Q1 Consolidated Adjusted EBITDA at
$62.0 million and Free Cash Flow at
$25.1 million
Reaffirms 2018 Guidance
Aimia launches the Aeroplan promise
MONTREAL, April 26, 2018 /CNW Telbec/ - Data-driven
marketing and loyalty analytics company Aimia Inc. (TSX: AIM) today
reported its financial results for the quarter ended March 31, 2018.
This quarterly earnings release should be read in conjunction
with the consolidated financial statements and the MD&A which
can be accessed on SEDAR as well as at:
https://www.aimia.com/investors/quarterly-reports/
"With the launch of the Aeroplan promise, we are setting out the
fundamentals of where the design of the program is going. Members
are already seeing us enhance a strong value proposition and
experience, as we add new opportunities to earn with retailers like
Amazon and renew existing ones like Home Hardware. There will
be more to come," said David
Johnston, Group Chief Executive.
"We are pleased to be delivering the significant improvements in
our operational performance and balance sheet flexibility which we
set as clear priorities last year."
Q1 highlights – Continuing operations, with variances on a
like-for-like basis:(1)(2)
- Consolidated Gross Billings broadly stable at $358.1 million
- Adjusted EBITDA margin up and Gross Billings stable in the
Coalitions division, driven by Aeroplan
- Consolidated Adjusted EBITDA margin up by 620 bps to 17.3% as
the company continues to improve profitability; Adjusted EBITDA at
$62.0 million
- Achieved a 16% reduction in Consolidated operating expenses in
the quarter; on track to achieve $70
million cost savings target in 2019
- Changed cash generation profile with Q1 Consolidated Free Cash
Flow at $25.1 million
Q1 highlights – GAAP basis:
- Consolidated Total Revenue broadly stable at $406.0 million
- Net earnings at $21.4 million, up
by $11.8 million
- Q1 Cash from Operating Activities at $43.8 million, up by $55.5
million
Strategic highlights:
- New Aeroplan promise launched to members, setting out
commitments around a broader travel offering and enhanced member
experience; additional opportunities to earn with Amazon from
April
- 2018 guidance reaffirmed
Consolidated
Financial Highlights(1)
|
|
HIGHLIGHTS
(1)(3)
|
Three Months Ended
March 31,
|
(in millions of
Canadian dollars,
except per share amounts)
|
2018
|
2017
|
YoY %
Change
|
YoY % Constant
Currency (C.C.)
|
Gross Billings -
Continuing operations
|
358.1
|
394.6
|
(9.2)
|
(9.1)
|
Total
Revenue
|
406.0
|
402.4
|
0.9
|
1.0
|
Operating
income
|
12.7
|
0.6
|
**
|
**
|
Adjusted
EBITDA
|
62.0
|
43.5
|
42.5
|
43.9
|
ROIC(4)
|
7.2%
|
5.1%
|
2.1
pp
|
**
|
Net
Earnings(5)(6)
|
21.4
|
9.6
|
**
|
**
|
Earnings (loss) per
Common Share - Continuing operations(5)
|
0.06
|
(0.01)
|
**
|
**
|
Earnings per Common
Share - Discontinued operations(6)
|
0.05
|
0.05
|
-
|
**
|
Adjusted Net Earnings
per Common Share - Continuing operations(5)
|
0.25
|
0.13
|
92.3
|
**
|
Adjusted Net Earnings
per Common Share - Discontinued operations(6)
|
0.05
|
0.09
|
(50.0)
|
**
|
Cash from Operating
Activities(7)
|
43.8
|
(11.7)
|
**
|
**
|
Free Cash Flow before
Dividends Paid(7)
|
40.4
|
(23.8)
|
**
|
**
|
Free Cash Flow before
Dividends Paid per Common Share(7)
|
0.27
|
(0.18)
|
**
|
**
|
|
** Information not
meaningful
|
|
Please refer to
"Notes" for details on notations that appear on tables in this
Press Release.
|
Progress on key priorities
Aeroplan program update
Aeroplan will begin communicating its plans to differentiate and
diversify its member offering with broader choices around travel
and leisure with an overall enhanced user experience, as part of
its Aeroplan promise marketing campaign in market beginning
April 27th. A separate
release outlines the six brand commitments being made to members,
which include the freedom to book flight rewards on more airlines
to more of their favourite destinations starting in 2020, as well
as opportunities to earn more miles with more retail partners and
select from a bigger pool of accommodations, destination activities
and vacation packages starting in 2018.
The company continues to engage with various parties to secure
new long-term commercial and strategic relationships which will
underpin its transformation. Amazon.ca was announced as a new
retailer in the program as of April 24,
2018, while our existing relationships with Home Hardware
and RocketMiles were renewed since the beginning of 2018.
Aeroplan miles issued in the quarter were down 2.8%, reflecting
lower promotional miles on financial cards and decreases in the air
and retail accumulation. Excluding promotional miles, miles
issued were broadly stable at (0.8%).
Existing members continue to accumulate and re-engage post
redemption at similar rates to the same quarter last
year. Members redeemed for 0.6 million flight rewards, up
5.2%, while total rewards issued were up 8.6% to 0.7 million.
On a trailing twelve-month basis to March
31, 2018, miles redeemed are up 6.5%. A 9.6% increase in the
quarter reflects both the comparative for the period prior to the
Air Canada non-renewal announcement in May
2017 and higher availability and capacity on certain
airlines in the quarter. Redemption expense, was up approximately
$20 million on higher volumes and a
broadly stable unit cost due to redemption mix.
Ongoing business simplification and acceleration of cost
savings
Reflecting both divestitures and simplification in the
continuing operations, total operating expenses in the quarter were
down by 33.0%. Total headcount was down by around 40% year over
year to 1,650 at March 31, 2018.
On a like for like basis, operating expenses in the quarter were
down by 15.7% to $92.1 million.
In the quarter, the company completed the sale of its Nectar
business and related assets, which are treated as discontinued
operations in the quarter. The company continues to explore exiting
businesses which will not provide meaningful long term
contributions.
Preserving strong cash and liquidity position
Cash and investments in bonds at March
31, 2018, was $559.7
million. Total debt levels (including drawn letters of
credit) of $358 million at
March 31, 2018, are expected to
decrease to approximately $340
million during the second quarter, with approximately
$20 million of the cash generated in
the first quarter expected to be used to reduce the drawn amount on
the company's credit facility.
Operational performance
Gross Billings broadly stable on a like-for-like
basis
Gross Billings were down $37
million to $358 million in the
quarter, with $31 million of the
decline attributable to disposals of non-core assets. On a constant
currency basis, Gross Billings were down 9.1%.
On a like for like basis, Gross Billings across the two main
divisions operated by Aimia at March 31,
2018, Coalitions and Insights and Loyalty
Solutions, were down 1.4% and 1.2% on a constant currency
basis.
- Coalitions Gross Billings were stable at $316.8 million. Within this, Aeroplan Loyalty
Unit Gross Billings were broadly stable at $299 million. A conversion campaign from a
financial card partner offset lower Gross Billings from other
partners, due primarily to changed product mix in the airlines
sector. Loyalty Services Gross Billings were up by 9.9%.
- Insights and Loyalty Solutions Gross Billings were down
12.8% (or 11.5% million on a constant currency basis) to
$41.6 million. Gross Billings from
Loyalty Units were down 1.8% on a constant currency basis due to
challenging local market dynamics in the Middle East, while lower Gross Billings from
Loyalty Services were mainly due to the end of client contract in
the ISS International business from April
2017. Recurring loyalty platforms and related services
billings now account for around 20% of Gross Billings.
Aeroplan contribution driving increased margin
- Consolidated Adjusted EBITDA was $62.0
million or 17.3% of Gross Billings, including a
restructuring expense of $1.0 million
in the quarter. Adjusted EBITDA was $40.3
million or 11.1% of Gross Billings on a like-for-like basis
last year and included $0.5 million
of restructuring expense. Share-based compensation accounted for
$6.2 million of the improvement in
the quarter.
- The improvement in profitability was mainly driven by
operational efficiencies in the Coalitions division, where Adjusted
EBITDA was $69.6 million (or 22.0% of
Gross Billings) including $0.8
million of restructuring expense.
Positive cash quarter with Continuing operations Free Cash
Flow at $25.1 million
- Cash from operating activities was $43.8
million, an improvement of $55.5
million from Q1 2017 mainly explained by a $73.9 million increase from discontinued
operations. A $18.4 million decrease
in continuing operations mainly reflects the impact of disposals
made during 2017 which had a seasonally strong first quarter cash
flow. There was also a rent prepayment of $11.8 million made in the UK in the
quarter.
- Consolidated Free Cash Flow from Continuing operations was
$25.1 million. Capital expenditures
from continuing operations were down $7.2
million to $3.4 million, with
$0.1 million incurred in the
Coalitions divisions due to a $2.7
million credit related to the sale of technology assets.
Free Cash Flow per Common Share from continuing operations was
$0.16.
- Total dividends paid were down $34.7
million, due to the suspension of dividends with effect from
June 14, 2017.
Return on Invested Capital(3)
For the 12 months ended March 31,
2018, ROIC was 7.2%, compared to 5.1% for the 12 months
ended March 31, 2017. An increase in
adjusted operating income after taxes and a decrease in Invested
Capital both contributed to the increase in ROIC.
2018 Guidance
The company's guidance for the year ending December 31, 2018, provided in February 2018, remains unchanged:
- Coalitions Gross Billings: around $1.3
billion
- Coalitions Adjusted EBITDA margin: around 18%
- Coalitions Free Cash Flow (on a pre-tax basis): between
$155 million and $175 million
- Consolidated Free Cash Flow before Dividends Paid (on a pre-tax
basis): between $120 million and
$145 million
The above guidance is based on current expectations around
redemption expense at Aeroplan and is on an IFRS 15
basis.
The guidance excludes the impact of taxes and restructuring.
Further to the utilization of prior tax loss carry forwards, the
company expects to pay cash taxes in 2018. Cash taxes could
be in a range of between $35 million
and $40 million based on current
expectations around profitability, mainly against profit generated
in the Coalitions business. Restructuring expenses of around
$10 million are also excluded from
the guidance.
See "Forward-Looking Statements" below regarding assumptions
underlying the above guidance and risks related
thereto.
Dividends
Based on restrictions currently in place under the Canada
Business Corporations Act and the company's credit facility
agreement, as amended, the company believes that it will not be in
a position to declare or pay dividends in 2018. However, it will
continue to assess its ability to declare and pay dividends on its
outstanding preferred shares on a quarterly basis.
IFRS 15
Q1 2018 marks the first quarter in
which the company has adopted IFRS 15 in respect of its revenue
recognition accounting, with net accounting treatment applied to
the following Gross Billings and Revenue streams:
- Rewards fulfilment Gross Billings and Revenue accounted
for in Loyalty Services in the ILS and Coalitions divisions.
- Air Miles Middle East loyalty
revenue accounted for under Revenue from Loyalty Units in the
ILS division
Aeroplan results accounted for as Gross Billings and Revenue
from Loyalty Units within the Coalitions division were unaffected
by the change in accounting treatment.
As detailed in the presentation published in conjunction with
today's release on the company's website at
https://www.aimia.com/investors/presentations/ 2017 comparatives
for Gross Billings, Revenue, Cost of Rewards and Adjusted EBITDA
also reflect this new accounting treatment. The net reduction to
Gross Billings was $36.0 million in
the first quarter of 2017 with the net reduction to revenue and
cost of rewards of $45.6 million. The
changes mainly affect the Insights and Loyalty Solutions division.
Quarterly Conference Call and Audio Webcast
Information
Aimia will host a conference call to discuss its first quarter
2018 financial results at 8:30 a.m. EST on
Friday, April 27, 2018. The call will be webcast at:
https://event.on24.com/wcc/r/1650796/E9A49323071467949AA6C0DAD1C21D08
Analysts intending to ask questions can dial into the call at
1-888-231-8191 (647-427-7450 for the Toronto area).
A slide presentation intended for simultaneous viewing with the
conference call will be available the evening of April 26, 2018 at:
https://www.aimia.com/investors/presentations/ and an archived
audio webcast will be available at:
https://www.aimia.com/investors/events/ for 90 days following
the original broadcast.
Annual General Meeting
The Annual General Meeting of Shareholders will follow at
10:30 a.m. EST on Friday, April 27,
2018. Media and interested participants may access this event on a
listen-only basis at the following webcast link:
http://event.on24.com/r.htm?e=1552787&s=1&k=07252EC831566AD9C5BE23AA380D4A84
This quarterly earnings release was reviewed by Aimia's Audit
Committee and was approved by the company's Board of Directors, on
the Audit Committee's recommendation, prior to its
release.
Notes
- Non-GAAP financial measures (Adjusted EBITDA, ROIC, Adjusted
Net Earnings per common share, Free Cash Flow before Dividends Paid
and Free Cash Flow before Dividends Paid per Common Share) and
constant currency are explained in the section entitled "Non-GAAP
Financial Measures".
- Continuing operations refers to consolidated results (i.e.
excluding discontinued operations). Like-for-like variances
are calculated on the basis of 2017 consolidated results excluding
"Other Businesses", as set out in the table below.
- Total Revenue, Operating Income, Adjusted EBITDA and ROIC
relate to continuing operations. Cash from operating activities,
Free Cash Flow before Dividends Paid and Free Cash Flow before
Dividends Paid per Common Share include cash flow from continuing
and discontinued operations. Earnings (loss) per Common Share and
Adjusted Net Earnings per common share are presented for continuing
and discontinued operations.
- ROIC for the twelve-month period ended March 31, 2018 includes the unfavourable impact
of the onerous contract provision of $14.9
million, net of an income tax recovery of $5.4 million, calculated on the basis of the
Canadian statutory tax rate in effect during the period.
- Net Earnings, Earnings from continuing operations per Common
Share and Adjusted Net Earnings from continuing operations per
Common Share for the three months ended March 31, 2018 include the unfavourable impact of
the reversal of the contingent consideration receivable related to
the sale of the Canadian Air Miles trademarks of $5.3 million.
- Net Earnings, Earnings from discontinued operations per Common
Share and Adjusted Net Earnings from discontinued operations per
Common Share for the three months ended March 31, 2018 include the impact of the gain of
$5.4 million on the disposal of the
Nectar Program and related assets.
- Cash from Operating Activities, Free Cash Flow before Dividends
Paid and Free Cash Flow before Dividends Paid per Common Share for
the three months ended March 31, 2018 include a rent
prepayment of $11.8 million related
to a London office space. The
prepayment covers the period from February
2018 to December 2019.
Appendix
The table below for the three months ending March 31, 2018, sets out key financial metrics
and reconciliations along with year-on-year variances on the basis
of the Consolidated results excluding the 2017 results of "Other
Businesses" as defined in the company's MD&A:
|
Three Months Ended
March 31,
|
|
|
Coaltions
|
ILS
|
Consolidated
|
|
|
2018
|
2017
|
2018
|
2017
|
2018
|
2017
|
2017
(excl. Other
Businesses)(1)
|
YoY
%
|
YoY %
(excl. Other
Businesses)(1)
|
Gross
Billings
|
316.8
|
315.8
|
41.6
|
47.7
|
358.1
|
394.6
|
363.2
|
-9.2%
|
-1.4%
|
Total
revenue
|
370.9
|
331.4
|
35.4
|
41.9
|
406.0
|
402.4
|
373.0
|
0.9%
|
8.8%
|
Cost of rewards and
direct costs
|
243.0
|
223.1
|
4.0
|
6.7
|
246.7
|
229.6
|
229.6
|
7.4%
|
7.4%
|
Total operating
expenses
|
54.1
|
67.8
|
38.0
|
41.6
|
92.1
|
137.5
|
109.3
|
-33.0%
|
-15.7%
|
Total operating
expenses before restructuring
|
53.3
|
67.7
|
37.8
|
41.2
|
91.1
|
136.8
|
108.8
|
-33.4%
|
-16.3%
|
Adjusted
EBITDA
|
69.6
|
47.8
|
-7.6
|
-7.5
|
62.0
|
43.5
|
40.3
|
42.5%
|
53.8%
|
Adjusted EBITDA
margin %
|
22.0%
|
15.1%
|
-18.3%
|
-15.7%
|
17.3%
|
11.0%
|
11.1%
|
630
bps
|
620
bps
|
Adjusted EBITDA
before restructuring
|
70.4
|
47.9
|
-7.4
|
-7.1
|
63.0
|
44.2
|
40.8
|
42.5%
|
54.4%
|
Adjusted EBITDA
margin % (before restructuring)
|
22.2%
|
15.2%
|
-17.8%
|
-14.9%
|
17.6%
|
11.2%
|
11.2%
|
640 bps
|
640 bps
|
Included in Adjusted
EBITDA:
|
|
|
|
|
|
|
|
|
|
|
Change in Future
Redemption Costs
|
45.5
|
18.4
|
1.1
|
1.9
|
46.6
|
20.3
|
20.3
|
**
|
**
|
|
Cost of rewards
recorded against deferred revenue
|
-
|
-
|
-8.3
|
-9.6
|
-8.3
|
-9.6
|
-9.6
|
-13.5%
|
-13.5%
|
|
Distributions from
equity-accounted investments
|
4.4
|
4.5
|
-
|
0.8
|
4.4
|
5.3
|
5.3
|
-17.0%
|
-17.0%
|
Free Cash Flow
before Dividends Paid
|
|
|
|
|
25.1
|
36.3
|
23.3
|
-30.9%
|
7.7%
|
Free Cash Flow before
Dividends Paid (before restructuring and taxes)
|
|
|
|
|
29.3
|
42.9
|
28.0
|
-31.7%
|
4.6%
|
|
|
|
|
|
|
|
|
|
|
Restructuring
expenses - divisional structure
|
0.8
|
0.1
|
0.2
|
0.4
|
1.0
|
0.7
|
0.5
|
**
|
**
|
Restructuring
payments - divisional structure
|
|
|
|
|
4.2
|
3.2
|
1.9
|
**
|
**
|
Taxes paid
|
|
|
|
|
0.0
|
3.4
|
2.8
|
**
|
**
|
|
|
|
|
|
|
|
|
|
|
|
** means not
meaningful
|
|
|
|
|
|
|
|
|
|
(1) Consolidated
results less Other Businesses. Other Businesses include the results
of the U.S. Channel and Employee Loyalty ("CEL") business, the New
Zealand business and the royalty revenue related to the Canadian
Air Miles trademarks, until their respective disposals.
|
About Aimia
Aimia Inc.'s (TSX:AIM) data-driven marketing and loyalty
analytics provides clients with the customer insights they need to
make smarter business decisions and build relevant, rewarding and
long-term one-to-one relationships, evolving the value exchange to
the mutual benefit of both our clients and consumers.
Aimia partners with groups of companies and individual companies
to help generate, collect and analyze customer data and build
actionable insights.
Our businesses include Aeroplan in Canada and Air Miles Middle East. The
provision of loyalty strategy, program development, implementation
and management services for other clients are underpinned by
leading products and technology platforms such as the Aimia Loyalty
Platform – Enterprise and Aimia Loyalty Platform – SaaS, and
through our analytics and insights business, including Intelligent
Shopper Solutions. In other markets, we own stakes in loyalty
programs, such as Club Premier in Mexico and Think Big, a partnership with Air
Asia and Tune Group. Our clients are diverse, and we have
industry-leading expertise in the fast-moving consumer goods,
retail, financial services, and travel and airline industries
globally to deliver against their unique needs.
For more information about Aimia, visit www.aimia.com.
Non-GAAP Financial Measures
Aimia uses the following non-GAAP financial measures which it
believes provides investors and analysts with additional
information to better understand results as well as assess its
potential. GAAP means generally accepted accounting principles in
Canada and represents
International Financial Reporting Standards ("IFRS"). Please
refer to the MD&A on pages 7 to 11 for a complete definition on
all non-GAAP financial measures and page 18 for a reconciliation of
non-GAAP financial measures to GAAP.
Adjusted EBITDA
Adjusted EBITDA is not a measurement based on GAAP, is not
considered an alternative to operating income or net earnings in
measuring performance, and is not comparable to similar measures
used by other issuers. We do not believe that Adjusted EBITDA has
an appropriate directly comparable GAAP measure. As an alternative,
we do however provide a reconciliation to operating income on page
18 of the Management Discussion & Analysis (MD&A) for the
three months ended March 31, 2018.
Adjusted EBITDA is used by management to evaluate performance, and
to measure compliance with debt covenants. Management believes
Adjusted EBITDA assists investors in comparing the company's
performance on a consistent basis without regard to depreciation
and amortization and impairment charges related to non-financial
assets, which are non-cash in nature and can vary significantly
depending on accounting methods and non-operating factors such as
historical cost. Unless otherwise noted, Adjusted EBITDA for the
current and comparable periods exclude the results of discontinued
operations.
Adjusted EBITDA is operating income adjusted to exclude
depreciation, amortization and impairment charges related to
non-financial assets, as well as adjusted for certain factors
particular to the business, such as changes in deferred revenue and
Future Redemption Costs. Adjusted EBITDA also includes
distributions and dividends received or receivable from
equity-accounted investments. Adjusted EBITDA should not be used as
an exclusive measure of cash flow because it does not account for
the impact of working capital growth, capital expenditures, debt
repayments and other sources and uses of cash, which are disclosed
in the statements of cash flows.
Return on Invested Capital
Return on invested capital ("ROIC") is not a measurement
based on GAAP and is not comparable to similar measures used by
other issuers. ROIC is used by management to assess the efficiency
with which it allocates its capital to generate returns.
ROIC is calculated as adjusted operating income after taxes
expressed as a percentage of the average invested capital. Adjusted
operating income after taxes and invested capital exclude the
effect of discontinued operations. Adjusted operating income after
taxes is Adjusted EBITDA less depreciation and amortization, tax
effected at the Canadian statutory rate, on a rolling twelve-month
basis. A description of Adjusted EBITDA as well as its
reconciliation to operating income is presented in the preceding
section. Invested capital is the sum of net equity (calculated as
total equity less net assets of discontinued operations), deferred
revenue margin related to continuing operations (calculated as
deferred revenue less future redemption cost liability, tax
effected at the Canadian statutory rate), accumulated
amortization of Accumulation Partners' contracts and customer
relationships related to continuing operations, and net debt
(calculated as long-term debt, including the current portion, less
cash and cash equivalents), averaged between the beginning and
ending balance over a rolling twelve-month period.
Adjusted Net Earnings
Adjusted Net Earnings is not a measurement based on GAAP, is
not considered an alternative to net earnings in measuring
profitability, and is not comparable to similar measures used by
other issuers.
Adjusted Net Earnings provides a measurement of profitability
calculated on a basis consistent with Adjusted EBITDA. Net earnings
attributable to equity holders of the company are adjusted to
exclude Amortization of Accumulation Partners' contracts, customer
relationships and technology, share of net earnings (loss) of
equity accounted investments and impairment charges related to
nonfinancial assets. Adjusted Net Earnings includes the Change in
deferred revenue and Change in Future Redemption Costs, net of the
income tax effect and non-controlling interest effect (where
applicable) on these items at an entity level basis. Adjusted Net
Earnings also includes distributions and dividends received or
receivable from equity-accounted investments.
Adjusted Net Earnings per Common Share
Adjusted Net Earnings per Common Share is not a measurement
based on GAAP, is not considered an alternative to Net Earnings per
Common Share in measuring profitability per Common Share and is not
comparable to similar measures used by other issuers. Adjusted Net
Earnings per common share is presented for both continuing and
discontinued operations.
Adjusted Net Earnings per Common Share provides a measurement
of profitability per Common Share on a basis consistent with
Adjusted Net Earnings. Calculated as Adjusted Net Earnings less
dividends declared on preferred shares and cumulative undeclared
dividends on preferred shares in the period divided by the number
of weighted average number of basic and diluted common
shares.
Free Cash Flow, Free Cash Flow before Dividends Paid and
Free Cash Flow before Dividends paid per Common Share
Free Cash Flow and Free Cash Flow before Dividends Paid are
non-GAAP measures and are not comparable to similar measures used
by other issuers. They are used in order to provide a
consistent and comparable measurement of cash generated from
operations and used as indicators of financial strength and
performance. Free Cash Flow is defined as cash flows from
operating activities, as reported in accordance with GAAP, less
adjustments for: (a) total capital expenditures as reported in
accordance with GAAP; and (b) dividends paid.
Free Cash Flow before Dividends Paid is defined as cash flows
from operating activities as reported in accordance with GAAP, less
capital expenditures as reported in accordance with GAAP.
Free Cash Flow before Dividends Paid per Common Share is a
measurement of cash flow generated from operations on a per share
basis. It is calculated as follows: Free Cash Flow before
Dividends Paid minus dividends paid on preferred shares and
non-controlling interests over the weighted average number of
common shares outstanding.
Reconciliation to GAAP
For a reconciliation of the above Non-GAAP financial measures
to GAAP, please refer to page 20 of the Management Discussion &
Analysis for the three months ended March
31, 2018.
Constant Currency
Because exchange rates are an important factor in
understanding period to period comparisons, the presentation of
various financial metrics on a constant currency basis or after
giving effect to foreign exchange translation, in addition to the
reported metrics, help improve the ability to understand operating
results and evaluate performance in comparison to prior periods.
Constant Currency information compares results between periods as
if exchange rates had remained constant over the periods. Constant
Currency is derived by calculating current period results using
foreign currency exchange rates from the same period in the prior
year. Results calculated on a Constant Currency basis should be
considered in addition to, not as a substitute for, results
reported in accordance with GAAP and may not be comparable to
similarly titled measures used by other companies. Constant
Currency is a basis of consideration mostly for Aimia's foreign
operations (those with a functional currency which is not the
Canadian dollar). The ILS segment and Other Businesses operate
under varying foreign currencies.
Forward-Looking Statements
Forward-looking statements are included in this news release.
These forward-looking statements are typically identified by the
use of terms such as "outlook", "guidance", "target", "forecast",
"assumption" and other similar expressions or future or conditional
terms such as "anticipate", "believe", "could", "estimate",
"expect", "intend", "may", "plan", "predict", "project", "will",
"would", and "should". Such statements may involve but are not
limited to comments with respect to strategies, expectations,
planned operations or future actions. The above guidance
(including Gross Billings, Adjusted EBITDA margin and Free Cash
Flow before Dividends Paid) constitutes forward-looking statements.
Aimia made a number of economic and market assumptions in preparing
its above guidance as well as assumptions regarding currencies and
the performance of the economies in which the company operates and
market competition and tax laws applicable to the company's
operations. The company cautions that the assumptions used to
prepare the above guidance, although reasonable at the time they
were made, may prove to be incorrect or inaccurate. In addition,
the above guidance does 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 other transactions that may be announced
or that may occur after April 26,
2018. 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
presently know about the risks affecting our business.
Accordingly, our actual results could differ materially from our
expectations as set forth in this news release.
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 significant
Accumulation Partners and clients, reliance on Redemption Partners,
greater than expected redemptions for rewards, unfunded future
redemption costs, supply and capacity costs, regulatory matters,
failure to safeguard databases, cyber security and consumer
privacy, retail market/economic conditions, industry competition,
Air Canada liquidity issues or air travel industry disruption,
airline industry changes and increased airline costs, changes to
coalition loyalty programs, seasonal nature of the business, other
factors and prior performance, reliance on key personnel, legal
proceedings, foreign operations, labour relations, pension
liability, technological disruptions, inability to use third-party
software and outsourcing, failure to protect intellectual property
rights, conflicts of interest, leverage and restrictive covenants
in current and future indebtedness, uncertainty of dividend
declarations and/or payments on either common shares or
preferred shares, interest rate and currency fluctuations, credit
ratings, audit by tax authorities, as well as the other
factors identified throughout Aimia's public disclosure records on
file with the Canadian securities regulatory
authorities.
The forward-looking statements contained herein represent
Aimia's expectations as of April 26,
2018, and are subject to change after such date. 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.
SOURCE AIMIA