February 22, 2012 21:17 ET

Aimia Announces Renewal of Contract With Anchor Coalition Partner Sainsbury's in the UK and the Extension of its Contract With HSBC in the Middle East Region

MONTREAL, QUEBEC--(Marketwire - Feb. 22, 2012) - Aimia (TSX:AIM) today announced that it has signed a 7 year contract renewing its agreement with founding coalition partner Sainsbury's for its participation in Nectar, the UK's largest loyalty coalition program.

"We are extremely pleased to renew our longstanding partnership with Sainsbury's," said Rupert Duchesne, President and Chief Executive Officer of Aimia. "This agreement results in a win-win situation for all parties. It provides Nectar with the platform to continue to deliver strong profitable growth for the program and its coalition partners. It enables Sainsbury's to continue to benefit from a unique differentiator in the highly competitive UK market by inspiring loyalty, improving its insight, and providing Nectar's 18.5 million members with an even more rewarding Nectar experience."

As part of this renewal, Sainsbury's is extending its commitment to the program to secure an even higher level of engagement and value for the millions of Nectar members who regularly shop in Sainsbury's. Aimia is reducing its estimate of the long term breakage rate for the Nectar program to reflect these higher levels of engagement. On a go forward annual basis, the net impact of the renewed commercial terms and the reduction in the breakage rate will be accretive to Aimia's Adjusted EBITDA and free cash flow.

Sainsbury's will repay the £40 million promissory note due to Nectar on July 1, 2012. The £40 million will form part of Nectar's redemption reserve, replacing the loan note.

Justin King, Chief Executive of Sainsbury's said: "We're delighted to re-affirm our commitment to the UK's largest and most popular loyalty program. Nectar has played an important role in our continued success. Our unrivalled insight into shopper behaviour means we can help customers by giving them offers and promotions on the items they buy every day, while the scheme provides numerous ways to collect and redeem."

Agreement signed with HSBC for the extension of its participation in the Air Miles program in the Middle East Region

Aimia also announced today that it has extended its agreement with anchor partner HSBC for its participation in the Air Miles program in the Middle East.

David Johnston, President and Chief Executive Officer of Aimia's European & Middle East business said, "We are delighted that our joint venture partner, HSBC, has extended the agreement for its participation in the Air Miles Program. HSBC's ongoing commitment and increased investment in the program and its customers reflects the strength of the Air Miles program, as the leading coalition program in the region."

With the signing of the extension agreement, HSBC will be increasing its investment in the Air Miles program to provide its customers with an improved value proposition for the miles they currently hold as well as working with Air Miles to increase the value proposition on all new miles issued.

Notwithstanding that Aimia will reduce its estimate of the long term breakage rate for the Air Miles program to reflect these higher levels of engagement, the net impact of the revised commercial terms and the reduction in the breakage rate will be modestly accretive on an on-going basis.

Marcus Cleverton, HSBC Head of Cards for the MENA region said, "One of HSBC's key priorities is to offer our customers the best value from a loyalty program. For our Premier customers, who lead a global lifestyle, a world-class travel rewards programme is an integral value-add. By extending our agreement in the Air Miles program, HSBC will continue to benefit from a strong market differentiator, whilst our increased investment will ensure that our Air Miles proposition is made more rewarding for our customers."

Accounting impact of the revision to breakage rate estimates

The higher levels of engagement in the Nectar and Air Miles Middle East programs will result in changes to Aimia's breakage rate estimates in place for each. Aimia will record a one time non-cash cumulative reduction to revenue of $136 million in its 2011 fourth quarter results.

In addition, the adjustment to the breakage estimates and related contract renewals will result in a net full year $10 million charge to Adjusted EBITDA recorded in the fourth quarter 2011.

About Aimia

Groupe Aeroplan Inc., doing business as Aimia ("Aimia"), is a global leader in loyalty management. Aimia's unique capabilities include proven expertise in delivering proprietary loyalty services, launching and managing coalition loyalty programs, creating value through loyalty analytics and driving innovation in the emerging digital and mobile spaces. Aimia owns and operates Aeroplan, Canada's premier coalition loyalty program and Nectar, the United Kingdom's largest coalition loyalty program. In addition, Aimia has majority equity positions in Air Miles Middle East and Nectar Italia as well as a minority position in Club Premier, Mexico's leading coalition loyalty program and Cardlytics, a US-based private company operating in merchant-funded transaction-driven marketing for electronic banking.

Aimia is a Canadian public company listed on the Toronto Stock Exchange (TSX:AIM) and has over 3,800 employees in more than 20 countries around the world. For more information about Aimia, please visit

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