Preliminary financial and operational results for the second quarter indicate strong same store sales in supermarket and pharmacy businesses. Expected to advance operational and business performance of the Company in the balance of the year, synergy targets on track
BRAMPTON, ON, July 17, 2014 /CNW/ - The Board of Directors of Loblaw Companies Limited (TSX: L) today announced that Galen G. Weston, Executive Chairman, has also been appointed as President, effective immediately. Thomas O'Neill, Lead Independent Director, confirmed the appointment as part of a series of management changes at the Company.
As Executive Chairman, Mr. Weston is responsible for setting the strategic direction of the Company and in leading the Board. In assuming the position of President, Mr. Weston will also be responsible for the execution of the Company's strategy, leadership of the management team and its overall business performance.
Mr. Weston has an extensive background in Canadian retail, and an intimate knowledge of the business and its talent. He has been the strategic architect of reshaping the grocery business, as well as transforming Loblaw into a diversified portfolio of complementary businesses, including the creation of Choice Properties and the acquisition of Shoppers Drug Mart.
"I am excited about the future, and the opportunity to execute on the strategic vision we have built for the Company. I am confident that Loblaw will continue to advance its business both financially and operationally and be well positioned to create long-term sustainable value," commented Mr. Weston.
The Company also announced the following additional management changes
Vicente Trius, President since August 2011, will be leaving the business effective today for family reasons to return to Brazil. In commenting on Vicente's departure, Mr. Weston said: "Vicente has made an enormous impact on virtually every aspect of our business in the time that he has been with the Company. Our businesses are stronger, our customer proposition more compelling, and our operating effectiveness much improved. He has set a strong foundation for the future.
"When we release our second quarter results next week," continued Mr. Weston, "You will see that Vicente and the team have delivered another solid quarter in a very competitive supermarket environment, with synergies, SAP and efficiencies on track. With the business in very good shape, Vicente felt it was the right time to leave Loblaw. I respect his decision, and on behalf of the Board and all of our colleagues in the business, I thank him for his many contributions."
The Company also announced that Domenic Pilla, President of Shoppers Drug Mart, is leaving by the end of 2014. Mr. Weston commented that, "Domenic has done an outstanding job at Shoppers Drug Mart since he joined the business almost three years ago. He played a pivotal role in the negotiation of the agreement to acquire Shoppers Drug Mart last year, and since then Domenic has been actively engaged in driving Shoppers Drug Mart's business to deliver on its plan. As well, Domenic has been focused on working with the team to ensure we realize the synergies identified for the combined businesses as a result of the acquisition. Domenic is leaving as he would like to continue his career by pursuing opportunities to lead a widely-held public company, and we are respectful of his decision.
"For the balance of the year, Domenic will remain as President of Shoppers Drug Mart and be fully engaged in the business. In addition to his normal duties, Domenic will work very closely with me to deliver on several important initiatives, including the transition to a new President of Shoppers Drug Mart. I have every confidence that Domenic will continue to make a significant contribution in the second half of the year," concluded Mr. Weston.
New organizational structure to drive business performance and deliver efficiencies and synergies
As part of the new management structure to support the Company's evolving business, Mr. Weston appointed seasoned operational leaders to assume the following key roles:
- Richard Dufresne, will assume the role of Chief Financial Officer of Loblaw. As CFO of Loblaw, Mr. Dufresne's key responsibilities will be delivering the financial plan of the organization; achieving the targeted synergies related to the Shoppers Drug Mart acquisition; and de-leveraging the balance sheet. Mr. Dufresne will retain his role as Chief Financial Officer at George Weston Limited.
- Sarah Davis, previously Chief Financial Officer, will become Chief Administrative Officer, responsible for Supply Chain, IT (including SAP implementation), Goods Not for Resale, Loblaw Properties and Strategy. Her key objective will be to deliver efficiencies across the organization, including those resulting from the implementation of SAP. Ms. Davis, who was appointed CFO in 2010, has an exceptional understanding of the Company. This, in combination with her strong financial background, particularly in operational roles, will be instrumental in driving Loblaw to achieve additional operational efficiencies.
- Grant Froese, previously Chief Administrative Officer, becomes Chief Operating Officer of the Company. In this new role, Mr. Froese will be responsible for the operating performance of the Market, Discount and Emerging Business grocery operations, as well as the division support functions of Control Brands, e-Commerce, and Off-shore Procurement. Grant is a strong merchant with over 30 years of food retail experience and a strong record of delivering results.
- Mike Motz, currently EVP and Chief Merchandising Officer, will become the President of Shoppers Drug Mart effective on the departure of Domenic Pilla, and will be responsible for delivering the strategic and operational plan for Shoppers Drug Mart, continuing on the strong foundation Mr. Pilla has built. Mr. Motz, an 11 year veteran of the business, was instrumental, with Mr. Pilla, in increasing Shoppers Drug Mart's competitiveness, customer offer, and loyalty program.
The rest of the broader management team remain unchanged.
"I am very confident in the exceptionally talented team at Loblaw," said Mr. Weston. "This positions us well to leverage the potential of the new retail organization and drive financial performance."
Second quarter 2014 financial results were solid, delivering strong same store sales in both the supermarket and pharmacy businesses
Mr. Weston further went on to comment on the Company's financial and operational performance for the second quarter of 2014, "Against the backdrop of an extremely competitive supermarket environment and the deflationary pressure of regulatory drug reform, our business continues to perform well, with strong same store sales growth in our supermarket and pharmacy businesses. We expect to continue to successfully execute on our strategy in the second half of the year, as well as make material progress on our synergy targets," continued Mr. Weston.
"Since we announced the deal to acquire Shoppers Drug Mart over a year ago, we have made tremendous progress in realizing key deliverables that underpinned the transaction. Our two businesses are working well together and we are on track to deliver the first $100 million in synergies by the end of the first quarter of 2015."
Complete information about the second quarter performance of the Company will be contained in the second quarter results to be released on July 24th.
Conference Call Information
Loblaw will be hosting a conference call and webcast to discuss today's announcement at 9:00 a.m. (ET). Please note that the Company will not be addressing its second quarter results on the call and will only address questions related to today's announcement.
To access the call, please dial (416) 204-9269 or (800) 499-4035. The playback will be made available approximately two hours after the event at (647) 436-0148 or (888) 203-1112, access code: 1768897. To access via audio webcast please go to the "Investor Centre" section of loblaw.ca.
About Loblaw Companies Limited
Loblaw Companies Limited is Canada's food and pharmacy leader, the nation's largest retailer, and the majority unitholder of Choice Properties Real Estate Investment Trust. Loblaw provides Canadians with grocery, pharmacy, health and beauty, apparel, general merchandise, banking, and wireless mobile products and services. With more than 2,300 corporate, franchised and Associate-owned locations, Loblaw, its franchisees, and Associate-owners employ approximately 192,000 full- and part-time employees, making it one of Canada's largest private sector employers.
Loblaw's purpose - Live Life Well - puts first the needs and well-being of Canadians who make one billion transactions annually in the Company's stores. Loblaw is positioned to meet and exceed those needs in many ways: convenient locations; more than 1,050 grocery stores that span the value spectrum from discount to specialty; full-service pharmacies at more than 1,250 Shoppers Drug Mart and Pharmaprix locations and more than 500 Loblaw locations; no-fee banking with PC Financial; affordable Joe Fresh fashion and family apparel; and three of Canada's top consumer brands in Life Brand®, no name® and President's Choice®. Through the PC Plus™ and Shoppers Optimum® loyalty programs, more than one in every three Canadians are rewarded for shopping with the companies.
Certain statements in this News Release for Loblaw Companies Limited ("Loblaw") contain forward-looking statements. Forward-looking statements are typically identified by words such as "expect", "anticipate", "believe", "foresee", "could", "estimate", "goal", "intend", "plan", "seek", "strive", "will", "may", "indicate", and "should" and similar expressions. Forward-looking statements reflect current estimates, beliefs and assumptions, which are based on Loblaw's perception of historical trends, current conditions and expected future developments, as well as other factors management believes are appropriate in the circumstances. Loblaw's estimates, beliefs and assumptions are inherently subject to significant business, economic, competitive and other uncertainties, risks, and contingencies regarding future events and as such, are subject to change. Loblaw can give no assurance that such estimates, beliefs and assumptions will prove to be correct. Additional information on these uncertainties, risks and contingencies are included in reports filed by Loblaw with applicable securities regulatory authorities and may be accessed through the SEDAR website (www.sedar.com).
This News Release contains forward-looking statements concerning the announced management changes, the state of Loblaw's business, goals and ongoing objectives including the Company's second quarter 2014 financial results; same store sales results for the second quarter; the Company's future strategic plans; the outlook for the balance of the year; and anticipated synergies from the acquisition of Shoppers Drug Mart.
All of the forward-looking statements made in this News Release are qualified by these cautionary statements. Readers are cautioned not to place undue reliance on these forward-looking statements, which reflect Loblaw's expectations only as of the date of this News Release. Loblaw disclaims any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.
SOURCE: Loblaw Companies Limited
For further information:
Media Enquiries, contact:
Loblaw Companies Limited, Vice President Corporate Affairs and Communication
Investors Enquiries, contact:
Loblaw Companies Limited, Senior Vice President, Investor Relations
Telephone: (905) 861-2127