Richards Group Inc. · TSX:RIC
Richards — Richards Packaging Income Fund — Shareholder Meeting (May 2020)
14 slides from Richards's shareholder meeting presentation, May 4, 2020
Slide 1: RPI.UN Annual General Meeting – May 4, 2020
RPI.UN Annual General Meeting – May 4, 2020 Gerry Glynn – CEO Enzio Di Gennaro - CFO 0
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 ➢ #1 packaging distributor in Canada; #3 in North America ➢ Healthcare footprint in Canada only (24% of total enterprise) ➢ Highly diversified geographically and by end customer markets ➢ 58% in the US and 42% in Canada ➢ Higher than industry average organic growth ➢ China represents appr
Slide 4: Richards Overview – since 1912
Richards Overview – since 1912 Vancouver Edmonton Food, Beverage Cosmetics & Other Calgary 30% Tacoma Kent Winnipeg 47% Portland Montreal Halifax Toronto Granby Reno Sacramento Streator New Jersey Norwalk Los Angeles Distribution Centre Agency Centre Healthcare Memphis Manufacturing Plant 23% Monter
Slide 5: Revenue growth amidst a challenging F/X environment
Revenue growth amidst a challenging F/X environment ($ millions) 11% 350 Quarterly Revenue Growth 9% 300 Organic Fx Revenue 7% 250 5% 2017 - Q1 2.6% -1.2% 1.4% 200 3% 2017 - Q2 4.0% 3.1% 7.1% 150 1% 2017 - Q3 3.7% -1.3% 2.4% 2017 2018 2019 2017 - Q4 3.6% -1.2% 2.4% ➢ 3-year averageOrganic organic re
Slide 6: GDP and Packaging Markets
GDP and Packaging Markets Revenue Growth 29% Acqui sition ➢ Acquisitions catalyst for packaging growth for 2018 ➢ RPI higher in Healthcare and cosmetics for 2019 24% ➢ Approximately 143 industry wide acquisitions annually; median multiple of 10x EBITDA 19% ➢ RPI Acquisition history: ➢ Q4 2015 – Heal
Slide 7: Adjusted EBITDA strengthening on organic growth and mix
Adjusted EBITDA1 strengthening on organic growth and mix ($ millions) ($millions) 2017 2018 2019 44 17% Revenue $ 296.6 $ 318.1 $ 334.1 38 15% 32 Margin 52.6 58.6 61.0 26 13% % 17.8% 18.4% 18.2% 20 11% Admin. Exp 12.2 12.5 13.0 2017 2018 2019 Adjusted EBITDA $ 40.6 $ 46.0 $ 48.1 Adjusted EBITDA FX A
Slide 8: Net Income
Net Income Basic Net Income Per Unit ($/Unit-basic) 2017 2018 2019 $2.50 40.0 Adjusted EBITDA $ 3.73 $ 4.22 $ 4.34 35.0 $2.00 Amortization 0.30 0.30 0.32 30.0 Financial expenses 0.21 0.21 0.30 $1.50 25.0 23.1 Exceptional items 0.01 - 0.03 20.4 20.0 $1.00 Exchangeable shares 0.58 0.39 0.70 15.0 15.8
Slide 9: DCF Per Unit
Distributable Cash Flow (DCF) DCF Per Unit ($/Unit-fully diluted) 2017 2018 2019 $2.60 Adjusted EBITDA $ 3.47 $ 3.93 $ 4.09 $2.40 Interest 0.20 0.20 0.19 $2.20 Taxes 1.14 1.05 1.06 $2.00 Mtce. capital 0.10 0.17 0.15 $1.80 Distributable cash flow $ 2.03 $ 2.52 $ 2.69 $1.60 Distributions $ 1.28 $ 1.33
Slide 10: Distribution Policy Stress Test – retain capital for opportunities
Distribution Policy Stress Test – retain capital for opportunities ($ millions) 2019 Adj's Proforma Adjusted EBITDA 48.1 (6.1) 42.0 ➢ Pro forma distributable cash reflects impact of a Interest (2.2) (0.1) (2.3) recession similar to 2009 at -10%, long term rates of 3% interest and a U.S./Cdn. 84¢ exc
Slide 11: Investment Proposition – RPI.UN Unit Performance
Investment Proposition – RPI.UN Unit Performance Volume - 000's Ownership: Price - $/unit units ➢ 12 mil. Units o/s 50 2 500 ➢ Management currently 27% (Insider moves 700,000 June 2 2018 and 400,000 Aug 2019) 40 400 ➢ 9 institutions ~ 30% ➢ Retail Float ~ 44% (thinly traded 300 7k/day) 1 30 3 4 200
Slide 12: Investment Proposition – Cumulative Value
Investment Proposition – Cumulative Value 2016 2017 2018 2019 Cumulative Cumulative Value of $100 Investment $/Unit Distributions 1.08 1.29 1.32 1.32 5.01 $270 Unit Value 5.61 6.38 3.83 10.59 26.41 NCIB 0.02 - - - 0.02 $220 LTIP (0.01) (0.01) (0.01) (0.02) (0.05) Total 6.71 7.66 5.14 11.89 31.39 $17
Slide 13: Board of Trustees/Directors
Board of Trustees/Directors Trustee/Director Active Background High level of Financial Risk Oversight expertise, Since Literacy, 4 4 Relevent Donald Wright 2004 President and CEO of Winnington Capital Group CEO/President experience, 3 Chair Inc. Mr. Wright was Deputy Chairman of TD Extensive knowled
Slide 14: Richards
Richards 13
Richards Packaging Income Fund — Shareholder Meeting (May 2020) on 6ix