Colabor Group Inc. · OTC:COLFF
Colabor — Q2 2024 Earnings Presentation
32 slides from Colabor's earnings presentation, July 2024
Slide 1: Investor Presentation Colabor Group Inc.
INVESTOR PRESENTATION COLABOR GROUP INC. (TSX: GCL) July 2024 Presented by Louis Frenette, President & CEO And Pierre Blanchette, SVP, CFO 1
Slide 2: Forward Looking Statement Disclaimer
FORWARD LOOKING STATEMENT DISCLAIMER This document is for informational purposes only and does not constitute an offer to sell or a solicitation of an offer to buy any securities of Colabor Group Inc. and has not been prepared for delivery to, and review by, prospective investors in order to assist
Slide 3: The New Colabor
THE NEW COLABOR • Executive Summary • About Colabor • New Leadership • Experienced Board 3
Slide 4: Executive Summary: Our Transformation
E X E C U T I V E S U M M A RY • O U R T R A N S F O R M AT I O N DELIVERING ON OUR PROMISES THE OPPORTUNITY AHEAD Phase I Phase II In 2019, a new management team was hired to transform the business. We are now Our distribution platform is shifting to accelerate growth with significant opportunities
Slide 5: About Colabor
ABOUT Founded in 1962, Colabor is the largest Quebec based distributor and wholesaler of food and related COLABOR products, serving the hotel, restaurant and institutional markets « HRI » in Québec and New Brunswick. Our Mission: “To be the local ingredient for the success of all catering artisans.
Slide 6: New Leadership: Deep Industry Expertise
NEW LEADERSHIP • DEEP INDUSTRY EXPERTISE LOUIS FRENETTE PIERRE BLANCHETTE President and CEO, Joined in 2019 SVP and CFO, Joined in 2021 Former President & CEO Parmalat Canada, Bonduelle Former SVP at Fiera Capital, North America and Danone Canada Global Treasury and Taxation BERNARD CARRIER MARIE-FR
Slide 7: Renewed Governance: Business Leaders
R E N E W E D G OV E R N A N C E • B U S I N E S S L E A D E R S DANIÈLE BERGERON WARREN WHITE MARC BEAUCHAMP Chair of the Corporate JEAN GATTUSO Chairman Member of the HR Committee Governance committee and Member of the HR member of the HR Committee Committee Previously Senior Vice President, Globa
Slide 8: Successful Transformation
SUCCESFUL TRANSFORMATION • Successfully Completed Phase I of our Turnaround • Improved Product & Customer Mix • Consistent Improvements to Gross Margin 8
Slide 9: Successfully Completed Phase I of Our Turnaround
S U C C E S S F U L LY C O M P L E T E D P H A S E I OF O U R T U R N A R O U N D 2019-2023 Building Stronger Delivered Results Foundations ADJ. EBITDA(1) (IN MILLIONS AND % OF SALES) LEVERAGE(2)(3) NEW LEADERSHIP $37.6 $37.3 • Exited unprofitable contracts 5,8 • Sold unprofitable businesses • Optim
Slide 10: Improved Product & Customer Mix
I M P R OV E D • P R O D U C T & C U S T O M E R M I X Differentiated Channel Offering Diversification Broadline Specialty Wholesale 10,000 SKUs Seafood & Meat 26% (food and non-food) (“center-of-plate”) Restaurants • Optimized SKUs and mix of • Upscaled premium white table- 38% national brands clot
Slide 11: Consistent Improvements
C O N S I S T E N T I M P R OV E M E N T S Sustained Growth Sustained revenue growth & gross margin improvements, with a slight slowdown since the beginning of the fiscal year 2024 25,0% $ 659 $ 653 $700,0 24,0% $ 574 $600,0 23,0% $ 461 $ 476 $500,0 22,0% 21,0% $400,0 20,0% 19,0% $300,0 18,7% 18,8%
Slide 12: Foodservice Opportunity
FOODSERVICE OPPORTUNITY • Canadian Foodservice, a large market opportunity • We are #3 in Quebec in a fragmented landscape • Room to Grow • Means to Grow 12
Slide 13: In a Stable and Growing Market: Foodservice
I N A S TA B L E A N D G R O W I N G M A R K E T • F O O D S E R V I C E Foodservice is gaining share of stomach (Billions $) $250,0 Canadians are increasingly eating out $200,0 4.5% CAGR $110,0 Food-away-from-home $150,0 $62,0 $100,0 3.0% CAGR Food-at-home $126,6 $50,0 $86,0 $- 2010 2023 Retail Foo
Slide 14: Foodservice: Large Market Opportunity
F O O D S E R V I C E • LARGE MARKET OPPORTUNITY 110.2B CANADIAN “HRI” MARKET(1) DISTRIBUTOR MARKET(2) (Dollars purchased by the HRI market from distributors) (2023 expected dollars spent at point-of-sale by consumers) RESTAURANT $89.8 $20.5 LANDSCAPE Billion Billion $16.1B • 83,519 Restaurants(3) •
Slide 15: Currently #3 in Quebec in a Fragmented Landscape
C U R R E N T LY # 3 I N Q U E B E C • IN A FRAGMENTED LANDSCAPE Large International Other Quebec Broadline COLABOR Distributors Cash & Carry 53% 11% 36% • GFS #3 in Quebec • Hundreds of regional distributors Market Share(1) • SYSCO • Important distributor in Eastern • Cash and carry Quebec • Enteri
Slide 16: New Market to Tap Into: Western Quebec
N E W M A R K E T TO TA P I N TO • W E S T E R N Q U E B E C $4.5B HRI Addressable Market Reach prior to 2024: Opportunity entering 2024: 30% of the HRI Market 90% of the HRI Market Significant Specialty Broadline Distributor in Distributor in Western Quebec Eastern Québec & Wholesaler Quebec market
Slide 17: Room to Grow: New Distribution Platform
R O O M TO G R O W New Distribution Our Strategy: Platform Capture the significant growth potential currently available to us in Quebec alone . 1. Develop our distribution activities in Western Quebec ORGANIC • Hired sales and marketing team in 2020. Paying-off. • Moved at the end of 2023 to a new h
Slide 18: Recent M&A: Small Bites
RECENT M&A: SMALL BITES Successful integrations and value creation Certain Assets of GROUPE RESTO-ACHATS INC. Certain Assets of BEN DESHAIES INC. GROUPE BEAUDRY INC. Acquired April 4, 2022 Acquired April 22, 2022 Acquired March 15, 2024 • $4.5M purchase price(1) • $0.5M acquisition of certain assets
Slide 19: Looking Ahead: Strategic Initiatives
LO O K I N G A H E A D : S T R AT E G I C I N I T I AT I V E S • Strategic Initiatives for Phase II (2024- 2025) • Key Piece: New Hybrid Strategic Facility • ESG Priorities 19
Slide 20: 2024-2025 Strategic Initiatives (Phase II)
2 0 2 4 - 2 0 2 5 • S T R AT E G I C I N I T I AT I V E S ( P H A S E I I ) P R O F I TA B I L I T Y GROWTH PEOPLE BRAND G E N E R AT E FROM 30% TO 90% AT T R A C T, R E TA I N RENEW, P R O F I TAB L E G R O W T H O F P O P U L AT I O N AND DEVELOP REFRESH • Continue optimizing processes, • Organic
Slide 21: Move Completed: New Hybrid Facility
M OV E C O M P L E T E D • N E W H Y B R I D FA C I L I T Y HIGHLY SUCCESFUL ENDEAVOR: MOVE COMPLETED ON TIME AND ON BUDGET BY END OF FY 2023 PROVIDES A HIGHLY EFFICIENT BASE FROM WHICH TO GROW OUR DISTRIBUTION REACH TO IMPROVING OUR PERFORMANCE 90% OF THE HRI MARKET IN QUEBEC • Highly efficient hyb
Slide 22: ESG Priorities
ESG PRIORITIES SOCIAL / ENVIRONMENT GOVERNANCE • Moved into a new to be certified LEED / Net Zero target facility. • Code of conduct (employees, suppliers, stakeholders). • Support local agriculture / supply chain. • Improving health and safety track record. • 2,000 farmer products. • Would like to
Slide 23: Recent Financial Results
RECENT FINANCIAL RESULTS • Q2 2024 Results • Why Invest • Share Information 23
Slide 24: Q2 2024 Sales and Profitability
Q2 2024 SALES AND PROFITABILITY -1.8% DISTRIBUTION SALES UP BY 0.7% $164.2M $161.3M WHOLESALE SALES DOWN BY 8.4% • Higher distribution volume; CONSOLIDATED • New territories; SALES • Impact of inflation estimated at 1.5%; • Assets acquired in March 2024; • Lower sales volume from restaurant and reta
Slide 25: Q2 2024 Net Earnings and Cash Flow Trend
Q2 2024 NET EARNINGS AND CASH FLOW TREND Net earnings decreased to $1.7M ($0.02 per share), from a net earnings of $2.3M ($0.02 per share) NET EARNINGS • Increase in EBITDA (1); • Increase in depreciation and amortization, and finance expenses related to the increase in lease obligations, particular
Slide 26: Q2 2024 Net Debt and Leverage Ratio Trend
Q2 2024 NET DEBT AND LEVERAGE RATIO TREND -$5.5M $61.5M $56.0M NET DEBT (1) Net debt decreased to $55.0M, from $61.5M at Q4 2023 • Increase of cash; • Repayments of credit facility of $1.3M. Q4 2023 Q2 2024 2.4x 2.1x Leverage ratio decreased to 2.1x LEVERAGE RATIO(2) • Decrease of net debt. Q4 2023
Slide 27: Why Invest
WHY INVEST GROWTH PROFITABILITY FREE STRONG MACRO OPPORTUNITIES IMPROVEMENTS CASHFLOWS BALANCE SHEET ENVIRONMENT New capacity to reach $37.3M Adj. EBITDA(1) -$5.3M 90% of addressable Resilient and diversified 2.1x Leverage(2) foodservice customers in 5.7% of sales For the last twelve- business model
Slide 28: Share Information (TSX: GCL)
SHARE INFORMATION (TSX: GCL) LAST 52 WEEKS STOCK PRICE (as at July $1.27 22, 2024) 52-week low-high $0.88 - $1.33 Number of shares issued 101,986,464 and outstanding Average volume (30 days) 35k Market capitalization $129.5M Institutional and ≈ 40% management ownership Analyst coverage: Cormark Secu
Slide 29: Appendix
APPENDIX 29
Slide 30: Supplemental Financial Information
SUPPLEMENTAL FINANCIAL INFORMATION 12-week period 24-week period 52-week period 53-week period (in thousands of dollars, except percentages, per share data and 2024 2023 2024 2023 2023 2022 financial leverage ratio) Sales from continuing operations 161,278 164,186 292,478 298,109 659,129 574,071 (1)
Slide 31: Non-IFRS Measures
NON-IFRS MEASURES 52-week period Second quarter Fiscal Year Reconciliation of Net Earnings (Loss) to Adjusted EBITDA 2018(1) 2024 2023 2023 2022 (in thousands of dollars) 52 weeks 12-weeks 12-weeks 52-weeks 53-weeks Net (loss) earnings from continuing operations (4,387) 1,679 2,314 6,047 4,551 Incom
Slide 32: Contact Details
1601 René-Descartes Street, Suite 103 Saint-Bruno-de-Montarville (Québec) J3V 0A6 Canada Phone : 450 449-4911 Fax : 450 449-6180 investors@colabor.com 32