Lassonde Industries, Inc. Class A · TSX:LAS.A
Lassonde Industries, Inc. Class A — Shareholder Meeting (May 2017)
40 slides from Lassonde Industries, Inc. Class A's shareholder meeting presentation, May 16, 2017
Slide 1: Annual General Meeting: Financial Results for Fiscal 2016 and First Quarter 2017
LASSONDE INDUSTRIES INC. ANNUAL GENERAL MEETING Financial Results for Fiscal 2016 and First Quarter 2017 May 16, 2017
Slide 2: Forward-Looking Statements
FORWARD-LOOKING STATEMENTS Certain statements made in this presentation, including, but not limited to, statements regarding the prospects of the industry, plans, financial position, and business strategy of the Company may constitute forward-looking statements within the meaning of Canadian securit
Slide 3: Highlights – Fiscal 2016: Earnings
HIGHLIGHTS–FISCAL 2016 Earnings In millions of $ Years ended (except EPS) December 31 %Δ %Δ 2016 2015 2014 16 vs 15 15 vs 14 Sales 1,509.5 1,449.3 1,181.0 4.2% 22.7% Operating profit 126.2 111.3 88.4 13.4% 25.9% Operating profit/Sales 8.4% 7.7% 7.5% Profit 72.2 60.2 47.4 19.8% 27.0% Profit attributa
Slide 4: Highlights – Fiscal 2016: Earnings (cont'd)
HIGHLIGHTS–FISCAL 2016 Earnings (cont’d) ● Sales of $1,509.5M, $60.2M vs $1,449.3M in 2015: ● $53.6M increase in sales of private label products; ● Favourable foreign exchange impact of $33.0M; and a ● $28.8M decrease in the sales volume of national brands, primarily in Canada. ● Operating profit
Slide 5: Highlights – Fiscal 2016: Earnings (cont'd)
HIGHLIGHTS–FISCAL 2016 Earnings (cont’d) ● Financial expenses of $21.0M vs $27.8M in 2015, by $6.8M: ● Smaller change in the fair value of participating loans arising from the settlement of these loans in May 2016; ● Lower interest expense on the U.S. credit facilities, partly offset by… ● A $1.3M
Slide 6: Consolidated Statements of Financial Position
HIGHLIGHTS–FISCAL 2016 Consolidated Statements of Financial Position In millions of $ As at December 31 %Δ %Δ 2016 2015 2014 16 vs 15 15 vs 14 Non-cash working capital 169.5 190.6 178.0 -11.1% 7.1% Property, plant and equipment 268.8 271.3 251.8 -0.9% 7.8% Total assets 1,103.6 1,143.8 1,016.7 -3.5%
Slide 7: Free Cash Flow Analysis
HIGHLIGHTS–FISCAL 2016 Free Cash Flow Analysis In m illions of $ Years ended December 31 Variance 2016 2015 2016-2015 Free cash flow Profit 72.2 60.2 12.0 Adjustments Amortization and Depreciation 44.6 42.6 2.0 Pension plans, income tax and other 7.6 7.3 0.3 Change in non-cash working capital 23.0 6
Slide 8: Highlights – First Quarter 2017: Earnings
HIGHLIGHTS–FIRST QUARTER 2017 Earnings In millions of $ (except EPS) First Quarters ended April 1 April 2 %Δ $Δ 2017 2016 17 vs 16 17 vs 16 Sales 370.7 386.5 -4.1% (15.8) Operating profit 23.7 27.4 -13.7% (3.7) Operating profit/Sales 6.4% 7.1% Profit attributable to shareholders 13.1 13.0 1.0% 0.1 E
Slide 9: Highlights – First Quarter 2017: Earnings (cont'd)
HIGHLIGHTS–FIRST QUARTER 2017 Earnings (cont’d) ● Sales of $370.7M, $15.8M from $386.5M in 2016: ● Excluding an $8.3M unfavourable foreign exchange impact, sales decreased by $7.5M (1.9%), mainly due to: – An $11.0M decrease in the sales volume of national brands… – Partly offset by a $4.7M increa
Slide 10: Highlights – First Quarter 2017: Earnings (cont'd)
HIGHLIGHTS–FIRST QUARTER 2017 Earnings (cont’d) ● Financial expenses of $3.3M vs $5.7M in 2016, $2.4M: ● A $1.7M decrease in interest expense arising from a lower interest rate on LPC’s term loan ($0.9M) and from a reduction in indebtedness ($0.8M); ● A $0.6M decrease in the amortization of financ
Slide 11: Dividends and Outlook
DIVIDENDS AND OUTLOOK FISCAL 2017 ● Dividend: ● Quarterly dividend of $0.61 per share (payable on June 15 for Q1); ● Up 19.6% from 2016; ● On an annualized basis, represents approximately 25% of 2016 profit attributable to shareholders. ● Outlook: ● The Company posted sales growth of 4.2% in 2016. E
Slide 12: Actions that bear fruit
LASSONDE INDUSTRIES INC. Actions that bear fruit
Slide 13: Overview
LASSONDE INDUSTRIES INC. Overview 2016 Sales: $1,509.5 million Cash flows from operating activities: $147.4 million Lassonde Industries Inc. develops, manufactures, and markets distinctive food products. A. Lassonde Inc. Lassonde Arista Wines Lassonde Pappas Apple & Eve, LLC Specialties Inc. & Compa
Slide 14: Geographic sales distribution
LASSONDE INDUSTRIES INC. Geographic sales distribution In CA$M $1,600 $1,400 $1,200 58% $1,000 $800 $600 6% $400 41% 92% $200 $0 2010 2011 2012 2013 2014 2015 2016 Canada United States Other N.B.: The year 2011 includes 4 and a half months of operations for Lassonde Pappas and the year 2014 includes
Slide 15: Juice – a product that has stood the test of time
LASSONDE INDUSTRIES INC. Juice – a product that has stood the test of time HUMANS HAVE BEEN PRESSING FRUIT FOR THOUSANDS OF YEARS 15
Slide 16: The benefits of 100% juice: 59% of Canadians
LASSONDE INDUSTRIES INC. The benefits of 100% juice CANADIANS DO NOT EAT ENOUGH FRUITS AND VEGETABLES Even when 100% juice is included, 59% OF CANADIANS eat less than 5 servings of fruit and vegetables per day.1 1. Statistics Canada. Fruit and vegetable consumption, 2013. 16
Slide 17: The benefits of 100% juice: what is one serving
LASSONDE INDUSTRIES INC. The benefits of 100% juice 2 WHAT IS ONE SERVING OF FRUIT AND VEGETABLES? 1/2 Cup 1 Medium 1/2 Cup 1/2 Fruit (125 mL) apple, orange carrots, peppers avocado or 100% fruit or or banana. or tomatoes. mango. vegetable juice. 2. Health Canada. “Eating well with Canada’s Food Gui
Slide 18: The benefits of 100% juice: daily liquids
LASSONDE INDUSTRIES INC. The benefits of 100% juice IN CANADA AND THE UNITED STATES WE MEET BETWEEN 4.0 AND 6.6% OF OUR DAILY REQUIREMENT OF LIQUIDS WITH JUICE. = 165 mL of juice/day Less than 2 portions of fruit and = 100 mL of juice/day vegetables/day The human body loses 2.5 L of fluids per day 1
Slide 19: Nothing is closer to fruit than 100% juice (orange)
LASSONDE INDUSTRIES INC. The benefits of 100% juice NOTHING IS CLOSER TO FRUIT THAN 100% JUICE NUTRIENT UNIT ORANGE 100 g ORANGE JUICE 100 g Proximates Water g 86.75 87.22 Energy kcal 47 49 Protein g 0.94 0.68 Total lipid (fat) g 0.12 0.12 Carbohydrate g 11.75 11.54 Fiber g 2.4 0.3 Sugars g 9.35 8.3
Slide 20: Nothing is closer to fruit than 100% juice (apple)
LASSONDE INDUSTRIES INC. The benefits of 100% juice NOTHING IS CLOSER TO FRUIT THAN 100% JUICE NUTRIENT UNIT APPLE 100 g APPLE JUICE 100 g Proximates Water g 85.56 88.24 Energy kcal 52 46 Protein g 0.26 0.10 Total lipid (fat) g 0.17 0.13 Carbohydrate g 13.81 11.3 Fiber g 2.4 0.2 Sugars g 10.39 9.62
Slide 21: A juice is not the same as a soft drink
LASSONDE INDUSTRIES INC. The benefits of 100% juice A JUICE IS NOT THE SAME AS A SOFT DRINK Water Vitamin C Carbonated Water Protein Thiamin Glucose-Fructose Lipids Riboflavin Sugar Carbohydrate Niacin Caramel Color Fiber Vitamins B6 Phosphoric acid Sugars Folate, DFE Caffeine Minerals Vitamin A Cit
Slide 22: 100% fruit and vegetable juice is a nutrient powerhouse
LASSONDE INDUSTRIES INC. The benefits of 100% juice 3 100% FRUIT & VEGETABLE JUICE IS A NUTRIENT POWERHOUSE Across all populations, For children Adult juice consumers have 100% juice is a top contributor of aged 2 to 18, significantly higher intakes of: POTASSIUM 100% juice is the : #1 contributor o
Slide 23: 100% juice is associated with an improved diet
LASSONDE INDUSTRIES INC. The benefits of 100% juice 100% JUICE IS ASSOCIATED WITH AN IMPROVED DIET People who drink juice are shown to have BETTER QUALITY DIETS including higher intakes of whole fruit. 100% juice complements - not competes with - fruit intake. 6. C.E. O'Neil et coll. « Diet quality
Slide 24: American Food Guide
LASSONDE INDUSTRIES INC. American Food Guide ● Recognized as nutritionally similar to whole fruit, 100% fruit juice has been retained as part of the Dietary Guidelines fruit group category. ● “Recognizes one cup of 100% fruit juice as equivalent to one cup of fruit in a healthy eating pattern. ● Emp
Slide 25: Revision of the Canadian Food Guide
LASSONDE INDUSTRIES INC. Revision of the Canadian Food Guide Four in five Canadians A majority of Canadians (80%) have a good (very + (76%) believe that juice can be good) opinion of 100% juice, part of a healthy lifestyle and that compared to 15% for it would be appropriate (71%) to beverages or ne
Slide 26: Corporate Strategy
CORPORATE STRATEGY TO OFFER THE RIGHT PRODUCT IN THE RIGHT SIZE AT THE RIGHT PRICE INNOVATE - Healthy Products - Hydration TO CONSOLIDATE TO PROMOTE SUSTAINABLE DEVELOPMENT 26
Slide 27: To offer the right product in the right size at the right price
CORPORATE STRATEGY To offer the right product in the right size at the right price ● Responding to an increasingly demanding clientele; ● Be on the lookout for emerging trends; ● Aging population; ● The contribution of new generations (millennials); ● Change in the social fabric (ethnicity). ● Offer
Slide 28: Hyper-segmentation
CORPORATE STRATEGY To offer the right product in the right size at the right price WE ARE ADAPTING TO MEET CONSUMER NEEDS! Our main targets for tomorrow 1970-1979 Today Soft Drinks, Juice, Milk, Bottled water, Soft Drinks RTD tea, RTD juice, Flavoured RTD tea, Isotonics, RTD coffee, Energy Juice dri
Slide 29: Corporate Strategy: Innovation
CORPORATE STRATEGY Innovation ● Two approaches; ● Products in the Health and Wellness category; ● Hydration products. ● Lassonde has nearly 27% of the market share of innovations and 33% market share in the health and nutrition segment ($233.0 million in size). ● More than 90% of our innovations in
Slide 30: Corporate Strategy: Innovation initiatives
CORPORATE STRATEGY Innovation ● Initiatives to lower natural sugar in our products; ● Oasis HydraFruit; ● Oasis 70 Calories; ● Oasis Infusions. ● Develop products to meet hydration needs. ● Meet vitamin requirements by the addition of vitamins or vitamin products to our juices. 30
Slide 31: Corporate Strategy: Sustainable development
CORPORATE STRATEGY Sustainable development ● Fostering sustainable development: one of the cornerstones of our business strategy, integrated into our management and innovation processes, through practices that respect the environment and society; ● Clear commitment and objectives for continuous impr
Slide 32: Corporate Strategy: To consolidate
CORPORATE STRATEGY To consolidate ● Stay on the lookout for business opportunities that enable us to improve our strategic positioning in the U.S. market; ● Maintain a balance between investment in our production capacity and the use of co-packers: ● Consider the acquisition of small co-packers to r
Slide 33: Follow-up on 2016 Priorities
FOLLOW-UP ON 2016 PRIORITIES Implement long-term action plan to protect the profitability Increase of $4.9M in of our Canadian operations in a context of a persistently Canadian EBIT low Canadian dollar relative to the U.S. dollar; Maintain our organic growth through innovation and by 1.9% growth in
Slide 34: 2017 Priorities
2017 PRIORITIES ● Refine our long-term action plan to protect the profitability of our Canadian operations in a context of a persistently low Canadian dollar relative to the U.S. dollar; ● Maintain our organic growth through innovation (national brands) and by developing new solutions for our client
Slide 35: Financial Performance
LASSONDE INDUSTRIES INC. Financial Performance
Slide 36: Sales and EBITDA over five years
LASSONDE INDUSTRIES INC. 5 years Sales (in millions of $) EBITDA (in millions of $) *CAGR 5 years: 14.7% *CAGR 5 years: 15.4% 1,800.0 200.0 1,600.0 1,509.5 180.0 171.2 1,449.3 160.0 154.0 1,400.0 1,181.0 140.0 1,200.0 123.2 1,022.2 1,040.2 116.2 115.7 120.0 1,000.0 100.0 800.0 80.0 600.0 60.0 400.0
Slide 37: EBIT and EPS over five years
LASSONDE INDUSTRIES INC. 5 years (cont’d) EBIT (in millions of $) EPS (in $) *CAGR 5 years: 15.8% *CAGR 5 years: 13.6% 140.0 12.00 126.2 120.0 111.3 9.75 10.00 100.0 8.15 85.9 88.4 8.00 83.1 80.0 6.32 6.43 6.47 6.00 60.0 4.00 40.0 2.00 20.0 0.0 0.00 2012 2013 2014 2015 2016 2012 2013 2014 2015 2016
Slide 38: Stock Price
STOCK PRICE As at April 1, 2017 Book value $78.19 As at May 10, 2017 Share value $235.00 The stock price increased from $74.54 as at May 10, 2012 to $235.00 as at May 10, 2017 for a total return of 215% (CAGR – 5 years: 25.8%). DIVIDENDS PER SHARE– 5 YEARS 2012 2013 2014 2015 2016 1.23 1.48 1.59 1.6
Slide 39: Questions
LASSONDE INDUSTRIES INC. Questions
Slide 40: Annual General Meeting: Financial Results for Fiscal 2016 and First Quarter 2017
LASSONDE INDUSTRIES INC. ANNUAL GENERAL MEETING Financial Results for Fiscal 2016 and First Quarter 2017 May 16, 2017