Alimentation Couche-Tard (ATD) Q4 2024 earnings summary

Executive summary

• CEO Brian Hannasch announced his retirement, with Alex Miller appointed as the next CEO effective September 6; Hannasch will remain as special advisor focused on M&A for the next two years.

• Net earnings attributable to shareholders for FY2024 were $2.7B, with EBITDA of $5.6B; Q4 net earnings were $453M ($0.47/diluted share), down from $670.7M in Q4 FY2023.

• The year was marked by the transformative acquisition of 2,175 TotalEnergies retail assets in Europe, expanding presence and synergy potential.

• Same-store merchandise revenues declined in the U.S. (-0.5%), Europe/Other (-2%), and Canada (-3.4%) year-over-year, with Europe impacted by weak Hong Kong results.

• Loyalty programs and food sales growth, including the Fresh Food, Fast program, drove increased customer engagement and improved profitability.

Financial highlights

• FY2024 revenues were $69.3B, with gross profit of $12.1B; Q4 revenues were $17.6B, up 8.2% year-over-year, mainly due to acquisitions and wholesale fuel growth.

• Adjusted EBITDA for FY2024 was $5.6B; Q4 adjusted EBITDA was $1.1B, down 13.6% year-over-year.

• Adjusted diluted EPS for FY2024 was $2.81; Q4 adjusted diluted EPS was $0.48, a 32.4% decrease year-over-year.

• Free cash flow reached $1.7B (31% of EBITDA); leverage ratio increased to 2.21x due to acquisitions.

• Dividends increased by 25.5% to CA 66.50¢ per share, and $1.4B in shares were repurchased in FY2024.

Outlook and guidance

• Management targets $10B EBITDA by FY2028, driven by organic growth, M&A, and synergies from TotalEnergies.

• Cost reduction target of CAD 800M over five years is nearly half achieved, with $400M identified and banked in the last twelve months.

• OpEx guidance is to beat inflation by at least 1% on a same-store basis; income tax rate expected to normalize to low 20% range.

• Strategic priorities include food and beverage leadership, digital acceleration, and disciplined capital allocation.

• Management remains optimistic about long-term growth, focusing on operational excellence and leveraging global scale.