Empire unveils Project Horizon: three-year strategy for core business expansion and e-commerce acceleration
STELLARTON – Empire Company Limited outlined its new three-year strategy to deliver an incremental $500 million in annualized EBITDA (earnings before interest, taxes, depreciation and amortization) by the end of fiscal 2023.
And at the end of the summer, Empire plans to implement and test a Voilà store pick solution at the Aberdeen Sobeys, East River Road. Ocado’s store pick solution is live and successful in various cities across the world.
“Empire now has the team, the structure and the vision to achieve its sales and earnings potential,” said Michael Medline, president & CEO, Empire. “Even though we exceeded our Project Sunrise savings target of $550 million, there is still substantial value to unlock through Project Horizon. As the retail landscape in Canada continues to react and shift under the seismic waves caused by the pandemic it is clear now, more than ever, that we must be able to serve customers where, when and how they want to shop. We will invest in our core store business to drive growth and will move much faster with Voilà customer fulfillment centres and a new, exciting store pick solution, using Ocado technology.”
Empire delayed the launch of its new strategy, originally planned for release in May, as the company was focused on keeping its teammates and customers safe and keeping its stores filled through the peak of the COVID-19 pandemic lockdowns. As well, management took the time to review social and economic implications of the pandemic on the Canadian environment to ensure they were reflected in the strategy.
The company expects to achieve $500 million in benefits over the next three years by growing market share and building on its cost and margin discipline. The $500 million does not include benefits or risks, if any, from pandemic related sales and cost impacts.
The Company expects to achieve the targeted EBITDA improvements net of the expenses required to accelerate and scale up e-commerce across the country. Online grocery penetration has grown dramatically as Canadians embraced e-commerce through the pandemic with online grocery penetration tripling from its pre-COVID level. This significant change warranted a shift in strategy to bring e-commerce to more Canadians faster than originally planned.
Management continues to be committed to returning cash to its shareholders through dividends and share buybacks, as evidenced by an average dividend growth rate of 7% over the last three years and share buybacks of $100 million in fiscal 2020. The Company plans to continue to increase its dividends and re-purchase shares on a disciplined basis, taking into account liquidity expectations, market conditions and the outlook for the three years.