LAVAL, Quebec -- "We continue to grow, and we do not intend to slow down any time soon," said Brian Hannasch, president and CEO of Alimentation Couche-Tard Inc., which logged its eighth year in a row of "record-setting" earnings.
"This quarter, we celebrated the expansion of our European network to Ireland and further strengthened our presence in Denmark," Hannasch said. "We have begun to see the landscape change in the United States as hundreds of signs bearing our global Circle K brand lit up our stores, welcoming our customers in the Southeast and engaging our employees around the world."
He continued, "Fiscal-year 2017 will be a year of integrating and learning from Topaz in Ireland and Shell in Denmark. We also very much look forward to completing our acquisition of the Esso-branded Imperial Oil locations in Ontario and Québec, which should be finalized during the first half-year of fiscal 2017. As a united global brand, we will be stronger than all our individual brands combined. We will benefit even more from our scale, international presence and expertise."
CFO Claude Tessier said, "We are on track to reach our target of $85 million in synergies from The Pantry integration. Even amidst a high degree of acquisition activity, our financial position remains strong, with very comfortable leverage ratios. ... We will continue to ensure we are well positioned to take advantage of any opportunities that might present themselves in the future."
For its fiscal fourth quarter, ended April 24, 2016, Couche-Tard has announced net earnings of $206.2 million, compared with $126.0 million for the fourth quarter of the previous fiscal year. The results for the quarter were affected by a $7.7 million pretax accelerated depreciation and amortization expense in connection with the corporation's global brand initiative and early termination of certain fuel supply contracts. Net earnings amounted to $1.1937 billion for fiscal 2016, up 28.4% over fiscal 2015.
During the quarter, in connection with The Pantry integration, Couche-Tard realized cost reductions of approximately $17.0 million and merchandises and services supply cost reductions of approximately $12.0 million.
The company finalized the review of its fuel branding, supply and distribution strategy for the southeastern United States, which resulted in payments of $3.2 million for penalties for the early termination of existing fuel supply contracts during the fourth quarter. In connection with its Circle K rebranding project, the company recorded an incremental depreciation and amortization expense of $7.7 million to earnings of the fourth quarter.
On Feb. 1, 2016, Couche-Tard acquired all outstanding shares of Topaz Energy Group Ltd. Resource Property Investment Fund plc and Esso Ireland Ltd., collectively known as Topaz, for a total cash consideration of $280.9 million plus a contingent consideration of a maximum undiscounted amount $16.3 million payable upon signature of two contracts.
Topaz is the leading convenience and fuel retailer in Ireland with a network comprising 444 stations, 158 operated by Topaz and 286 operated by dealers.
On May 1, 2016, the company completed the acquisition of all the shares of Dansk Fuel A/S, which represents A/S Dansk Shell's retail business, comprising 315 stations. Couche-Tard will retain 131 sites, of which 74 are full-service stations, 49 are unmanned automated fuel stations and eight are truckstops.
On May 26, 2016, Couche-Tard reached an agreement to purchase from Sevenoil Est OÜ 23 company-operated sites located in Estonia, of which 11 are full-service fuel stations with convenience stores and 12 are unmanned automated fuel stations, bringing its presence in Estonia to 77 sites.
As of April 24, 2016, Laval, Quebec-based Couche-Tard's network comprised 7,888 convenience stores throughout North America, including 6,490 stores offering road transportation fuel. Its North American network consists of 15 business units, including 11 in the United States covering 41 states and four in Canada covering all 10 provinces. In Europe, Couche-Tard operates a broad retail network across Scandinavia, Ireland, Poland, the Baltics and Russia through 10 business units. As of April 24, 2016, it comprised 2,659 stores, the majority of which offer road transportation fuel and convenience products while the others are unmanned automated fuel stations.
In addition, almost 1,500 stores are operated by independent operators under the Circle K banner in 13 other countries or regions worldwide (China, Costa Rica, Egypt, Guam, Honduras, Hong Kong, Indonesia, Macau, Malaysia, Mexico, the Philippines, the United Arab Emirates and Vietnam). These bring Couche-Tard's total network to close to 12,000 sites.