0001870997false00018709972022-04-282022-04-28

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

Date of report (Date of earliest event reported):

April 28, 2022

LOYALTY VENTURES INC.

(Exact Name of Registrant as Specified in Charter)

Delaware

 

001-40776

 

87-1353472

(State or Other Jurisdiction

 

(Commission

 

(IRS Employer

of Incorporation)

 

File Number)

 

Identification No.)

8235 DOUGLAS AVENUE, SUITE 1200

DALLAS, TX 75225

(Address and Zip Code of Principal Executive Offices)

(972) 338-5170

(Registrant’s Telephone Number, including Area Code)

NOT APPLICABLE

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K is intended to simultaneously satisfy the filing obligation of the Registrant under any of the following provisions:

 

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

 

 

 

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

 

 

 

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

 

 

 

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

 

Trading symbol

 

Name of each exchange on which registered

Common stock, par value $0.01 per share

 

LYLT

 

The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company  

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.   

Item 2.02. Results of Operations and Financial Condition.

On April 28, 2022, Loyalty Ventures Inc. (the “Company”) issued a press release regarding its results of operations for the first quarter ended March 31, 2022. A copy of this press release is furnished as Exhibit 99.1.

Item 7.01. Regulation FD Disclosure.

On April 28, 2022, the Company issued a press release regarding its results of operations for the first quarter ended March 31, 2022. A copy of this press release is furnished as Exhibit 99.1.

Attached as Exhibit 99.2 is a presentation to be given to investors and others by senior officers of the Company.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits

Exhibit No.

Document Description

99.1

Press Release dated April 28, 2022 announcing the results of operations for the first quarter ended March 31, 2022.

99.2

Investor Presentation Materials.

104

Cover Page Interactive Data File (embedded within the Inline XBRL document).

Note: The information contained in this Current Report on Form 8-K (including Exhibits 99.1 and 99.2) shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, except as expressly set forth by specific reference in such a filing.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Loyalty Ventures Inc.

Date: April 28, 2022

By:

/s/ Cynthia L. Hageman

Cynthia L. Hageman

Executive Vice President, General Counsel and Secretary

Exhibit 99.1

Graphic

Loyalty Ventures Inc. Reports First Quarter 2022 Results

Results in Line with Expectations Given Historical First Quarter Seasonal Trends
Priority Investments Underway in Digital Innovations, Content Personalization and Enhanced Program Value
New Leadership at AIR MILES Brings Proven Track Records and Deep Expertise in Consumer Insights, Data & Analytics, Digital Marketing, Loyalty, and Technology

Summary of Financial Results

(in millions, except per share data)

First Quarter 2022

Revenue

$154.9

Net Income

$1.0

Diluted EPS

$0.04

Adjusted EBITDA*

$24.7

* See “Reconciliation of Non-GAAP Financial Measures” and “Financial Measures” below for a discussion of non-GAAP financial measures.

DALLAS, Texas, April 28, 2022 – Loyalty Ventures Inc. (Nasdaq: LYLT), a leading provider of tech-enabled, data-driven consumer loyalty solutions today announced financial results for the first quarter ended March 31, 2022.

Commenting on the results, Charles Horn, Chief Executive Officer said, “First quarter performance was in line with our expectations during what is traditionally our seasonally slowest quarter. As anticipated, the AIR MILES® Reward Program redemption patterns began to normalize with the return of post-pandemic leisure travel, which coincided with the launch of the first phase of our next generation travel platform. BrandLoyalty expanded its local sourcing and took actions to mitigate logistical issues as it prepares to deliver more campaigns in 2022.

“In the first quarter, AIR MILES renewed top five Sponsor, American Express, and added new brands, including Uniqlo, H&R Block and QE Home to airmilesshops.ca, its portal where consumers can earn AIR MILES reward miles for shopping online. Concurrently, we activated a national marketing campaign to drive greater Collector enrollment and engagement and have launched several additional marketing campaigns in conjunction with AIR MILES’ 30th anniversary. At BrandLoyalty, we continue to compete effectively for new business and to innovate, most recently launching a pilot program that makes personalized offers to consumers when they are logged into our partners’ mobile apps. Also, we decided to pause future business in Russia in light of the Russia/Ukraine conflict but will honor commitments to current programs with Russian grocery chain clients in fulfillment of contractual obligations.

“A key development recently announced was the change in leadership at our AIR MILES Reward Program. We are thrilled that Shawn Stewart has agreed to re-join the company as President of the AIR MILES Reward Program. His proven track record and passion for building new capabilities and transforming organizations and brands align with our strategic objectives. He brings excellent credentials to the AIR MILES Reward Program as well as a deep understanding of Sponsor needs, Collector behaviors, and our business development opportunities. Rick Neuman also joined the AIR MILES Reward Program as Chief Technology Officer, where he will leverage his experience in creating product and technology strategies for global merchants to develop, implement and oversee the program’s technology strategy and roadmap. These new additions to the AIR MILES


Loyalty Ventures Inc.

April 28, 2022

Reward Program leadership team are inspired to build upon our 30-year history as a premier Canadian loyalty program.”

First Quarter 2022 Consolidated Financial Results

Total revenue for the first quarter was $155 million, down 12% from the first quarter of 2021. Adjusted EBITDA of $25 million was down 36% year over year. Net income was $1 million, or $0.04 per diluted share.

First Quarter Segment Financial Results

AIR MILES Reward Program: Revenue decreased 6% to $66 million, compared to $70 million in the first quarter of 2021, primarily due to the increase in the Collector value proposition implemented in late 2021, and the impact of the decline in AIR MILES reward miles issued during the pandemic in 2020 and 2021. Adjusted EBITDA decreased 19% to $29 million, compared to the first quarter of 2021, due to lower revenue and additions to our business development and technology teams.

The 4% year over year decrease in AIR MILES reward miles issuance related to the non-renewal of two Sponsors in the first quarter of 2021; adjusting for non-renewals, issuance was consistent with the prior year quarter. AIR MILES reward miles redeemed increased 43% compared to the first quarter of 2021, primarily reflecting pent-up demand for travel as COVID-related restrictions abated.

BrandLoyalty: Revenue decreased 16% to $89 million, compared to $106 million in the first quarter of 2021, primarily resulting from the timing of larger programs. Adjusted EBITDA of $236,000 was down year over year due to the lost margin from the decline in revenue but was consistent with expectations.

Summary & Outlook

“2022 is a year of transition for Loyalty Ventures, as we move forward with significant investments to capitalize on the market leadership positions of both the AIR MILES Reward Program and BrandLoyalty. We are engaging with Sponsors as we embark on programs to accelerate digital innovation, enhance content personalization, and increase program value at the AIR MILES Reward Program to ensure that our investments will yield meaningful long-term returns. At BrandLoyalty, we are closely watching consumer trends in the more than 40 countries in which we operate and are taking into consideration our decision to pause our programs in Russia. Based on our current visibility, and due to developments in Russia, we expect full year 2022 revenue to be at the lower end of our $775 million to $800 million guidance range.

“Our resources are fully focused on accelerating long term growth in ways that will benefit our Collectors, Sponsors and Clients including enhancing the value proposition and upgrading the Collector experience at the AIR MILES Reward Program and expanding choices at BrandLoyalty. In addition to our 2022 investments and initiatives underway, we see opportunities to take our data-driven loyalty solutions to the next level by integrating and leveraging the unique capabilities resident in each of these businesses” Mr. Horn concluded.

First Quarter 2022 Conference Call and Webcast Information

Loyalty Ventures Inc. will hold a conference call to discuss its results and business outlook at 4 p.m. CT on Thursday, April 28, 2022. The live webcast of the conference call can be accessed here. The webcast replay will be available on the Company’s investor relations website for up to one year.

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Loyalty Ventures Inc.

April 28, 2022

About Loyalty Ventures Inc.

Loyalty Ventures Inc. (Nasdaq: LYLT), an S&P SmallCap 600 company, is a leading provider of tech-enabled, data-driven consumer loyalty solutions. We help partners achieve their strategic and financial objectives including increased consumer basket size, shopper traffic, frequency, digital reach and enhanced program reporting and analytics.

We help financial services providers, retailers and other consumer-facing businesses create and increase customer loyalty across multiple touch points from traditional to digital to mobile and emerging technologies. We own and operate the AIR MILES® Reward Program, Canada’s most recognized loyalty program, and Netherlands-based BrandLoyalty, a global provider of purpose-driven, tailor-made, campaign-based loyalty solutions for grocers and other high-frequency retailers.

At our AIR MILES Reward Program, AIR MILES Collectors earn AIR MILES at more than 300 leading Canadian, global and online brands and at thousands of retail and service locations across the country. This activity powers an unmatched data asset which along with world-class analytics and marketing capabilities, enables clients to accelerate their marketing activities and ROI. AIR MILES provides Collectors the flexibility and choice to use AIR MILES on aspirational rewards such as merchandise, travel, events or attractions or, instantly, in-store or online, through AIR MILES Cash at participating Partner locations. For more information, visit: airmiles.ca. Having celebrated the issuance of its 100 Billionth Mile in 2021, AIR MILES invites Canadians to visit the Program on Facebook, Instagram and Twitter.

BrandLoyalty provides winning loyalty campaigns by connecting high-frequency retailers, brand partners, and shoppers. BrandLoyalty changes shoppers’ behavior in high-frequency retail worldwide - both on a transactional and emotional level. Find out more via brandloyalty.com or on LinkedIn and YouTube.

More information about Loyalty Ventures can be found at loyaltyventures.com.

Caution Regarding Forward-Looking Statements

This release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements give our expectations or forecasts of future events and can generally be identified by the use of words such as “believe,” “expect,” “anticipate,” “estimate,” “intend,” “project,” “plan,” “likely,” “may,” “should” or other words or phrases of similar import. Similarly, statements that describe our business strategy, outlook, objectives, plans, intentions or goals also are forward-looking statements. Examples of forward-looking statements include, but are not limited to, statements we make regarding, and the guidance we give with respect to, our anticipated operating or financial results and future economic conditions, including, but not limited to, changes in geopolitical conditions, fluctuation in currency exchange rates, market conditions and COVID-19 or other impacts related to reduction in demand from clients, supply chain disruption with respect to our rewards, disruptions in the airline or travel industries and labor shortages due to quarantine.

We believe that our expectations are based on reasonable assumptions. Forward-looking statements, however, are subject to a number of risks and uncertainties that could cause actual results to differ materially from the projections, anticipated results or other expectations expressed in this release, and no assurances can be given that our expectations will prove to have been correct. These risks and uncertainties include, but are not limited to, factors set forth in the Risk Factors section of both (1) our Form 10-K for the most recently ended fiscal year and (2) any updates in Item 1A, or elsewhere, in our Quarterly Reports on Form 10-Q filed for periods subsequent to such Form 10-K or any updates thereto. Our forward-looking statements speak only as of the date made, and we undertake no obligation, other than as required by applicable law, to update or revise any forward-looking statements, whether as a result of new information, subsequent events, anticipated or unanticipated circumstances or otherwise.

Financial Measures

In addition to the results presented in accordance with generally accepted accounting principles, or GAAP, the Company may present financial measures that are non-GAAP measures, adjusted EBITDA and adjusted EBITDA margin. The Company believes that these non-GAAP financial measures, viewed in addition to and not in lieu of the Company’s reported GAAP results, provide useful information to investors regarding the Company’s

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Loyalty Ventures Inc.

April 28, 2022

performance, liquidity and overall results of operations. The Company uses adjusted EBITDA as an integral part of internal reporting to measure the performance and operational strength of reportable segments and to evaluate the performance of senior management. Adjusted EBITDA eliminates the uneven effect across all reportable segments of non-cash depreciation of tangible assets and amortization of intangible assets, including certain intangible assets that were recognized in business combinations, and the non-cash effect of stock compensation expense. In addition, adjusted EBITDA eliminates strategic transaction costs, which represent costs related to the separation. Adjusted EBITDA margin represents adjusted EBITDA divided by revenue.

Reconciliation of Non-GAAP Financial Measures

Reconciliations to comparable GAAP financial measures are available in the accompanying schedules, which are posted as part of this earnings release in both the Press Releases and Investor Relations sections on the Company’s website (www.loyaltyventures.com). No reconciliation is provided with respect to forward looking annual guidance as we cannot reliably predict all necessary components or their impact to reconcile these non-GAAP measures without unreasonable effort. The events necessitating a non-GAAP adjustment are inherently unpredictable and may have a material impact on the Company’s future results.

The financial measures presented are consistent with the Company’s historical financial reporting practices. The non-GAAP financial measures presented herein may not be comparable to similarly titled measures presented by other companies and are not identical to corresponding measures used in other various agreements or public filings.

Investor Contact:
Lynn Morgen

ADVISIRY PARTNERS 

lynn.morgen@advisiry.com

+1.212.750.5800

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Loyalty Ventures Inc.

April 28, 2022

LOYALTY VENTURES INC.

UNAUDITED CONDENSED CONSOLIDATED AND COMBINED STATEMENTS OF INCOME

Three Months Ended

March 31, 

    

2022

    

2021

(in thousands, except per share amounts)

Revenues

 

  

 

  

Redemption, net

$

84,976

$

104,864

Services

 

63,783

 

66,223

Other

 

6,186

 

5,467

Total revenue

 

154,945

 

176,554

Operating expenses

 

  

 

  

Cost of operations (exclusive of depreciation and amortization disclosed separately below)

 

127,878

135,846

General and administrative

 

6,209

3,685

Depreciation and other amortization

 

9,125

8,595

Amortization of purchased intangibles

 

288

439

Total operating expenses

 

143,500

 

148,565

Operating income

 

11,445

27,989

Interest expense (income), net

 

9,052

(69)

Income before income taxes and loss from investment in unconsolidated subsidiary

 

2,393

 

28,058

Provision for income taxes

 

1,375

8,984

Loss from investment in unconsolidated subsidiary – related party, net of tax

 

36

Net income

$

1,018

$

19,038

Net income per share:

Basic

$

0.04

$

0.77

Diluted

$

0.04

$

0.77

Weighted average shares:

Basic

24,598

24,585

Diluted

24,626

24,585

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Loyalty Ventures Inc.

April 28, 2022

LOYALTY VENTURES INC.

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

March 31, 

December 31, 

2022

    

2021

(in thousands, except per share amounts)

ASSETS

Cash and cash equivalents

$

139,724

$

167,601

Accounts receivable, net

 

271,084

 

288,251

Inventories, net

 

213,183

 

188,577

Redemption settlement assets, restricted

 

699,531

 

735,131

Other current assets

 

28,653

 

28,627

Total current assets

 

1,352,175

 

1,408,187

Property and equipment, net

 

74,563

 

79,959

Right of use assets - operating

 

96,459

 

99,515

Deferred tax asset, net

 

58,363

 

58,128

Intangible assets, net

 

2,729

 

3,095

Goodwill

 

639,947

 

649,958

Other non-current assets

 

24,739

 

24,885

Total assets

$

2,248,975

$

2,323,727

LIABILITIES AND EQUITY

 

  

 

  

Accounts payable

$

81,149

$

103,482

Accrued expenses

 

136,660

 

144,997

Deferred revenue

 

916,679

 

924,789

Current operating lease liabilities

 

9,414

 

10,055

Current debt

50,625

 

50,625

Other current liabilities

 

133,527

 

118,444

Total current liabilities

 

1,328,054

 

1,352,392

Deferred revenue

 

95,443

 

97,167

Long-term operating lease liabilities

 

100,422

 

103,242

Long-term debt

591,714

 

603,488

Other liabilities

 

20,676

 

20,874

Total liabilities

 

2,136,309

 

2,177,163

Common stock, $0.01 par value; authorized, 200,000 shares; issued, 24,612 shares and 24,585 shares at March 31, 2022 and December 31, 2021, respectively

246

246

Additional paid-in-capital

269,847

266,775

Accumulated deficit

(54,365)

(55,383)

Accumulated other comprehensive loss

 

(103,062)

 

(65,074)

Total equity

 

112,666

 

146,564

Total liabilities and equity

$

2,248,975

$

2,323,727

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Loyalty Ventures Inc.

April 28, 2022

LOYALTY VENTURES INC.

UNAUDITED CONDENSED CONSOLIDATED AND COMBINED STATEMENTS OF CASH FLOWS

March 31, 

2022

2021

(in thousands)

CASH FLOWS FROM OPERATING ACTIVITIES:

  

  

Net income

$

1,018

$

19,038

Adjustments to reconcile net income to net cash (used in) provided by operating activities:

 

 

Depreciation and amortization

 

9,413

 

9,034

Deferred income tax benefit

 

(1,054)

 

(478)

Non-cash stock compensation

 

2,328

 

1,853

Change in other operating assets and liabilities

 

(43,789)

 

62,488

Other

 

3,366

 

4,922

Net cash (used in) provided by operating activities

 

(28,718)

 

96,857

CASH FLOWS FROM INVESTING ACTIVITIES:

 

  

 

  

Change in redemption settlement assets, restricted

 

(8,324)

 

(13,109)

Capital expenditures

 

(3,698)

 

(4,548)

Distributions from investment in unconsolidated subsidiary – related party

 

 

795

Net cash used in investing activities

 

(12,022)

 

(16,862)

CASH FLOWS FROM FINANCING ACTIVITIES:

 

  

 

  

Borrowings under debt agreements

1,000

 

Repayments of borrowings

(13,656)

 

Dividends paid to former Parent

(120,000)

Net transfers to former Parent

(3,514)

Net transfers from former Parent for Separation-related transactions

 

1,569

 

Other

 

(579)

 

Net cash used in financing activities

 

(11,666)

 

(123,514)

Effect of exchange rate changes on cash, cash equivalents and restricted cash

 

(662)

 

(1,571)

Change in cash, cash equivalents and restricted cash

 

(53,068)

 

(45,090)

Cash, cash equivalents and restricted cash at beginning of year

 

232,602

 

337,525

Cash, cash equivalents and restricted cash at end of year

$

179,534

$

292,435

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Loyalty Ventures Inc.

April 28, 2022

LOYALTY VENTURES INC.

UNAUDITED SUMMARY OF FINANCIAL HIGHLIGHTS

Three Months Ended March 31, 

 

    

2022

    

2021

    

% Change

 

 

(in thousands, except percentages)

Segment Revenue:

 

  

 

  

 

  

AIR MILES Reward Program

$

65,708

$

70,257

 

(6)

%

BrandLoyalty

 

89,281

 

106,297

 

(16)

Corporate/Other

 

 

Eliminations

(44)

nm*

Total

$

154,945

$

176,554

 

(12)

%

Segment Adjusted EBITDA:

 

  

 

  

 

  

AIR MILES Reward Program

$

29,405

$

36,451

 

(19)

%

BrandLoyalty

 

236

 

5,706

 

(96)

Corporate/Other

 

(4,942)

 

(3,281)

 

51

Total

$

24,699

$

38,876

 

(36)

%

Key Performance Indicators (in millions):

AIR MILES reward miles issued

1,064.7

1,111.6

(4)

%  

AIR MILES reward miles redeemed

1,057.1

739.4

43

%  

* not meaningful

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Loyalty Ventures Inc.

April 28, 2022

LOYALTY VENTURES INC.

UNAUDITED RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

Three Months Ended

March 31, 

    

2022

    

2021

(in thousands)

Adjusted EBITDA:

Net income

$

1,018

$

19,038

Loss from investment in unconsolidated subsidiary – related party, net of tax

36

Provision for income taxes

1,375

8,984

Interest expense (income), net

9,052

(69)

Depreciation and other amortization

9,125

8,595

Amortization of purchased intangibles

288

439

Stock compensation expense

2,328

1,853

Strategic transaction costs (1)

1,513

Adjusted EBITDA

$

24,699

$

38,876

(1)Represents costs associated with the separation, which were comprised of amounts associated with the employee matters agreement.

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Exhibit 99.2

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First Quarter 2022 Results 1 April 2022

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Forward - Looking Statements and Financial Measures 2 This presentation contains forward - looking statements within the meaning of Section 27A of the Securities Act of 1933, as amende d, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward - looking statements give our expectations or forecasts of future events and can generally be identified by the u se of words such as “believe,” “expect,” “anticipate,” “estimate,” “intend,” “project,” “plan,” “likely,” “may,” “should” or other words or phrases of similar import. Similarly, statements tha t d escribe our business strategy, outlook, objectives, plans, intentions or goals also are forward - looking statements. Examples of forward - looking statements include, but are not limited to, statements we make regarding, and the guidance we give with respect to, our anticipated operating or financial results and future economic conditions, including, but not limited to, changes in geopolit ica l conditions, fluctuation in currency exchange rates, market conditions and COVID - 19 or other impacts related to reduction in demand from clients, supply chain disruption with respect to our rewards, disruptions in the airline or travel industries and labor shortages due to quarantine. We believe that our expectations are based on reasonable assumptions. Forward - looking statements, however, are subject to a numb er of risks and uncertainties that could cause actual results to differ materially from the projections, anticipated results or other expectations expressed in this release, and no assurance s c an be given that our expectations will prove to have been correct. These risks and uncertainties include, but are not limited to, factors set forth in the Risk Factors section of both (1) our For m 10 - K for the most recently ended fiscal year and (2) any updates in Item 1A, or elsewhere, in our Quarterly Reports on Form 10 - Q filed for periods subsequent to such Form 10 - K or any updates thereto. O ur forward - looking statements speak only as of the date made, and we undertake no obligation, other than as required by applicable law, to update or revise any forward - looking statements, wh ether as a result of new information, subsequent events, anticipated or unanticipated circumstances or otherwise. In addition to the results presented in accordance with generally accepted accounting principles, or GAAP, we may present fin anc ial measures that are non - GAAP measures, such as adjusted EBITDA, adjusted EBITDA margin and free cash flow. Adjusted EBITDA eliminates the non - cash depreciation of tangible assets and a mortization of intangible assets, including certain intangible assets that were recognized in business combinations, and the non - cash effect of stock compensation expense. Adjusted EBITDA als o eliminates strategic transaction costs. Adjusted EBITDA margin represents adjusted EBITDA divided by revenue. Free cash flow represents cash flow from operations less capital expend itu res. Free cash flow is a liquidity measure used by management to evaluate the amount of cash available for debt repayment, acquisition opportunities, and other corporate purposes. No reco nci liation is provided with respect to forward looking annual guidance as we cannot reliably predict all necessary components or their impact to reconcile these non - GAAP measures without unreasonable effort. The events necessitating a non - GAAP adjustment are inherently unpredictable and may have a material impact on our future results. Reconciliations to the most directly comparabl e G AAP financial measures are available in our earnings press release, which is posted in the Press Releases section on our website (www.loyaltyventures.com).

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Q1 2022 Key Takeaways 3 Performance Update • AIR MILES® Reward Program redemption patterns begin normalization with return of travel • BrandLoyalty is leveraging supply chain alternatives to deliver campaigns reliably in 2022 Strategic Priorities in 2022 to Drive Long - Term Growth • Improve consumer experience • Accelerate digital innovation • Enhance data and analytics capabilities New Leadership at AIR MILES Reward Program • Joining as President on May 2, 2022, Shawn Stewart has a track record of leveraging consumer and shopper data enabling personalization to strengthen and grow customer relationships • CTO Rick Neuman has experience driving large scale digital transformation and efficiently delivering tools to enhance data analytics

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Q1 2022 Summary of Financial Results 4 Notes: 1. Adj. EBITDA excludes strategic transaction costs Revenue Adj. EBITDA (1) Net Income / Diluted EPS • Revenue declined by $22MM, including $17MM at BrandLoyalty, driven by the timing of programs in market and the reward mix of those programs, and $5MM at the AIR MILES Reward Program related to investment in the rewards value proposition • Adj. EBITDA declined $14MM, including $7MM at the AIR MILES Reward Program related to the revenue decline as well as key hires in the business development and technology teams, and $5MM at BrandLoyalty related to the flow - through from program timing • Net Income and Diluted EPS include the effects noted above and the impact of a full quarter of interest expense $155MM $25MM $1MM $0.04

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President – Shawn Stewart • Brings deep expertise in consumer insights, customer, loyalty, digital marketing, and analytics across multiple verticals to his new position • Most recently served as Senior Vice President, Customer at Canadian Tire Corporation, Limited, where he led the team responsible for enterprise loyalty, digital marketing, customer analytics and personalization, including the team that built and grew the Triangle Rewards loyalty program AIR MILES Reward Program Leadership Update 5 CTO – Rick Neuman • Responsible for development, implementation and oversight of the program’s technology strategy and roadmap • Most recently served as Chief Product & Technology Officer at Flipp , a retail technology firm • Formerly Executive Vice President eCommerce & Chief Technology Officer at Walmart Canada, where he was responsible for their digital transformation Affirming Digital / Data - First Strategy • New leadership reinforces the commitment to innovating for our Sponsors/Collectors and maximizing the unique data asset we have in Canada

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AIR MILES reward miles issued > 100B 30 th Anniversary Celebration • Planned summer promotion with exclusive Sponsor offers and extras to engage current and attract new Collectors to the Program AIR MILES Reward Program Recent Developments 6 Partner Update • Renewed contract with American Express, a top 5 Sponsor • Added new brands, including Uniqlo, H&R Block and QE Home, to airmilesshops.ca, our e - commerce portal where Collectors can earn AIR MILES reward miles for shopping online > 1,000 AIR MILES card swipes per minute ~ 1,200 Average flights redeemed per day over the past 30 years

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AIR MILES Reward Program Collector Activity 7 Collector Interest • Collector interest in redeeming for travel rewards is returning: • In 1Q21, travel represented a single - digit percentage of redemptions, but that has surged to about half of all redemptions in 1Q22 • Travel page views on travel platform have nearly tripled year - over - year with strong Collector uptake of new fare and cabin classes • Top destinations in Canada include Vancouver, and internationally Collectors have strong interest in London and Las Vegas Key Messaging • AIR MILES Reward Program leveraged national marketing to generate awareness of its enhanced offering, and attract and engage younger Canadians in the Program • Media investment focused on 18 – 44 year olds across TV, social, digital and radio • AIR MILES Reward Program debuted phase one of its next - generation travel platform, and celebrated with a marketing tie - in to Canada’s Got Talent (“CGT”) • As the official travel partner of CGT, AIR MILES Reward Program will be providing CGT semi - finalists with a surprise announcement during Episode 7 on May 3 rd

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AIR MILES Reward Program Recent Performance 8 • Issuance consistent with 1Q21 after adjusting for non - renewals • Burn rate escalation driven by pent - up demand for travel as restrictions mostly abated • Redemption Settlement Assets (held in trust) fund future redemptions 1,316 1,053 1,240 1,355 1,112 1,139 1,155 1,264 1,065 76% 58% 55% 62% 67% 70% 78% 85% 99% 0% 20% 40% 60% 80% 100% 120% 140% 160% 0 200 400 600 800 1,000 1,200 1,400 1,600 1Q20 2Q20 3Q20 4Q20 1Q21 2Q21 3Q21 4Q21 1Q22 Miles Issued (in Millions) Miles Redeemed / Issued ("Burn Rate")

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AI partnership • Partnering with leading AI provider to introduce campaign - related personalized offers through clients’ e - commerce platforms beginning later this year • Personalized touch - point to supplement in - store visual marketing BrandLoyalty Recent Developments 9 Russia • BrandLoyalty is pausing operations in Russia following th e conclusion of existing campaigns • BrandLoyalty will not pitch for new business in Russia, and has stopped importing reward merchandise into the country • Our key partners and suppliers share our concern around the conflict and are aligned with our response • We estimate $16MM in lost revenue in 2022 as a result Digital Reward Campaign Model • Developing integrated campaigns where shoppers can play immersive games and have interactive experiences with beloved characters • Fully digital promotions and rewards also provide supply chain and ESG benefits

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Americas EMEA APAC BrandLoyalty Performance Update 10 • EMEA market continues to be strong • Americas and APAC expected to contribute to future growth 70% 20% 9% Q1 2022 Revenue by Geography Campaign Highlights Retailer (Figures do not total due to rounding) Rewards Supplier (1) (2) Notes: 1. Albert Heijn 2. Izumi Japan

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Strategic Investments in 2022 11 1 Engaging Consumers 2 Digital Innovation 3 Data & Analytics Capabilities

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Engaging Consumers – Travel Platform Evolution 12 Greatly expand self - serve options and offer multiple forms of payment, redefining AIR MILES reward miles as a currency Offer best - in - class booking experience and serve as single source for all travel with an end - to - end customer experience Add strategic partnerships to ( i ) help advertisers reach a receptive audience and (ii) secure preferred inventory / pricing Inspiring the desire for travel with personalized offers and experiences based on observed and inferred behaviors “Double dip” like never before , earning AIR MILES reward miles and airline loyalty rewards on eligible fares Increased number of airlines from 14 to 65 (and growing) Moved from economy cabin only on limited routes to all cabin classes on any partner route Restructured pricing , from prior zone - based method to dynamic, market - based approach including sales / promotions Increasing Choice and Flexibility & Adding Value Throughout the Entire Customer Journey Through Today 2H22 and Beyond

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Core Platform Development How mobile Collectors interact with the program • Features and functionality • Look and feel • Security and accessibility Content Optimization Why mobile Collectors interact with the program • Personalized offers • Task - oriented journeys • Useful and relevant experiences Digital Innovation – Collector Experience on Mobile 13 1 2 dashboard Personalized offer Relevant experience Note: all creative is representational only

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Data & Analytics Capabilities 14 We’ve partnered with a leading Data Sharing Technology provider, Snowflake , to develop a secure, easy - to - use platform: ✓ Enable data sharing via the Web ✓ Secure Access using single - sign - on ✓ Permissions - based access ✓ Fast & Automated data loading ✓ Data Monitoring ✓ User Admin portals AIR MILES Data Sharing Platform Single - Sign - On (SSO) Security Automated Data Sharing Platform Fast data loads, scalable access

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Personalization in Action 15 Data & Capabilities Delivery Channels Online Offline Collected, Inferred & Created Data Analytics & Machine Learning Email Text App Website Signals & Insights Health - Conscious Consumer New Dad Digitally Engaged Recently Moved +$200 Category Spend Identify Collector - level behaviors and purchase intent Combine unique data with proprietary intelligence Real - Time Customer Data Platform Help Sponsors/Partners communicate with personalized messages and curated offers 360 ° view of the Collector to serve as the foundation for personalization at scale Utilizing Adobe for real - time personalization at scale, working towards fully automated, data driven customer lifecycle management for Collectors across all digital properties

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Financial Results – Consolidated 16 ($ in millions, except per share) Q1 22 Q1 21 % Change Total revenue $154.9 $176.6 (12%) Total operating expenses $143.5 $148.6 (3%) Operating income $11.4 $28.0 (59%) Interest expense (income), net 9.1 (0.1) nm Income before income taxes and loss from investment in unconsolidated subsidiary $2.4 $28.1 nm Provision for income taxes $1.4 $9.0 nm Loss from investment in unconsolidated subsidiary – related party, net of tax - 0.0 nm Net income $1.0 $19.0 nm Net income per share - Diluted $0.04 $0.77 nm Weighted average shares - Diluted 24.6 24.6

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Financial Results – Segments 17 Notes: 1. In accordance with ASC 606, “Revenue from contracts with customers”, redemption revenue for our AIR MILES Reward Program is p res ented net of cost of redemptions ($ in millions) Q1 22 Q1 21 % Change AIR MILES Reward Program (1) $65.7 $70.3 (6%) BrandLoyalty 89.3 106.3 (16%) Eliminations (0.0) - nm Total Revenue $154.9 $176.6 (12%) AIR MILES Reward Program $29.4 $36.5 (19%) BrandLoyalty 0.2 5.7 (96%) Corporate/Other (4.9) (3.3) 51% Total Adj. EBITDA $24.7 $38.9 (36%)

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166 2021A 2022E 2022 Consolidated Outlook 18 Revenue $MM Adj. EBITDA $MM Key Commentary Based on our current visibility, and due to developments in Russia, we expect full year 2022 revenue to be at the lower end of our $775 million to $800 million guidance range Adj. EBITDA and CapEx investments for Collector value proposition enhancement More contracted revenue today vs year ago, but higher costs due to advance block purchases of shipping availability and use of different manufacturing sites/modalities ~150 – 158 735 2021A 2022E ~775 – 800

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Liquidity & Capital Structure 19 Cash and Cash Equivalents (1) Revolver Capacity (2) Liquidity $140 $134 $274 Net Debt at 3/31/22 $523 Gross Debt at 3/31/22 $662 Less: Cash at 3/31/22 ($140) Q1 2022 Liquidity Capital Structure ($ in millions) ($ in millions, figures do not total due to rounding) 2022 Free Cash Flow priorities include reinvesting in the business, deleveraging and tuck - in M&A Gross Debt at 12/31/21 $675 Less: Q1 Debt Reduction ($13) Notes: 1. Excludes restricted cash in Redemption Settlement Assets 2. $150MM revolver; no amounts borrowed, but adjusted for letters of credit

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New AIR MILES Reward Program leadership team established and committed to executing existing strategic priorities Targeted investments are underway with a near - term focus on AIR MILES Reward Program Positioning Loyalty Ventures for growth in 2023 and beyond Summary 20 1 2 3

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APPENDIX

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2022 Taxes 22 • AIR MILES Reward Program and BrandLoyalty tax rates estimated to range from ~25% to ~28% • Currently non - deductible U.S. expenses, including interest expense, corporate overhead and Canadian withholding taxes will negatively impact our effective tax rate • Estimated cash taxes of ~$30MM to $37MM