Colabor Group Inc. · OTC:COLFF
Colabor — Investor Presentation (July 2023)
31 slides from Colabor's investor presentation, July 2023
Slide 1: Investor Presentation Colabor Group Inc.
I N V E S T O R P R E S E N TAT I O N COLABOR GROUP INC.(TSX: GCL) July 2023 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 Our distribution platform is shifting to accelerate growth with significant are now halfway through
Slide 5: About Colabor
ABOUT Founded in 1962, Colabor is the largest Quebec based distributor and wholesaler of food and related products, serving the hotel, restaurant and institutional markets « HRI » in Québec and New Brunswick. COLABOR 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 KELLY ELIS
Slide 7: Experienced Board, Business Leaders
E X P E R I E N C E D B OA R D B U S I N E S S L E A D E R S Warren White Previously Senior Vice President, Global Business Engineering at CGI. Chairman Joined in 2018. Marc Beauchamp Founder of Novacap in 1981, one of the most prominent private equity firms in Canada. Member of the Audit Committee
Slide 8: Successful Transformation
S U C C E S F U L T R A N S F O R M AT I O N • Executing our Turnaround (Phase I) • Improved Product & Customer Mix • Consistent Improvements to Gross Margin 8
Slide 9: Executing Our Turnaround
EXECUTING OUR TURNAROUND Building Stronger Delivered Results Foundations 2019-2022 ADJ. EBITDA(1) (IN MILLIONS AND % OF SALES) LEVERAGE(2)(3) NEW LEADERSHIP • Exited unprofitable contracts $33.6 5.8 • Sold unprofitable businesses $29.1 • Optimized and integrated operations • Improved operational syn
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 35% Restaurants (food and non-food) (“center-of-plate”) 29% • Optimized SKUs and mix of • Upscaled premium white table- national brands cloth
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 9 Consecutive Quarters of year-over-year revenue growth & consistent gross margin improvements 25,0% $700,0 $637 24,0% $574 $600,0 23,0% $461 $476 $500,0 22,0% 21,0% $400,0 20,0% 19,0% $300,0 18,0% 18.0% 18.2% $200,0 17,0% 16.8% 16.6% $100,0 16,0% 15,0% $0,
Slide 12: Foodservice Opportunity
FOODSERVICE O PPORTUN ITY • Canadian Foodservice, a large market opportunity • We are #3 in Quebec in a fragmented landscape • Room to Grow • Means to Grow 12
Slide 13: Foodservice: Large Market Opportunity
F O O D S E R V I C E LARGE MARKET OPPORTUNITY CANADIAN “HRI” MARKET(1) DISTRIBUTOR MARKET(2) (Dollars spent at point-of-sale by consumers) (Dollars purchased by the HRI market from distributors) RESTAURANT $89.7 $15.9 LANDSCAPE Billion Billion $16.1B • 83,519 Restaurants(3) • 31.0% are independent
Slide 14: 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 10% 53% #3 in Quebec 38% Market Share(1) • GFS Important distributor in Eastern • Over 100 regional distributors • SYSCO Quebec • Cash and carry Geographic foot
Slide 15: New Phase of Growth: Western Quebec Market
NEW PHASE OF GROWTH WESTERN QUEBEC MARKET $4.5B HRI Addressable Market Current reach: Opportunity: 30% of the HRI Market 90% of the HRI Market Significant Small Broadline Specialty Distributor in Distributor in Eastern Québec Western Quebec & Wholesaler Quebec market size from the Quebec Restaurant
Slide 16: Room to Grow
R O O M TO G R O W Position Colabor Our Strategy: to serve 90% of Capture the significant growth potential currently available to us in Quebec alone the HRI market 1. Develop our distribution activities in Western Quebec There is strong demand in Western Quebec. ORGANIC • Hired sales and marketing t
Slide 17: Western Quebec: A Creative M&A
W E S T E R N Q U E B E C : A C C R E AT I V E M & A Benefits of April 2022 acquisitions GROUPE RESTO-ACHATS INC. BEN DESHAIES INC. Acquired April 4, 2022 Acquired April 22, 2022 • Acquisition of certain assets for $0.5M • Acquisition for $4.5M, of which $2.0 was payable at • Provides HRI customers
Slide 18: Looking Ahead: Strategic Initiatives
LOOKING AHEAD: S T R AT E G I C I N I T I AT I V E S • 2023-2025 Strategic Initiatives (Phase II) • Key Piece: New Hybrid Strategic Facility • ESG Priorities 18
Slide 19: First Semester 2023 Highlights
FIRST SEMESTER 2023 HIGHLIGHTS E V O L U T I O N O F T H E 5 - Y E A R S T R AT E G I C P L A N P R O F I TA B I L I T Y GROWTH PEOPLE BRAND G E N E R AT E POTENTIAL REACH AT T R A C T, R E T A I N R EN EW, P R O F ITAB L E G R O W T H FROM 30% TO 90% AND DEVELOP REFRESH OF THE HRI MARKET • Improve
Slide 20: Key Piece: New Hybrid Facility
K E Y P I E C E : N E W H Y B R I D FA C I L I T Y 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 hybrid facility allowing for both Distribution and Wholesale activities (state of the art ener
Slide 21: ESG Priorities
ESG PRIORITIES Environment Social / Governance • Move into a new 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 raise the representati
Slide 22: Recent Financial Results
R E C E N T F I N A N C I A L R E S U LT S • Q2 2023 Results • Why Invest • Share Information 22
Slide 23: Q2 2023 Sales and Profitability
Q2 2023 SALES AND PROFITABILITY +19.0% DISTRIBUTION SALES UP BY 25.6% $164.2M WHOLESALE SALES UP BY 1.7% $138.0M CONSOLIDATED • Higher volume; • New chains and street customers; SALES • Impact of rising inflation estimated at 6.0%. Q2 2022 Q2 2023 +16.1% $9.3M $8.0M Higher adjusted EBITDA(1) in 2023
Slide 24: Q2 2023 Net Earnings and Cash Flow Trend
Q2 2023 NET EARNINGS AND CASH FLOW TREND Net earnings improved to $2.3M ($0.02 per share), from NET a net earnings of $1.7M ($0.02 per share) EARNINGS • Higher EBITDA (1) ; • Improving operational leverage leading to better fixed cost absorption. Cash flows generated amounted to $11.3M, up from $-1.
Slide 25: Q2 2023 Net Debt and Leverage Ratio Trend
Q2 2023 NET DEBT AND LEVERAGE RATIO TREND -$0.5M Net debt decreased to $47.3M, down from $47.8M at Q4 $47.8M $47.3M 2022 NET DEBT (1) • Increase of cash on hand; • Use of credit facility for $3.3M. Q4 2022 Q2 2023 Leverage ratio down at 2.0x • Contribution of higher Adjusted EBITDA; 2.3x 2.0x • Inve
Slide 26: Why Invest
WHY INVEST GROWTH PROFITABILITY STRONG FREE STRONG MACRO OPPORTUNITIES IMPROVEMENTS CASHFLOWS BALANCE SHEET ENVIRONMENT Planned capacity to reach $33.6M Adj. EBITDA(1) 2.0x Leverage(2) Resilient and diversified 90% of foodservice $8.1M business model customers (from 30%) 5.3% of sales For the last t
Slide 27: Share Information (TSX: GCL)
SHARE INFORMATION (TSX: GCL) LAST 52 WEEKS STOCK PRICE (as at July $0.92 24th, 2023) 52-week low-high $0.68 - $1.02 Number of shares issued 101,986,464 and outstanding Average volume (30 days) 79k Market capitalization $93.8M Institutional and ≈ 35% management ownership Analyst coverage: Kyle McPhee
Slide 28: Appendix
APPENDIX 28
Slide 29: Supplemental Financial Information
SUPPLEMENTAL FINANCIAL INFORMATION 52-week 12-week period 24-week period 53-week period period (in thousands of dollars, except percentages, per share data and 2023 2022 2023 2022 2022 2021 financial leverage ratio) Sales from continuing operations 164,186 137,986 298,109 235,155 574,071 477,004 (1)
Slide 30: Non-IFRS Measures
NON-IFRS MEASURES Second quarter Fiscal Year Reconciliation of Net Earnings (Loss) to Adjusted EBITDA 2018(1) 2023 2022 2022 2021 (in thousands of dollars) 52 weeks 12 weeks 12 weeks 53 weeks 52 weeks Net (loss) earnings from continuing operations (4,387) 2,314 1,690 4,551 8,253 Income taxes (recove
Slide 31: Contact
1620 de Montarville Boulevard Boucherville (Québec) J4B 8P4 Canada Phone : 450 449-4911 Fax : 450 449-6180 investors@colabor.com 31