Transcontinental Inc. Class A · TSX:TCL.A
Transcontinental Inc. Class A — TC Transcontinental — Investor Presentation (October 2016)
32 slides from Transcontinental Inc. Class A's investor presentation, Oct 24, 2016
Slide 1: Investor relations presentation
Investor relations presentation Well positioned to pursue our transformation October 24, 2016
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 LTM Revenues $1,335M 65% Retail and Newspapers $861M Magazines and Books $238M Marketing Products $236M $533M (1) Local Solutions $358M $2.1B 9% Interactive Marketing Solutions $ 90M Business Solutions and Education $ 85M $183M 26%
Slide 6: Sustaining strong long-standing relationships with a diverse mix of leading customers
Sustaining strong long-standing relationships with a diverse mix of leading customers GROCERY DRUGSTORE HOME IMPROVEMENT BIG BOX NEWSPAPER PUBLISHERS BOOK AND MAGAZINE PUBLISHERS Our organization at a glance 6
Slide 7: Pursuing an optimization and diversification strategy
Pursuing an optimization and diversification strategy Mature segment Segment in transformation Growth segment Optimizing our Optimizing our Media Building our Printing platform activities Packaging division ● Improving efficiencies ● Improving efficiencies ● Growing sales ● Gaining market share ● St
Slide 8: Delivering a solid performance
Delivering a solid performance REVENUES ($M) CASH FLOW FROM DIVIDENDS PAID PER OPERATIONS* ($M) PARTICIPATING SHARE (¢) 2,112 2,097 1,989 1,990 2,002 373 379 344 67¢ 321 327 63¢ 57¢ 58¢ 49¢ 2011* 2012 2013** 2014 2015 2011 2012 2013 2014 2015 2011 2012 2013* 2014 2015 * Divested Mexican operations (
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 ebit (in millions of $) 54 plants 48 plants 246 38 plants 230 29 29 222 plants plants 198 200 27 26 180 plants 23 plants 19 plants plants 148 147 2008 2009 2010 2011 2012 2013* 2014** 2015 2016*** * 2013 figu
Slide 11: State-of-the-art national printing network
Printing segment State-of-the-art national printing network 19 printing plants (As of October 24, 2016) Quebec British Columbia Beauceville Delta Boucherville Gatineau Newfoundland Montreal (3) St. John’s* Quebec St-Hyacinthe Prince Edward Island Borden-Carlton Ontario Markham & Aurora Nova Scotia B
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 third largest in North America Retail flyers Newspapers Unique outsourcing model for publishers Magazines and books Marketing products In-store marketing products, direct mail, catalogs, etc. Our business segm
Slide 13: 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 14: Maintaining profitability of our media sector
Media segment Maintaining profitability of our media sector Media Sector adjusted EBIT (in millions of $) 62 54 55 48 41 38 2011 2012 2013 2014 2015 2016 (LTM) Our Business Segments 14
Slide 15: Providing a broad range of multiplatform media solutions
Media segment Providing a broad range of multiplatform media solutions Multiplatform local and Flyer distribution regional newspaper publishing Premedia, door-to-door distribution to 13M homes in Canada, geotargeting 140 titles in Quebec and Eastern Canada, digital advertising network Leader in Queb
Slide 16: Providing a broad range of multiplatform media solutions
Media segment Providing a broad range of multiplatform media solutions Business Solutions Educational and Trade Book Publishing Multiplatform speciality publications, business events, conferences and seminars, content solutions Premedia Leader in French-language educational book publishing in Canada
Slide 17: Managing opportunities and risks
Media segment Managing opportunities and risks Opportunities Risks ● Continuing to optimize our portfolio and ● On-going challenging advertising our cost structure market ● Growing local digital ad solutions offering ● Building new sources of revenues for educational books and trade publications Our
Slide 18: Generating packaging revenues from four acquired businesses
Packaging segment Generating packaging revenues from four acquired businesses Pro Forma 2016 LTM Revenues: $300M* Breakdown by acquisition** Transcontinental Capri • Transaction closed on May 3, 2014 • ≈ 200 employees • Main markets served: cheese, yogourt 34% Transcontinental Ultra Flex • Transacti
Slide 19: Building a high-performance North American packaging platform
Packaging Segment Building a high-performance North American packaging platform Transcontinental Transcontinental Optium (premedia) Flexstar Aurora, Ontario Richmond, BC Transcontinental Ultra Flex Richmond Brooklyn, New York Aurora Lenexa Clinton New York Transcontinental Transcontinental Robbie Ca
Slide 20: Providing a broad range of 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 20
Slide 21: Providing a broad range of 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 21
Slide 22: Managing opportunities and risks
Packaging segment Managing opportunities and risks Opportunities Risks ● Expanding our North American footprint ● Ability to make acquisitions at reasonable prices ● Leveraging our national sales force ● Long sales cycles ● Entering into new vertical markets ● Expanding our capabilities by investing
Slide 23: Overview
Overview ● Our organization at a glance ● Our business segments ● Our means to finance growth ● Contact and additional information 23
Slide 24: 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 442 346 321 313 1.5x 1.3x 1.2x 1.0x 0.9x 0.8x 2009* 2010** 2011** 2012** 2013*** 2014 2015 Q3-2016 * As originally reported and including securitization. ** As origin
Slide 25: Generating strong free cash flow and yield
Generating strong free cash flow and yield Free cash flow (in millions of $) and yield 221 204 20.7% 180 19.8% 172 18.4% 157 142 116 13.8% 9.4% 10.0% 9.7% 2010 2011 2012 2013 2014 2015 2016 (LTM) Note: Free cash flow is adjusted operating earnings before amortization less the sum of capital expendit
Slide 26: Deploying capital efficiently
Deploying capital efficiently Primary use of cash (in millions of $) Total allocated since FY’2007: Share repurchases $147M Acquisitions $722M Dividends $489M Capital expenditures $1,260M (incl. intangibles) 49 53 226 67 14 26 25 133 1 12 25 14 100 17 15 23 35 284 60 $130 260 36 46 52 47 53 56 42 15
Slide 27: 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 28: Sustaining dividend growth
Sustaining dividend growth Dividends paid per participating share on an annual basis (in $) + Paid special +9% 0.74 dividend of $1.00 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 2016F Annualized 5-year CAGR: 8.6% Yield: 4.1%
Slide 29: Using normal course issuer bid opportunistically
Using normal course issuer bid opportunistically Participating share redemptions (in millions of $) 67 53 49 17 15 12 No share buybacks No share buybacks 1 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 YTD Our means to finance growth 29
Slide 30: Overview
Overview ● Our organization at a glance ● Our business segments ● Our management philosophy ● Contact and additional information 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: http://tctranscontinental.com/investors 2016-2018 Corporate Social Responsibility Plan: http://tctransconti
Slide 32: tk @ TRANSCONTINENTAL
tk @ TRANSCONTINENTAL
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