Transcontinental Inc. Class A · TSX:TCL.A
Transcontinental Inc. Class A — Investor Presentation (January 2017)
31 slides from Transcontinental Inc. Class A's investor presentation, Jan 23, 2017
Slide 1: Investor relations presentation
Investor relations presentation Well positioned to pursue our transformation January 23, 2017
Slide 2: Forward-looking information
FORWARD-LOOKING INFORMATION This presentation contains certain forward-looking statements concerning the goals of the Corporation, its strategy, its projected financial results and expectations as to its operations. Such statements, based on the current expectations of management, inherently involve
Slide 3: Overview
Overview ● Our organization at a glance ● Our business segments ● Our means to finance growth ● Contact and additional information 3
Slide 4: Introducing our organization
Introducing our organization • Canada’s largest printer with operations in print, flexible packaging, publishing and digital media, TC Transcontinental's mission is to create products and services that allow businesses to attract, reach and retain their target customers. • Respect, teamwork, perform
Slide 5: Generating C$2 billion in revenues from three business segments
Generating C$2 billion in revenues from three business segments 2016 Revenues $1,535M 74% Retail and Newspapers $859M Magazines and Books $245M Marketing Products $224M Distribution and Premedia $207M (1) Local Solutions $312M $210M $2.1B Business and Education $ 87M Interactive Marketing Solutions
Slide 6: Sustaining strong long-standing relationships with a diverse mix of leading customers
Sustaining strong long-standing relationships with a diverse mix of leading customers GROCERY RETAILERS DRUGSTORE HOME IMPROVEMENT OTHER NEWSPAPER PUBLISHERS BOOK AND MAGAZINE PUBLISHERS Our organization at a glance 6
Slide 7: Pursuing an optimization and diversification strategy
Pursuing an optimization and diversification strategy Mature segment Segment in transformation Growth segment Defend and strengthen Optimizing our Media Building our our Printing platform activities Packaging division ● Improving efficiencies ● Improving efficiencies ● Pursuing acquisitions ● Gainin
Slide 8: Delivering a solid performance
Delivering a solid performance REVENUES ($M) CASH FLOW FROM DIVIDENDS PAID PER OPERATIONS* ($M) PARTICIPATING SHARE (¢) 2,112 2,097 1,990 2,002 2,020 73¢ 67¢ 379 396 63¢ 57¢ 58¢ 327 344 321 2012 2013* 2014 2015 2016 2012 2013 2014 2015 2016 2012 2013* 2014 2015 2016 * 2013 financial information has
Slide 9: Overview
Overview ● Our organization at a glance ● Our business segments ● Our means to finance growth ● Contact and additional information 9
Slide 10: Continued optimization of our printing platform
Printing segment Continued optimization of our printing platform Printing division adjusted EBITDA (in millions of $) $1.5M Stable revenues $1.3M 48 plants 363 359 346 314 326 324 333 280 38 plants 29 plants 29 plants 27 plants 26 plants 23 plants 18 plants 2009 2010 2011 2012 2013* 2014 2015 2016 *
Slide 11: State-of-the-art national printing network
Printing segment State-of-the-art national printing network 18 printing plants (As of January 23, 2017) Quebec British Columbia Beauceville Delta Boucherville Gatineau Prince Edward Island Montreal (3) Borden-Carlton Quebec St-Hyacinthe Nova Scotia Halifax Ontario Markham & Aurora USA Brampton Fremo
Slide 12: Providing a broad range of solutions as the largest printer in Canada
Printing segment Providing a broad range of solutions as the largest printer in Canada and one of the largest in North America Retail flyers Flyer distribution Door-to-door distribution, geotargeting Leader in Quebec and some Atlantic provinces Marketing products Premedia In-store marketing products
Slide 13: Providing a broad range of solutions as the largest printer in Canada
Printing segment Providing a broad range of solutions as the largest printer in Canada and one of the largest in North America Magazines and books Newspapers Unique outsourcing model for publishers Our business segments 13
Slide 14: Managing opportunities and risks
Printing segment Managing opportunities and risks Opportunities Risks ● Increasing share of wallet with key ● Speed of transition of advertising customers dollars to digital ● Gaining additional newspaper ● Popularity of digital flyers / flyer app outsourcing agreements ● Consolidation of customers
Slide 15: Providing a broad range of multiplatform media solutions
Media segment Providing a broad range of multiplatform media solutions Multiplatform local and Business Solutions regional newspaper publishing Multiplatform speciality publications, business events, conferences and 140 titles in Quebec and Eastern Canada, digital advertising network seminars, conte
Slide 16: Managing opportunities and risks
Media segment Managing opportunities and risks Opportunities Risks ● Building new sources of revenues for ● On-going challenging advertising educational books and trade market publications ● Continuing to optimize our portfolio and our cost structure ● Growing local digital ad solutions offering Our
Slide 17: Generating packaging revenues from four acquired businesses
Packaging segment Generating packaging revenues from four acquired businesses Pro Forma 2016 Revenues: $300M* Breakdown by acquisition** Transcontinental Capri • Transaction closed on May 3, 2014 • ≈ 200 employees • Main markets served: cheese, yogourt 34% Transcontinental Ultra Flex • Transaction c
Slide 18: Building a high-performance North American flexible packaging platform
Packaging Segment Building a high-performance North American flexible packaging platform Transcontinental Optium Transcontinental (premedia) Flexstar Aurora, Ontario Richmond, BC Transcontinental Ultra Flex Richmond Brooklyn, New York Aurora Lenexa New York Clinton Transcontinental Robbie Transconti
Slide 19: Providing a broad range of innovative flexible packaging solutions
Packaging segment Providing a broad range of innovative and attention-grabbing flexible packaging solutions Assorted pouches and bags Overwrap Printed shrink and stretch films Continued Our business segments 19
Slide 20: Providing a broad range of innovative flexible packaging solutions
Packaging segment Providing a broad range of innovative and attention-grabbing flexible packaging solutions Rollstock Non-forming web Lidding Our business segments 20
Slide 21: Managing opportunities and risks
Packaging segment Managing opportunities and risks Opportunities Risks ● Leveraging our expertise in ● Ability to make acquisitions at manufacturing network management reasonable prices ● Expanding our North American footprint ● Long sales cycles ● Leveraging our national sales force ● Entering into
Slide 22: Overview
Overview ● Our organization at a glance ● Our business segments ● Our means to finance growth ● Contact and additional information 22
Slide 23: Solid balance sheet for future strategic investments
Solid balance sheet for future strategic investments Net indebtedness (in millions of $) and leverage ratio 903 2.6x 699 539 471 1.9x 442 346 331 321 1.5x 1.3x 1.2x 1.0x 0.9x 0.8x 2009* 2010** 2011** 2012** 2013*** 2014 2015 2016 * As originally reported and including securitization. ** As originall
Slide 24: Generating strong free cash flow and yield
Generating strong free cash flow and yield Free cash flow (in millions of $) and yield 27.0% 276 250 232 225 223 24.3% 210 23.0% 152 17.8% 16.0% 13.3% 12.3% 2010 2011 2012 2013 2014 2015 2016 Note: Free cash flow is adjusted operating earnings before amortization less the sum of capital expenditures
Slide 25: Deploying capital efficiently
Deploying capital efficiently Primary use of cash (in millions of $) Total allocated since FY’2007: Share repurchases $154M Acquisitions $761M Dividends $503M Capital expenditures $1,275M (incl. intangibles) 49 53 67 226 14 26 25 133 1 12 22 25 14 100 17 86 23 35 284 60 $130 260 36 52 56 47 53 56 15
Slide 26: Requiring low capital expenditures
Requiring low capital expenditures Capital expenditures (incl. intangible assets) (in millions of $) More than $800M Enabling opportunities for: invested in state-of-the- • Onboarding of new clients art printing platform • Increasing productivity • More efficiencies 284 • Less costs 260 166 159 144
Slide 27: Sustaining dividend growth
Sustaining dividend growth Dividends paid per participating share on an annual basis (in $) + Paid special +9% dividend of $1.00 0.73 0.67 0.63 0.57 0.58 0.49 0.35 0.31 0.32 0.28 0.25 0.21 0.17 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 5-year CAGR: 8.3% Yield: 4.1% (as at Oct.
Slide 28: Using normal course issuer bid opportunistically
Using normal course issuer bid opportunistically Participating share redemptions (in millions of $) 67 53 49 22 17 12 No share No share buybacks buybacks 1 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Our means to finance growth 28
Slide 29: Overview
Overview ● Our organization at a glance ● Our business segments ● Our means to finance growth ● Contact and additional information 29
Slide 30: Contact and additional information
Contact and additional information Transcontinental Inc. 1 Place Ville Marie Suite 3240 Montreal (QC) H3B 0G1 Telephone: 514 954-4000 Website: www.tc.tc Investor’s kit: Corporate Presentation 2016-2018 Corporate Social Responsibility Plan Contact and additional information 30
Slide 31: tk @ TRANSCONTINENTAL
tk @ TRANSCONTINENTAL
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