Empire's Strategic Direction

In the first quarter of fiscal 2021, the Company launched Project Horizon, a three-year strategy focused on core business expansion and the acceleration of e-commerce. The Company remains on track to achieve an incremental $500 million in annualized EBITDA and an improvement in EBITDA margin of 100 basis points by fiscal 2023 by growing market share and building on cost and margin discipline. The Company expects to generate a compound average growth rate in earnings per share of at least 15% over Project Horizon’s three-year timeframe.

In fiscal 2021, Project Horizon benefits were achieved from the expansion and renovation of the Company’s store network, the addition of new stores, improvement in store operations and merchandising from data analytics along with continued efficiencies gained through strategic sourcing initiatives.

In fiscal 2022, earnings continued to be positively impacted by Project Horizon’s strategic initiatives, including promotional optimization and data analytics, the continued expansion and renovation of the store network, and strategic sourcing efficiencies. Benefits in fiscal 2021 and fiscal 2022 were partially offset by the planned investment in the Company’s e-commerce network.

These initiatives will continue to deliver benefits in fiscal 2023, and additional benefits are expected from strategic initiatives launched more recently as part of Project Horizon, including the Company’s new loyalty program, Scene+, which will be rolled out gradually. Project Horizon initiatives focused on loyalty, store optimization and customer experience will primarily benefit fiscal 2024 and beyond.

Growth in Market Share
Growth in market share is expected from supporting and investing further in the store network, improving store productivity, scaling grocery e-commerce, growing the Own Brands portfolio, continuing the Western discount business expansion, increasing the Farm Boy footprint in Ontario and the acquisition of Longo’s which occurred in the first quarter of fiscal 2022.

Building on Cost and Margin Discipline
The Company has significantly improved its efficiency and cost competitiveness through Project Horizon. Further opportunity still remains to remove non value-added costs and optimize margins.