Goodfellow Inc. · TSX:GDL
Goodfellow — Shareholder Meeting (June 2022)
36 slides from Goodfellow's shareholder meeting presentation, Jun 7, 2022
Slide 1: Annual Meeting of Shareholders
June 7, 2022 ANNUAL MEETING OF SHAREHOLDERS
Slide 2: Welcome Message
WELCOME MESSAGE
Slide 3: Directors and Officers
Directors and Officers G. Douglas Goodfellow – Chair of the Board Patrick Goodfellow – President and CEO Charles Brisebois – CFO and Secretary Alain Côté – Lead Director and Chair of the Audit Committee David Goodfellow – Director Stephen Jarislowsky – Director Paule Têtu – Director James Hewitt – D
Slide 4: Meeting
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Slide 5: Agenda
ANNUAL MEETING OF SHAREHOLDERS AGENDA • Opening of the Meeting • Approval of Minutes of Previous Annual and Special Meeting of Shareholders • Reception of Financial Statements and Independent Auditor’s Report • Election of Directors • Appointment of Auditors • Management Presentation • Question Peri
Slide 6: Forward-Looking Financial Information
June 7, 2022 ANNUAL MEETING OF SHAREHOLDERS Forward-Looking Financial Information This presentation contains forward-looking statements on the objectives, strategies, financial position, operating results and activities of Goodfellow Inc. These statements are forward-looking to the extent that they
Slide 7: Election of Directors
ELECTION OF DIRECTORS Re-election (6 seats): Proposed Nomination (2 new seats): • Alain Côté • Robert Hall • David Goodfellow • Sarah Prichard • Douglas Goodfellow • James Hewitt • Stephen Jarislowsky • Paule Têtu
Slide 8: Appointment of Auditors
APPOINTMENT OF AUDITORS KPMG
Slide 9: Management Presentation
MANAGEMENT PRESENTATION
Slide 10: Management Review
MANAGEMENT REVIEW Patrick Goodfellow • 2021 Objectives President and CEO • 2021 Market Conditions • 2021 Financials • Q1 - 2022 Financials Charles Brisebois CFO and Secretary • 2022 Outlook
Slide 11: Goodfellow at a Glance
2021 GOODFELLOW AT A GLANCE > 650 18 > 5,300 Employees Locations Customers SALES BY CATEGORY SALES BY LOCATION uilding Materials S and E ports 10 11 estern Canada 10 uebec Panels 3 1 umber 3 Atlantic 1 Flooring 18 ntario 2
Slide 12: Corporate Objectives
2021 CORPORATE OBJECTIVES • >3% Net Return on Sales • Deliver on Surging Demand • Improve Inventory Management • Strengthen Balance Sheet • Diversify and Renew Offering
Slide 13: Commentary
2021 COMMENTARY Q1 ▪ Entered Year-2 of COVID Conditions with Confidence ▪ Sales Momentum Carried Over from End 2020 ▪ Supply Disruptions Increased, All Categories Q2 ▪ Unprecedented Sales and Profit Levels Q3 ▪ Commodity Prices Collapsed ▪ Inventory Devaluation Incurred Q4 ▪ Capitalized on Extremely
Slide 14: Obstacles to Growth
2021 OBSTACLES TO GROWTH • Renewed COVID-19 Lockdowns • Domestic • China • Other / International • Impacts from Floods in Western Canada • Strikes at Ports and Rail Companies • Shortages of Available Trucks and Containers
Slide 15: Key Investor Decisions
2021 KEY INVESTOR DECISIONS • Dividends Issued • Reinvestments Made • Debt Reduction • Capex Projects
Slide 16: Projects
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Slide 17: Outdoor Covered Rinks
PROJECTS OUTDOOR COVERED RINKS CARIGNAN, QC KAMOURASKA, QC GORE MEADOWS, ON
Slide 18: Nature Paths and Parks
PROJECTS NATURE PATHS AND PARKS PARC LAC DES FÉES, QC SEPAQ – CAMP MERCIER, QC
Slide 19: Tourist Destinations
PROJECTS TOURIST DESTINATIONS CAVENDISH DUNELAND TRAIL, PEI CHUTES MONTMORENCY, QC
Slide 20: Year-End Results
2021 YEAR-END RESULTS
Slide 21: Sales
2021 SALES $ Sales ▪ By Region: (in millions) ▪ Canada +38% : ▪ Quebec +49% $616 ▪ Ontario +35% ▪ Atlantic +29% +36% ▪ Western Canada +26% ▪ US +24% $454 ▪ Export +14% ▪ By Category: ▪ Panels +63% ▪ Lumber +37% 547 ▪ BMATS +24% ▪ Flooring +16% 397 ▪ Unit Sales +14% ▪ Average Transaction Value Increa
Slide 22: Net Earnings and EPS
2021 NET EARNINGS AND EPS (1) $ Net Earnings $ EPS (1) (in millions) ▪ Net Return on $38 Sales 6.1% for 2021 $4.42 (3% for 2020) ▪ Return on Shareholder Equity 23.5% for $14 2021 $1.61 (11.4% for 2020) 2020 2021 2020 2021 (1) EPS = Net Earnings per Share
Slide 23: Gross Profit
2021 (1) GROSS PROFIT $ Gross Profit (1) (in millions) Gross Profit Margin 22.2% for 2021 $137 (20.2% for 2020) $92 ▪ Price Discipline Strategy ▪ Tightly Controlled Procurement ▪ Rising Tide of Commodity Pricing 2020 2021 (1) Non-IFRS Measure. See “Non-IFRS Financial Measures”.
Slide 24: EBITDA
2021 (1) EBITDA $ EBITDA (1) (in millions) ▪ Gross Profit Increase of $45M $61 ▪ Surging Demand ▪ Surpassed Critical Volume $30 and Improved Gross Margin 2020 2021 (1) Non-IFRS Measure. See “Non-IFRS Financial Measures”.
Slide 25: Cash Flow
2021 CASH FLOW $ Net Cash Flow (1) $ Net Cash Flow (in millions) ▪ Increased Inventory from Operating $60 Turnover Activities (in millions) $33 ▪ Inadvertent Jump in Receivables Due $29 to Strong Q4 $11 2020 2021 2020 2021 (1) Before changes in non-cash working capital components and interest and in
Slide 26: Recap of Outcomes
2021 RECAP OF OUTCOMES Maintained Increased Well- Capitalized Managed on Surging Price and Inventory Margin Turnover Supply Demand Disruptions Discipline Rate Was limited by freight crisis and container availability both inbound and outbound.
Slide 27: Q1 – 2022 Results
Q1 – 2022 RESULTS
Slide 28: Sales
Q1 - 2022 SALES $ Sales ▪ Unit Sales -21% (in millions) $129 ▪ Average Value per Transaction $119 +8% +42% ▪ Sales Mix Changing ▪ By Region: ▪ US +21% ▪ Canada +8% : ▪ Quebec +15% ▪ Ontario +11% ▪ Atlantic +2% ▪ Western Canada -10% ▪ Export -8% Q1 - 2021 Q1 - 2022
Slide 29: Net Earnings and EPS
Q1 - 2022 NET EARNINGS AND EPS (1) $ Net Earnings $ EPS (1) (in millions) ▪ Net Earnings Spread +$1.3M $0.60 $5.1 ▪ Historic Q1 Result $0.44 $3.8 ▪ Trending Strong in Q2 Q1 - 2021 Q1 - 2022 Q1 - 2021 Q1 - 2022 (1) EPS = Net Earnings per Share
Slide 30: Gross Profit
Q1 - 2022 (1) GROSS PROFIT $ Gross Profit (1) (in millions) Gross Profit Margin 21.7% $28 (21.3% in Q1-2020) $25 ▪ Aggressive Price Discipline Strategy ▪ Commodity Pricing Gains ▪ Very Strong Value-Added Order File. (i.e., Hardwood, Glulam, Eastern White Pine) Q1 - 2021 Q1 - 2022 (1) Non-IFRS Measur
Slide 31: SG&A Expenses
Q1 - 2022 SG&A EXPENSES $ SG&A (in millions) ▪ Operations Automation $20 $20 ▪ Lower Head Count ▪ Increased Efficiency with ERP Q1 - 2021 Q1 - 2022
Slide 32: EBITDA
Q1 - 2022 (1) EBITDA $ EBITDA (1) ▪ Increase of $1.8M (in millions) $9.4 $7.6 ▪ Record Q1 Contribution ▪ Unanticipated Period of Net Contribution Q1 - 2021 Q1 - 2022 (1) Non-IFRS Measure. See “Non-IFRS Financial Measures”.
Slide 33: Cash Flow
Q1 - 2022 CASH FLOW $ Net Cash Flow (1) $ Net Cash Flow (in millions) ▪ Increase in from Operating Q1 - 2021 Q1 - 2022 Working Capital in Activities $9 Anticipation of (in millions) Sales Growth. Q1 - 2021 Q1 - 2022 $7 -$2 -$41 (1) Before changes in non-cash working capital components and interest a
Slide 34: Expected Market Conditions
2022 EXPECTED MARKET CONDITIONS Challenges and Headwinds: • Costs ↑ (Spiking Inflation) • Interest Rates ↑ • Consumer Demand ↓ • Freight Costs ↑ • abor Shortage and ages ↑ • Supply Reliability ↓ • Trade arriers ↑
Slide 35: 2022 Strategic Growth Drivers
2022 STRATEGIC GROWTH DRIVERS • Expand Value-Added Capabilities • Develop Industrial Specialty Business • Streamline Inventory • Diversify Product Mix • Maintain Price and Margin Discipline • Enhance Employee Recruitment and Retention • Explore Strategic Acquisitions – Regional or Category
Slide 36: Question Period
QUESTION PERIOD