Company commits additional $50M to share buybacks through NCIB
MONTREAL, Nov. 24, 2015 /CNW Telbec/ - Following the release of its third-quarter financial results and the subsequent decline in the market price of its common shares, Aimia Inc. (TSX:AIM), the data-driven marketing and loyalty analytics company, today provided an update on actions taken to execute the company's strategic business plan, including its capital allocation strategy. Specifically, at current share price levels, Aimia intends, subject to regulatory requirements and market conditions, to aggressively repurchase shares through its Normal Course Issuer Bid (NCIB).
"We consistently evaluate the company's capital allocation options, and at the current share price level, we believe that additional buybacks will provide the best return on capital to our shareholders," said Rupert Duchesne, Group Chief Executive, Aimia. "We do not believe that the current share price reflects the company's improving prospects and strong balance sheet. We are confident that the actions we have taken to improve operational efficiency, and the investments we have made in our core businesses in recent years, will drive an improved 2016."
Aimia has repurchased more than 17 million shares since November 2014, returning more than $225 million to shareholders. The current NCIB, which expires in May 2016, permits the company to purchase up to another 9.9 million shares during this period. Aimia intends, subject to regulatory requirements and market conditions, to purchase an aggregate amount of $50 million in common shares in the coming months through the use of all repurchase methods available to it through the NCIB, including block trade exemptions.
Aimia's return of capital to shareholders will remain consistent with its commitment to keeping an investment grade rating and strong balance sheet, which has supported five consecutive increases to its common share dividend, and provided resilience through economic uncertainty.
Since early 2015, Aimia's management and Board of Directors have been engaged in an in-depth review of the company's business strategy and plans for growth, with the assistance of external advisors. The review resulted in a number of decisions with the goal of simplifying the company's operations, reducing costs and focusing on the company's core businesses while promoting growth and ensuring appropriate allocation of capital:
- The company is reorganizing itself along divisional lines as announced in August, to focus on building its core travel and retail coalition assets, data analytics and platform-based loyalty solutions business. Through the review, the company identified each of these areas as meeting the company's threshold for acceptable return on capital.
- The company engaged advisors and is evaluating sales of non-core assets and minority investments that do not directly align with the company's refined focus. This process is actively underway and the company will withhold further comment due to commercial sensitivities.
- The company has identified cost efficiencies through its reorganization, which will deliver $20 million of annualized savings in 2016. A second $20 million of annualized cost savings will be implemented by the end of 2016. Further cost efficiencies may result after any disposals.
Aimia's management and Board of Directors review the company's strategy on an on-going basis with the goal of delivering long-term value to shareholders.
Aimia reiterates its guidance for 2015 and current expectations for 2016 as set out in its third-quarter earnings release issued on November 13th, including 2015 Gross Billings of between $2.4 billion and $2.46 billion, an Adjusted EBITDA margin of approximately 9 per cent, and Free Cash Flow before Dividends Paid of between $180 million and $190 million. For 2016, a return to modest Gross Billings growth and the benefits of the identified cost savings are expected to drive a double-digit improvement in Adjusted EBITDA and to result in Free Cash Flow before Dividends Paid above 2015 levels and a higher Free Cash Flow before Dividends Paid per Common Share. The 2015 guidance and 2016 expectations exclude severance and restructuring charges related to the cost savings described above.
Aimia Inc. (TSX:AIM) is a data-driven marketing and loyalty analytics company. We provide our 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 (coalitions) and individual companies to help generate, collect and analyze customer data and build actionable insights.
We do this through our own coalition loyalty programs such as Aeroplan in Canada and Nectar in the UK, and through provision of loyalty strategy, program development, implementation and management services underpinned by leading products and technology platforms such as the Aimia Loyalty Platform and Smart Button, 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, Air Miles Middle East 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 a full list of our partnerships and investments, and more information about Aimia, visit www.aimia.com.
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 and Adjusted EBITDA margin, Free Cash Flow before Dividends Paid, Free Cash Flow before Dividends Paid per Common Share and capital expenditures) 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 Corporation operates and market competition and tax laws applicable to the Corporation's operations. The Corporation 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 November 24, 2015. 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, failure to safeguard databases, cyber security and consumer privacy, changes to the Aeroplan program, reliance on Redemption Partners, conflicts of interest, greater than expected redemptions for rewards, regulatory matters, retail market/economic conditions, industry competition, Air Canada liquidity issues or air travel industry disruptions, airline industry changes and increased airline costs, supply and capacity costs, unfunded future redemption costs, 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, inability to use third-party software and outsourcing, failure to protect intellectual property rights, interest rate and currency fluctuations (including currency risk on our foreign operations which are denominated in a currency other than the Canadian dollar, mainly the pound sterling, and subject to fluctuations as a result of foreign exchange rate variations), leverage and restrictive covenants in current and future indebtedness, uncertainty of dividend payments, managing growth, 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 November 24, 2015 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.