% ** 58.9% 29.5% 3.5 pp 3.4 pp Operating income (loss) 11.3 24.0 35.3 (8.3) ** ** Adjusted EBITDA 36.2 24.0 60.3 15.8 129.4% 130.6% Adjusted EBITDA margin (as a % of Gross Billings) 10.8% ** 18.0% 5.2% ** ** Six Months Ended June 30, % Change(1)
  15. 15. YTD 2013 FINANCIAL HIGHLIGHTS - CANADA 16 **information not meaningful (1) Discrepancies in variances may arise due to rounding. Year over year change has been calculated excluding the Breakage adjustment, recorded in six months ended June 30, 2013. (2) Gross Billings and Adjusted EBITDA for the six months ended June 30, 2012 includes $5.5 million of compensation received from Air Canada in relation to transfer of the assets and obligations on pension benefits accrued by contact centre employees prior to 2009, who were transferred to Aeroplan in 2009. (3) Before depreciation and amortization. . Gross Billings down 2.1% with continued Air Canada grid change impact; uncertainty around financial cards leading to lower accumulation Underlying margin down slightly to 30.2% as a result of redemption mix and lower margin proprietary loyalty volumes; breakage impact takes it to 26.3% ($ millions) Excluding Breakage Adj. 2013 Breakage Adjustment Reported 2013 Reported 2012 Year Over Year Gross Billings (2) Aeroplan 551.2 - 551.2 568.7 (3.1%) Proprietary Loyalty 121.8 - 121.8 114.7 6.2% Intercompany eliminations (41.0) - (41.0) (38.1) na 631.9 - 631.9 645.2 (2.1%) Total revenue Aeroplan 619.9 (663.6) (43.6) 606.4 2.2% Proprietary Loyalty 121.5 - 121.5 115.5 5.2% Intercompany eliminations (41.0) - (41.0) (38.1) na 700.5 (663.6) 36.9 683.8 2.4% Gross margin (3) Gross margin (%) 46.4% ** ** 48.4% (2.0 pp) Aeroplan 285.6 (663.6) (378.0) 284.8 0.3% Proprietary Loyalty 39.9 - 39.9 46.7 (14.7%) Intercompany eliminations (0.8) - (0.8) (0.9) na 324.7 (663.6) (338.9) 330.7 (1.8%) Operating income (loss) Aeroplan 165.9 (663.6) (497.6) 164.1 1.1% Proprietary Loyalty 3.2 - 3.2 5.9 (45.5%) 169.2 (663.6) (494.4) 170.0 (0.5%) Adjusted EBITDA (2) Adjusted EBITDA margin (as a % of Gross Billings) 30.2% ** 26.3% 31.6% (1.4 pp) Aeroplan 181.0 (24.8) 156.2 192.2 (5.8%) Proprietary Loyalty 10.0 - 10.0 11.6 (13.9%) 191.0 (24.8) 166.2 203.8 (6.3%) % Change(1)Six Months Ended June 30,
  16. 16. FREE CASH FLOW 17 Free Cash Flow (1) ($ millions) (1) Free Cash Flow before common and preferred dividends paid. (2) Calculated as: (Free Cash Flow before common and preferred dividends paid, less preferred dividends paid)/ weighted average common shares outstanding. Free Cash Flow/ Common Share (2) Free Cash Flow Dividends $16.6 $4.8 $33.3 $60.4 $92.5 $79.1 Free Cash Flow Dividends $56.6 $51.8 $43.8 $81.5 $74.2 $88.7 $0.30 $0.50 $0.43 YTD 2011 YTD 2012 YTD 2013 $0.44 $0.41 $0.50 Q2 2011 Q2 2012 Q2 2013 YTD 2011 YTD 2012 YTD 2013Q2 2011 Q2 2012 Q2 2013
  17. 17. 2013 OUTLOOK* 18 Key Financial Metric 2012 Actual Original Guidance (as provided on February 27, 2013) Revised 2013 Target Range Consolidated Outlook Gross Billings $2,243.0 million Growth of between 3% and 5% No change Adjusted EBITDA $402.6 million To approximate $425 million To approximate $375 million This update reflects:  A $50 million reduction which reflects the full year impact of the lower Breakage rate outlined on June 27, 2013  A $25 million reduction related to: timing of new business rollout in the US & APAC business, lower Canadian Gross Billings and marketing costs now expected to be advanced into second half of 2013 to promote the introduction of the Distinction program. Offset by:  A benefit of approximately $25 million from the outcome of the VAT ruling in the UK. Free Cash Flow before dividends paid $299.5 million Between $255 and $275 million No change Capital Expenditures $58 million To approximate $70 million No change Income Taxes Canadian income tax rate of 26.2% Current income tax rate is anticipated to approximate 27% in Canada. The Corporation expects no significant cash income taxes will be incurred in the rest of its foreign operations. While Aimia’s 2013 tax rate is expected to approximate 27% in Canada, Aimia does not expect to be required to pay any further cash tax installments in 2013 as a result of the realization of tax losses from the Breakage adjustment of $664 million. The Corporation expects no significant cash income tax will be incurred in the rest of its foreign operations. Business Segment Gross Billings Growth Outlook Canada $1,292.6 million Growth of between 1% and 3% At the lower end of the range of between 1% and 3% EMEA $639.9 million Growth of between 5% and 7% No change US & APAC $315.2 million Above 5% No change * Please refer to the August 12, 2013 Earnings Press Release for a description of the assumptions made and risks related to the 2013 forecasts. As disclosed in the press release of August 12, 2013, updating on our financial card agreement, Aimia is currently in ongoing active discussions with TD and CIBC about a broad framework that would see CIBC retain cards held by their existing banking customers. There can be no assurances that an agreement will be reached. Aimia does not expect a significant change in outlook for 2013 as a result of a deal but will provide additional disclosure if an arrangement is reached which results in any changes to outlook.
  18. 18. 2014 UPDATE * 19 FINANCIAL IMPLICATIONS RELATED TO PROGRAM CHANGES FINANCIAL IMPLICATIONS RELATED TO FINANCIAL CARD FRAMEWORK Approximately 6 percentage point reduction in Consolidated Adjusted EBITDA margin expected for 2014 to reflect: • Breakage rate adjustment • Investment in value proposition A more than 15% increase in selling price per mile under new financial card framework Elevated Redemption for flight rewards expected to drive free cash flow reduction $100 million upfront program contribution payable to Aimia Expected cash tax benefit related to loss carryback Marketing expense budgeted will be aimed at maximizing transfer of existing financial credit card holders to TD, with miles purchase commitment representing a value equivalent to the Gross Margin which would have been generated on approximately 65% of 2012 Gross Billings from CIBC in 2014 (and increasing to a value equivalent to over 90% in 2015 and 2016) protecting against downside transition risk * Please refer to Forward-Looking Statements on slide 2 of this presentation for a view of the assumptions related to forward-looking statements.
  19. 19. 20 20 A STRONGER LONGER TERM INVESTMENT THESIS * Please refer to Forward-Looking Statements on slide 2 of this presentation for a view of the assumptions related to forward-looking statements. The increased long term sustainability of the program aimed at driving consolidated free cash flow back to approximately $250 million by the end of 2015* and supporting continued dividends New financial card economics to help fund increased member engagement ; program changes expected to affect margin profile and deliver longer term growth Premium Canadian consumers are loyal to Aeroplan. By enhancing the value the program delivers to members and our largest partners - including Air Canada, we will extend our leadership of the Canadian loyalty industry We will be targeting Consolidated Gross Billings in excess of $2.6 billion in 2015* with an enhanced program delivered in partnership with a strong and committed card issuer ATTRACTIVE BUSINESS MODEL FOCUSED ON GROWTH OPPORTUNITIES SOLID FINANCIAL CHARACTERISTICS STRONG FREE CASH FLOW GENERATION
  20. 20. THANK YOU
  21. 21. APPENDIX
  22. 22. YTD 2013 CONSOLIDATED FINANCIAL HIGHLIGHTS 23 (1) Discrepancies in variances may arise due to rounding. Year over year change has been calculated excluding the VAT and Breakage adjustments recorded in six months ended June 30, 2013 (2) Reported results excluding the impact of VAT and Breakage adjustments recorded in the six months ended June 30, 2013. (3) Gross Billings and Adjusted EBITDA for the six months ended June 30, 2012 includes $5.5 million of compensation received from Air Canada in relation to transfer of the assets and obligations on pension benefits. (4) Before depreciation and amortization. (5) Includes amortization of Accumulation Partners’ contracts, customer relationships and technology. (6) Constant Currency excludes the translation effect of foreign operations on the consolidated results. For more information on Constant Currency, please refer to Aimia’s August 12, 2013 earnings press release. ** information not meaningful ($ millions) Exluding Noted Items(2) 2013 Breakage Adjustment VAT Impact Reported 2013 Reported 2012 Year Over Year Constant Currency (6) Gross Billings (3) 1,131.7 - - 1,131.7 1,090.9 3.7% 3.9% Gross Billings from sale of Loyalty Units 827.6 - - 827.6 800.0 3.4% 3.7% Total Revenue 1,149.8 (663.6) - 486.2 1,072.0 7.3% 7.3% Cost of rewards and direct costs 656.7 - (72.8) 583.9 602.3 9.0% 9.2% Gross margin (4) 493.0 (663.6) 72.8 (97.7) 469.7 5.0% 4.9% Gross margin (%) 42.9% ** ** (20.1%) 43.8% (0.9 pp) (1.0 pp) Depreciation and amortization(5) 61.2 - - 61.2 58.6 4.5% 4.5% Operating expenses 302.7 - 48.8 351.5 281.8 7.4% 7.4% Operating income (loss) 129.1 (663.6) 24.0 (510.5) 129.3 (0.2%) (0.3%) Net financial income (costs) (17.6) - 16.2 (1.4) (18.4) ** ** Share of net earnings (loss) of equity accounted investments (3.6) - - (3.6) 2.7 ** ** Net earnings (loss) 74.1 (483.8) 40.2 (369.5) 79.7 ** ** Adjusted EBITDA (3) 184.8 (24.8) 24.0 184.0 190.3 (2.9%) (2.8%) Adjusted EBITDA margin excluding distributions (as a % of Gross Billings) 15.7% ** ** 15.7% 17.4% (1.7 pp) (1.7 pp) Six Months Ended June 30, % Change(1)
  23. 23. BALANCE SHEET AT JUNE 30, 2013 IMPACT OF BREAKAGE AND VAT ADJUSTMENTS 24 ($ millions) Excluding Noted Items 2013 Breakage Adjustment VAT Impact Reported 2013 ASSETS Accounts receivable 390.2 - (67.7) 322.5 Income taxes receivable - 111.5 - 111.5 Total Assets 5,238.8 111.5 (67.7) 5,282.6 LIABILITIES & EQUITY Accounts payable and accrued liabilities 336.6 - 50.5 387.1 Income taxes payable 23.9 (23.9) - - Provisions 161.7 - (161.7) - Deferred revenue 2,236.1 663.6 - 2,899.7 Deferred income taxes 213.2 (44.4) - 168.8 Total Liabilities 3,890.1 595.3 (111.2) 4,374.2 Total Equity 1,348.7 (483.8) 43.5 908.4 Note: The difference between the net earnings impact of the VAT adjustment and net equity adjustment is related to foreign currency translation rates applied to the adjustments in the income statement and balance sheet.
  24. 24. A BALANCE SHEET TO SUPPORT TRANSITION AVAILABLE CASH $ millions June 30, 2013 Cash and cash equivalents 499.4 Restricted cash 30.6 Short-term investments 23.1 Long-term investments in bonds 311.9 Cash and Investments 865.0 Aeroplan reserves (300.0) Other loyalty programs reserves (148.8) Restricted cash ( 30.6) Available cash 385.6 DEBT $ millions Annual Interest Rate Maturing June 30, 2013 Revolving Facility(1) Apr. 23, 2016 - Senior Secured Notes 2 7.9% Sept. 2, 2014 150.0 Senior Secured Notes 3 6.95% Jan. 26, 2017 200.0 Senior Secured Notes 4 5.6% May 17, 2019 250.0 Senior Secured Notes 5 4.35% Jan. 22, 2018 200.0 Long Term Debt 800.0 (1) As of June 30, 2013, Aimia held a $300 million revolving credit facility which comes to term on April 23, 2016. Interest rates on this facility are tied to the Corporation’s credit ratings and range between Canadian prime rate plus 0.20% to 1.50% and Bankers’ Acceptance and LIBOR rates plus 1.20% to 2.50%. As of June 30, 2013, Aimia had issued irrevocable letters of credit in the aggregate amount of $20 million. This amount reduces the available credit under the revolving facility. 25
  25. 25. YTD 2013 GROSS BILLINGS GROWTH ($ MILLIONS) 26 (1) Canada region variance includes $5.5 million in the six month period ended June 30, 2012 of compensation received from Air Canada in relation to transfer of the assets and obligations on pension benefits accrued by contact centre employees prior to 2009, who were transferred to Aeroplan in 2009. (2) Variance related to intercompany eliminations of $2.0 million has been excluded from the bridge. (3) Constant Currency excludes the translation effect of foreign operations on the consolidated results. For more information on Constant Currency, please refer to Aimia’s August 12, 2013 earnings press release. 2012 Reported 2013 Reported $1,090.9 • $1,131.7 US&APAC $18.5$33.6 EMEA ($13.3) Canada (2) Consolidated: +3.7% growth; +3.9% in c.c.(3) EMEA: +11.9% in c.c.(3) . US&APAC: +12.0% in c.c.(3) . Canada: -2.1%(1) (1)
  26. 26. YTD 2013 AEBITDA GROWTH ($ MILLIONS) 27 (1) Canada region variance includes $5.5 million in the six month period ended June 30, 2012 of compensation received from Air Canada in relation to transfer of the assets and obligations on pension benefits. 2012 Reported 2013 Reported $190.3 $184.0 $24.0 VAT Breakage ($24.8) $20.4 EMEA ($11.2) US&APAC ($12.8) (1) Canada ($8.8) Corporate $6.9 PLM
  27. 27. BRIDGING AEBITDA TO FREE CASH FLOW ($ MILLIONS) 28 Q2 2012: $102.1 $3.8 $31.3 -- -- ($26.4) ($6.2) ($19.1) ($11.3) $74.2 Q2 2013 $102.0 $88.7 Adjusted EBITDA Stock Based Compensation Change in FRC ex Items Breakage VAT Working Capital and Other Net Cash Interest Cash Taxes Capital Expenditures Free Cash Flow ex Dividends ($11.3) $3.8 ($26.6) $22.4 ($1.5) ($7.7) ($17.2) $24.8
  28. 28. Q2 2013 FINANCIAL HIGHLIGHTS – US & APAC 29 (1) Discrepancies in variances may arise due to rounding. (2) Before depreciation and amortization. (3) Constant Currency excludes the translation effect of foreign operations on the consolidated results. For more information on Constant Currency, please refer to Aimia’s August 12, 2013 earnings press release. ** information not meaningful ($ millions) Reported 2013 Reported 2012 Year Over Year Constant Currency (3) Gross Billings 84.5 65.6 28.7% 27.5% Total revenue 87.7 68.4 28.3% 27.1% Gross margin (2) 39.5 34.2 15.6% 14.3% Gross margin (%) 45.0% 49.9% (4.9 pp) (5.0 pp) Operating income (loss) (5.7) 0.1 ** ** Adjusted EBITDA (6.2) (0.5) ** ** Adjusted EBITDA margin (as a % of Gross Billings) (7.3%) (0.7%) (6.6 pp) (6.7 pp) Three Months Ended June 30, % Change(1) Q2 2013 Gross Billings growth reflects impact of EIM acquisition as well as some growth across the rest of the business. Adjusted EBITDA impacted by EIM integration and further investment in the business
  29. 29. Q2 2013 FINANCIAL HIGHLIGHTS - EMEA 30 (1) Discrepancies in variances may arise due to rounding. Year over year change has been calculated excluding the VAT impact, recorded in three months ended June 30, 2013 (2) Before depreciation and amortization. (3) Constant Currency excludes the translation effect of foreign operations on the consolidated results. For more information on Constant Currency, please refer to Aimia’s August 12, 2013 earnings press release. ** information not meaningful Gross Billings growth during the quarter driven by Nectar UK and Air Miles Middle East Adjusted EBITDA +$3.9 million excluding the VAT impact, driven by improved operating leverage and redemption mix ($ millions) Exluding VAT 2013 VAT Adjustment Reported 2013 Reported 2012 Year Over Year Constant Currency (3) Gross Billings 161.3 - 161.3 157.6 2.3% 3.4% Gross Billings from the sale of Loyalty Units 143.7 - 143.7 136.8 5.1% 6.0% Total revenue 123.8 - 123.8 125.8 (1.6%) (0.7%) Gross margin (2) 39.6 74.9 114.5 38.6 2.6% 4.1% Gross margin (%) 32.0% ** 92.5% 30.7% 1.3 pp 1.5 pp Operating income (loss) 1.5 26.1 27.6 (1.8) ** ** Adjusted EBITDA 16.1 26.6 42.7 12.3 31.3% 35.1% Adjusted EBITDA margin (as a % of Gross Billings) 10.0% ** 26.5% 7.8% 2.2 pp 2.4 pp Three Months Ended June 30, % Change(1)
  30. 30. Q2 2013 FINANCIAL HIGHLIGHTS - CANADA 31 Growth in Gross Billings from the Proprietary Loyalty business were offset by softness in Aeroplan business Solid margins despite lower Gross Billings (1) Discrepancies in variances may arise due to rounding. Year over year change has been calculated excluding the Breakage adjustment, recorded in the three months ended June 30, 2013 (2) Gross Billings and Adjusted EBITDA for the three months ended June 30, 2012 includes $5.5 million of compensation received from Air Canada in relation to transfer of the assets and obligations on pension benefits. (3) Before depreciation and amortization. . **information not meaningful ($ millions) Excluding Breakage Adj. 2013 Breakage Adjustment Reported 2013 Reported 2012 Year Over Year Gross Billings (2) Aeroplan 282.5 - 282.5 295.0 (4.2%) Proprietary Loyalty 63.6 - 63.6 56.1 13.2% Intercompany eliminations (21.3) - (21.3) (19.2) na 324.8 - 324.8 332.0 (2.2%) Total revenue Aeroplan 287.1 (663.6) (376.5) 274.0 4.8% Proprietary Loyalty 63.0 - 63.0 56.2 12.1% Intercompany eliminations (21.3) - (21.3) (19.2) na 328.8 (663.6) (334.8) 311.0 5.7% Gross margin (3) Gross margin (%) 47.4% ** ** 49.0% (1.6 pp) Aeroplan 136.9 (663.6) (526.6) 130.4 5.0% Proprietary Loyalty 19.3 - 19.3 22.4 (14.0%) Intercompany eliminations (0.4) - (0.4) (0.5) na 155.8 (663.6) (507.8) 152.4 2.3% Operating income (loss) Aeroplan 76.8 (663.6) (586.8) 70.4 9.0% Proprietary Loyalty 1.7 - 1.7 1.6 7.3% 78.5 (663.6) (585.1) 72.0 9.0% Adjusted EBITDA (2) Adjusted EBITDA margin (as a % of Gross Billings) 31.6% ** 24.0% 32.1% (0.5 pp) Aeroplan 97.0 (24.8) 72.3 101.7 (4.6%) Proprietary Loyalty 5.7 - 5.7 4.7 19.8% 102.7 (24.8) 77.9 106.5 (3.5%) % Change(1)Three Months Ended June 30,
  31. 31. AEROPLAN REVENUE BREAKDOWN 32 Three Months Ended June 30, (in $ millions) 2013 2012 Change % Change Miles revenue 225.9 215.0 10.9 5.1 % Breakage revenue (614.4) 46.7 (661.1) ***** Other 12.0 12.3 (0.3) (2.4%) Total Revenue (376.5) 274.0 650.5 ***** **information not meaningful
  32. 32. AEROPLAN KEY METRICS 33 Average Selling Price & Cost (cents / mile) Aeroplan Miles Issued & Redeemed (billions) 17.5 22.7 18.3 21.7 Aeroplan Miles Redeemed Aeroplan Miles Issued Q2 2012 Q2 2013 1.22 0.82 1.24 0.82 Average Selling Price Average Cost/ Aeroplan Mile Redeemed Q2 2012 Q2 2013
  33. 33. GROSS BILLINGS FROM SALE OF LOYALTY UNITS BY MAJOR PARTNER 34 Q2 2013 Gross Billings from sale of Loyalty Units Q2 2012 Gross Billings from sale of Loyalty Units $414.2M $414.0M Partner A Partner B Partner C Air Canada Other 33.7% 17.2%10.2% 14.1% 24.8% 22.8% 34.4% 16.9%10.7% 15.2%
  34. 34. FOREIGN EXCHANGE RATES 35 Period Rates Q2 2013 Q2 2012 Change % Change Period end rate £ to $ 1.5992 1.6002 (0.0010) (0.1%) Average quarter £ to $ 1.5710 1.5983 (0.0273) (1.7%) Average YTD £ to $ 1.5679 1.5858 (0.0179) (1.1%) Period end rate AED to $ 0.2862 0.2789 0.0073 2.6% Average quarter AED to $ 0.2785 0.2749 0.0036 1.3% Average YTD AED to $ 0.2764 0.2738 0.0026 0.9% Period end rate USD to $ 1.0515 1.0248 0.0267 2.6% Average quarter USD to $ 1.0231 1.0098 0.0133 1.3% Average YTD USD to $ 1.0155 1.0059 0.0096 1.0% Period end rate € to $ 1.3677 1.2889 0.0788 6.1% Average quarter € to $ 1.3357 1.2969 0.0388 3.0% Average YTD € to $ 1.3332 1.3049 0.0283 2.2%

×