Alliance Data’s LoyaltyOne Business Segment Fell in 4Q15



Revenues fell 9% YoY

Alliance Data’s (ADS) LoyaltyOne business segment’s revenues fell 9% YoY (year-over-year) from $398 million in 4Q14 to $364 million in 4Q15. Adjusted EBITDA (earnings before interest, tax, depreciation, and amortization) also fell 23% from $96 million to $73 million in the same period. On a constant currency basis, however, the revenues increased 6% from $398 million to $421 million YoY. A strong dollar (UUP) has negatively impacted revenues of several tech firms including Apple (AAPL), Microsoft (MSFT), and IBM (IBM).

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LoyaltyOne’s AIR MILES saw a 4% rise in its “reward miles” despite a difficult Canadian (EWC) economy. Ed Heffernan, president and chief executive officer of Alliance Data, commented, “A shift in sponsor mix, which lowered the average price per mile issued, coupled with increased support of our sponsors’ promotional programs pressured Loyalty One’s financial results as AIR MILES revenue increased 1 percent, while adjusted EBITDA dropped 6 percent on a constant currency basis.”

BrandLoyalty saw revenues rise 31% and adjusted EBITDA rise 15% on a constant currency basis.

Overview of the segment

LoyaltyOne is one of Alliance Data Systems’ business segments. Alliance has built its expertise through a successful coalition program where it aims to bring together important retailers such as local pharmacies, gas stations, and others under one loyalty program where consumers can earn points and rewards for their everyday purchases.

About 66% of Canadian households actively participate in the AIR MILES reward program, and it has been named one of the most influential brands in Canada.


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