Transcontinental Inc. Class A · TSX:TCL.A
Transcontinental Inc. Class A — Investor Presentation (September 2017)
32 slides from Transcontinental Inc. Class A's investor presentation, Sep 28, 2017
Slide 1: Investor relations presentation
Investor relations presentation Well-positioned to pursue our transformation September 28, 2017 TSX: TCL.A, TCL.B
Slide 2: Table of contents
Table of contents ● Latest financials 5 ● Who we are 8 ● Self-differentiating factors 14 1. Lead position in established markets served 15 2. Efficient operator 17 3. Strong cash flow generating capacity 19 4. Healthy balance sheet 20 ● Appendix 22 2
Slide 3: 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 4: Non-IFRS financial measures
Non-IFRS financial measures In this presentation, unless otherwise indicated, all financial data are prepared in accordance with International Financial Reporting Standards (IFRS) and the term “dollar”, as well as the symbol “$” designate Canadian dollars. In this presentation, we also use non-IFRS
Slide 5: Latest financials
Latest financials ● Q3-2017 and LTM financial performance 5
Slide 6: Q3-2017 and LTM financial performance
LATEST FINANCIALS Q3-2017 and LTM financial performance +2.1% +1.6% +11.5% +14.6% 6
Slide 7: Q3-2017 and LTM financial performance cont’d
LATEST FINANCIALS Q3-2017 and LTM financial performance cont’d +$39M +$118M 7
Slide 8: Who we are
Who we are ● At a glance ● Our transformation journey ● Our revenue profile by activity ● Our strategy ● Driving a successful transformation 8
Slide 9: At a glance
WHO WE ARE At a glance Canada’s largest printer with operations in 7,000 employees in Canada and print, flexible packaging, publishing and digital the United States media Mission: create products and services that $2.0B LTM revenues allow businesses to attract, reach and retain their target customer
Slide 10: Our transformation journey
WHO WE ARE Our transformation journey TRANSFORMATION 1st Packaging 4 Packaging Exit of local community Strategic investments acquisition acquisitions completed newspaper business 65% 69% 74% 79% pro forma 2010 2014 2016 LTM 2017 2% 11% 5% 35% 29% 15% 16% 2007- 2010 2014-2015 2016 2017 – and beyond
Slide 11: Our revenue profile by activity
WHO WE ARE Our revenue profile by activity Pro forma 2017 LTM Revenues(1) Mature segment 18 plants(3) $1,516M 79% Retailer-related services $883M Flyer printing 8 plants Flyer distribution Premedia services In-store marketing product printing 9 plants Newspapers $244M 4 plants Magazines and Books $2
Slide 12: Our strategy
WHO WE ARE Our strategy Defend and strengthen Gain momentum in our Optimize our media our printing platform Packaging division activities ● Improve efficiencies ● Grow sales organically ● Improve efficiencies ● Gain market share ● Pursue acquisitions ● Exit local newspapers ● Manage long-term contra
Slide 13: Driving a successful transformation
WHO WE ARE Driving a successful transformation 1 Stable revenues 2 Profitability growth Revenues ($M) Adjusted EBITDA ($M) and margin 19% 19% 20% 2,028 2,112 2,097 2,002 2,020 2,036 18% 18% 17% 18% 1,989 1,990 16% 407 390 373 379 365 358 354 339 2010 2011 2012 2013* 2014 2015 2016 2017 LTM 2010 2011
Slide 14: Self-differentiating factors
Self-differentiating factors 1. Lead position in established markets served 2. Efficient operator 3. Strong cash flow generating capacity 4. Healthy balance sheet 14
Slide 15: Lead position in established markets served – Focusing on selected markets
SELF-DIFFERENTIATING FACTORS 1. Lead position in established markets served – Focusing on selected markets Retailer-related printing services Printed flyer is a relevant medium 1 to drive traffic to the stores 4 Serve a solid customer base ● 84% of shoppers read printed flyers (1) ● 73% of millennia
Slide 16: Lead position in established markets served – Focusing on selected markets cont’d
SELF-DIFFERENTIATING FACTORS 1. Lead position in established markets served – Focusing on selected markets cont’d Non retailer-related printing services Media Solid and long-standing relationships Investing in our B2B and Education 1 with diverse mix of leading publishers 4 portfolio on an opportuni
Slide 17: Efficient operator – Continued optimization of our printing platform
SELF-DIFFERENTIATING FACTORS 2. Efficient operator – Continued optimization of our printing platform Printing division adjusted EBIT (in $M) $1.7B Revenues $1.5B 302 285 290 270 253 48 plants 242 239 223 190 38 plants 29 plants 29 plants 27 plants 26 plants 23 plants 18 plants 18 plants 2009 2010 20
Slide 18: Efficient operator – Building on solid manufacturing competencies
SELF-DIFFERENTIATING FACTORS 2. Efficient operator – Building on solid manufacturing competencies Defined a new Packaging division’s revenues ($M) Started Invested to foster operating diversification growth structure 300 • Acquisition of • Packaging division under • Invested in new capacity Capri Pa
Slide 19: Strong cash flow generating capacity
SELF-DIFFERENTIATING FACTORS 3. Strong cash flow generating capacity Cash flow from operations* and use of cash ($M) CAPEX (incl. intangibles) Dividends Acquisitions Share repurchases Cash Flow from operations 297 396 420 289 373 379 321 327 344 247 311 Over $400M deployed to diversifying into flexi
Slide 20: Healthy balance sheet
SELF-DIFFERENTIATING FACTORS 4. Healthy balance sheet 903 Net indebtedness (in $M) and leverage ratio INVESTMENT GRADE 699 CREDIT 2.6x RATING 539 471 442 1.9x 321 346 331 1.5x 1.3x 1.2x 195 1.0x 0.9x 0.8x 0.5x 2009* 2010** 2011** 2012** 2013*** 2014 2015 2016 Q3-2017 * As originally reported and inc
Slide 21: Making impressions count
Making impressions count THE TC DIFFERENCE TO CREATE LONG TERM VALUE RELIES ON: 1) OUR IDENTITY Committed to our values, our people, placing our customers at the heart of our priority and being a responsible corporate citizen 2) OUR STRONG CASH FLOW GENERATING CAPACITY Committed to returning FCF to
Slide 22: Appendix
Appendix @ TRANSCONTINENTAL
Slide 23: Historical financials tear sheet
APPENDIX Historical financials tear sheet Revenues ($M) Adjusted EBITDA ($M) Cash flow from operations* ($M) 407 2,097 2,020 2,036 390 1,990 2,002 379 420 379 396 354 339 327 344 2013* 2014 2015 2016 2017 2013* 2014 2015 2016 2017 2013 2014 2015 2016 2017 Q3 Q3 LTM Q3 LTM LTM * 2013 financial inform
Slide 24: TCL.A performance
APPENDIX TCL.A performance $30.00 $25.00 $20.00 $15.00 $10.00 $5.00 $0.00 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 24
Slide 25: Operating a state-of-the-art national printing network
APPENDIX Operating a state-of-the-art national printing network 18 printing plants (As of September 28, 2017) Quebec (8) British Columbia (1) Beauceville Delta Boucherville Gatineau Prince Edward Island (1) Montreal (3) Borden-Carlton Quebec St-Hyacinthe Nova Scotia (1) Halifax Ontario (4) Brampton
Slide 26: Providing a broad range of solutions as the largest printer in Canada
APPENDIX 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 and geotargeting Premedia In-store marketing products 26
Slide 27: Providing a broad range of solutions as the largest printer in Canada
APPENDIX Providing a broad range of solutions as the largest printer in Canada and one of the largest in North America Newspapers Unique outsourcing model for publishers Magazines and books Commercial products Direct mail, catalogs, etc. 27
Slide 28: Providing a broad range of flexible packaging solutions
APPENDIX Providing a broad range of innovative and attention-grabbing flexible packaging solutions Assorted pouches and bags Overwrap Printed shrink and stretch films 28
Slide 29: Providing a broad range of flexible packaging solutions
APPENDIX Providing a broad range of innovative and attention-grabbing flexible packaging solutions Rollstock Non-forming web Lidding 29
Slide 30: Providing a broad range of multiplatform media solutions
APPENDIX Providing a broad range of multiplatform media solutions Multiplatform speciality publications, business Leader in French-language Business Educational & Trade events, conferences and seminars, content educational book publishing in Solutions solutions Book Publications Canada 30
Slide 31: 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 and 2016 Progress Report 31
Slide 32: TC Transcontinental
tc @ TRANSCONTINENTAL
Transcontinental — Investor Presentation (September 2017) on 6ix