Richards Group Inc. · TSX:RIC
Richards — Richards Packaging Income Fund — Shareholder Meeting (May 2024)
13 slides from Richards's shareholder meeting presentation, May 2, 2024
Slide 1: RPI.UN Annual General Meeting – May 2, 2024
RPI.UN Annual General Meeting – May 2, 2024 John Glynn – President 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 Distribution Market Leaders: #1 glass/plastic, #1 aesthetic device, #1 vision device, #3 pharmacy automation in Canada. #1 surplus packaging, #3 glass/plastic in USA Revenue Mix: Declining food & beverage packaging (-20%) offset by healthcare +6.6% Majority Healthcare: Healthcare devices
Slide 4: Richards Overview – Since 1912
RICHARDS OVERVIEW – SINCE 1912 After 100 years of focus on Food & Beverage packaging, Healthcare supplies & equipment now make up half our business 19% Healthcare 50% Food & Beverage Cosmetics 31% Revenue growth (% change) Qtr.1 Qtr.2 Qtr.3 Qtr.4 2023 17,000+ ~600 Diversified Customer Base employees
Slide 5: Revenue - Food & Beverage Challenges
REVENUE - FOOD & BEVERAGE CHALLENGES Strong healthcare growth and rebounding cosmetics were offset by significant headwinds in food & beverage Revenue ($M CAD) 500 Food & Beverage Packaging 400 • ($31M) Revenue reduction driven by price competition during 300 industry-wide inventory right-sizing and
Slide 6: Adjusted EBITDA
ADJUSTED EBITDA While revenue declines impacted dollar margin, positive product mix shifts helped maintain margin percentage Adj. EBITDA ($M CAD, %) 80 15.5% 70 15.0% 60 14.5% 50 40 14.0% 30 13.5% 20 • Reclassified Credit card fees from financing to margin 13.0% (2021, 2022 = $2.8; 2023 = $3.1) 10 0
Slide 7: Net Income
NET INCOME Contingent consideration and exchangeable share mark-to-market impacts on Net Income Net Income Per Unit (CAD) $5.00 $4.50 • Exceptional items = contingent consideration on Clarion $4.00 earnout and restructuring fees - $4.30/U in 2021 $3.50 $3.00 • Exchangeable shares treated as debt the
Slide 8: Distributable Cash Flow (DCF)
DISTRIBUTABLE CASH FLOW (DCF) Special distributions were paid in March 2022, 2023, and 2024 Distributable Cash Flow Per Unit (CAD) $4.50 $2.50 Distributable Cash Flow $4.00 • Adjusted EBITDA down 50¢ in 2023 $3.50 $2.00 • Interest up on borrowing for Clarion earnout $3.00 $1.50 $2.50 • Maintenance c
Slide 9: Working Capital
WORKING CAPITAL Successful inventory right sizing drove a significant reduction of $35M in Working Capital Inventory ($27M reduction) Total Working Capital ($M CAD) • Focus on reducing aged-ware was the most significant 120 driver ($14 mil), helped by improved purchasing approval 110 processes 102 1
Slide 10: Distribution Policy Stress Test
DISTRIBUTION POLICY STRESS TEST Despite revenue contraction, we are still well positioned to weather economic downdrafts and pursue investment opportunities • Pro forma distributable cash reflects impact of current debt and interest rates of 5.6% interest, lower US taxes on ($ millions) 2023 Adj's P
Slide 11: RPI.UN Unit Performance
RPI.UN UNIT PERFORMANCE Unit prices returned to pre-COVID levels as both packaging industry multiples and food & beverage performance contracted Ownership (11.4M Units Outstanding) RPI.UN Closing Price $/Unit 100 • Directors & management ~ 23% 90 • 9 institutions ~ 30% 80 70 • Retail Float ~ 47% (th
Slide 12: Board of Trustees/Directors
BOARD OF TRUSTEES/DIRECTORS Experienced and diverse board - Darlene Dasent to the Board in 2023 • Donald Wright – Chairman – 2004 Count of Board Members By Category • President and CEO of Winnington Capital Group Inc. Mr. Wright was Deputy Chairman of TD Bank Financial Group from 2001 to 2002 and Ch
Slide 13: Thank You
THANK YOU RICHARDS
Richards Packaging Income Fund — Shareholder Meeting (May 2024) on 6ix