Richards Group Inc. · TSX:RIC
Richards — Richards Packaging Income Fund — Shareholder Meeting (May 2023)
14 slides from Richards's shareholder meeting presentation, May 4, 2023
Slide 1: RPI.UN Annual General Meeting – May 4, 2023
RPI.UN Annual General Meeting – May 4, 2023 ichards Gerry Glynn – Director Enzio Di Gennaro - CFO
Slide 2: Disclaimers
DISCLAIMERS Forward-looking statements This presentation contains certain forward-looking statements regarding future growth potential, results of operations, performance and business prospects of the Fund. These statements contain management’s current beliefs and are based on information currently
Slide 3: Highlights
HIGHLIGHTS ➢ #1 packaging distributor in Canada; #3 in North America ➢ Healthcare footprint in Canada only (44% of total enterprise) ➢ Highly diversified geographically and by end customer markets ➢ Organic growth first half 8%, second half 2% - stalled with supply disruptions ➢ Adjusted EBITDA firs
Slide 4: Richards Overview – Since 1912
RICHARDS OVERVIEW – SINCE 1912 Richards continues focus in Healthcare and non-manufacturing assets • Diversified Customer Base - over 17,000 customers Revenue growth (% change) Qtr.1 Qtr.2 Qtr.3 Qtr.4 2022 • 62% Canada & 38% US Cosmetics…………………… -22.1% -16.9% -33.4% -34.1% -26.4% • Distributor of ov
Slide 5: Revenue Growth Amidst a Challenging F/X Environment
REVENUE GROWTH AMIDST A CHALLENGING F/X ENVIRONMENT Clarion contributing to Healthcare boost – cosmetics impacted by oversupply ($ millions) 600 45% 40% 500 35% 30% • CAGR on revenue of 10.2% pre coronavirus – 400 25% acquisition driven 20% 300 15% 10% • 2022 FX annual = 77¢ - Revenue FX sensitivity
Slide 6: GDP and Packaging Markets
GDP AND PACKAGING MARKETS Softer GDP, oversupply putting pressure on revenue Revenue Growth • Packaging growth outpaced RPI and GDP in 60% 2022 50% 40% • RPI higher in Healthcare and cosmetics for 30% 2020-2022 20% • Approximately 252 industry wide acquisitions 10% annually; median multiple of 8x EB
Slide 7: Adjusted EBITDA
ADJUSTED EBITDA1 Product mix and lack of fixed cost absorption impacting margin ($ millions) ($millions) 2020 2021 2022 110 Revenue $ 489.2 $ 451.4 $ 446.9 95 20% Margin 117.5 92.9 86.8 80 18% % 24.0% 20.6% 19.4% 65 Admin. Exp 19.3 21.2 21.3 16% 50 Adjusted EBITDA $ 98.3 $ 71.2 $ 64.4 35 14% % 20.1%
Slide 8: Net Income
NET INCOME Contingent consideration and Exchangeable share mark to market impact Net Income Net Income Per • Exceptional items = contingent consideration on Clarion earnout and restructuring fees - $4.30/U Unit in 2021 $5.00 • Exchangeable shares treated as debt therefore impact is mark-to-market ad
Slide 9: Distributable Cash Flow (DCF)
DISTRIBUTABLE CASH FLOW (DCF) Special distribution paid in March 2022 and March 2023 DCF Per Unit Distributable Cash Flow • Adjusted EBITDA down 50¢ in 2022 $6.00 • Interest up on borrowing for Clarion earnout $5.00 • Maintenance capital – system upgrades $4.00 • Distributable cash flow FX sensitivi
Slide 10: Distribution Policy Stress Test – Retain Capital for Opportunities
DISTRIBUTION POLICY STRESS TEST – RETAIN CAPITAL FOR OPPORTUNITIES Well positioned to weather dramatic economic downdrafts • Pro forma distributable cash reflects impact of a long- term interest rates of 5% interest , higher US taxes at risk of being imposed and a U.S./Cdn. 80¢ exchange rate • Distr
Slide 11: Investment Proposition – RPI.UN Unit Performance
INVESTMENT PROPOSITION – RPI.UN UNIT PERFORMANCE RPI Ownership – insiders and institutional Ownership: • 11.4 mil. Units o/s • Directors & management currently 28% • 9 institutions ~ 30% • Retail Float ~ 42% (thinly traded) Unit price movement: • Pre-coronavirus pricing around $40; dip in March 2020
Slide 12: Investment Proposition – Cumulative Value
INVESTMENT PROPOSITION – CUMULATIVE VALUE RPI value drop more severe than indices – yield pressure with rising interest rates Cumulative Value of $100 Investment $300 $250 $200 $150 $100 $50 31-Dec-19 31-Dec-20 31-Dec-21 31-Dec-22 Richards Packaging Income Fund S&P/TSX Composite Index S&P/TSX Income
Slide 13: Board of Trustees/Directors
BOARD OF TRUSTEES/DIRECTORS Darlene Dasent has been added in 2023 – Women represent 40% Trustee/Director Active Background Since Donald Wright 2004 President and CEO of Winnington Capital Group Inc. Chair Mr. Wright was Deputy Chairman of TD Bank Financial Group from 2001 to 2002 and Chairman and Ch
Slide 14: Thank you!
RPI.UN Annual General Meeting – May 4, 2023 ichards Thank you!
Richards Packaging Income Fund — Shareholder Meeting (May 2023) on 6ix