Big Rock Brewery Inc. · TSX:BR
Big Rock Brewery — Shareholder Meeting (May 2018)
32 slides from Big Rock Brewery's shareholder meeting presentation, May 10, 2018
Slide 1: Annual Meeting of Shareholders
Annual Meeting of Shareholders May 10, 2018 TSX:BR 1
Slide 2: Agenda
Agenda ➢ Welcome remarks – Wayne Arsenault – CEO ➢ Formal meeting – Call to order – Receive annual statements & auditor’s report – Fix number of directors to be elected at seven – Election of directors – Appointment of auditors – Other matters ➢ Management’s presentation – Wayne Arsenault – CEO – Ba
Slide 3: Formal Meeting
Formal Meeting Chairman – Michael Kohut ➢ Call to order ➢ Receive annual statements & auditor’s report – Copies are available in the lobby ➢ Election of directors – Michael Kohut – Chairman – Director since March 7, 2008 – Kathleen McNally-Leitch – Vice Chair – Director since August 27, 1996 – Rober
Slide 4: Annual Meeting of Shareholders: Management Presentation
Annual Meeting of Shareholders Management Presentation TSX:BR 4
Slide 5: Cautionary Statement
Cautionary Statement Caution Regarding Forward-Looking Statements Certain statements contained in this presentation constitute forward-looking statements. These statements relate to future events or Big Rock's future performance. All statements, other than statements of historical fact, may be forwa
Slide 6: Big Rock Today
Big Rock Today ➢ Focused on driving excellence to FOCUSED ON DRIVING EXCELLENCE improve profitability TO IMPROVE PROFITABILITY ➢ Multi-province footprint – Alberta – Ontario – British Columbia ➢ Consumer-driven – Building brand awareness – Acting on consumer feedback ➢ Positioned for profitable grow
Slide 7: Key Accomplishments
Key Accomplishments ➢ 2017 – New President & CEO – Reduced debt – Improved Alberta net markup rate – Closed sale of undeveloped land in Calgary – Rebranding and packaging redesign ➢ Q1 2018 – Better margins and profitability – BC Brewery Joint venture TSX:BR 7
Slide 8: BC Brewery Joint venture
BC Brewery Joint venture ➢ April 19 agreement with Fireweed Brewing Corporation – Operates as Tree Brewing Co – brands include Hop Head IPA, Dukes Cider, Shaftebury – Privately owned – 22 years in business – Currently based in Kelowna BC ➢ Fireweed Brewing will operate the Vancouver brewery ➢ Produc
Slide 9: Focused on Improving Profitability
Focused on Improving Profitability ➢ Increase profit margins – Lower materials prices – Manage production costs – Improve product mix ➢ Increase brewery utilization – BC joint venture – Contract brewing ➢ 90 day process improvement cycles – Improving processes and execution capabilities – 1/3 of org
Slide 10: Positioned for Profitable Growth
Positioned for Profitable Growth % of Hectolitres Production 2017 production (hl) 209,420 Spare capacity (hl) 43,380 Current capacity (hl) 252,800 120.71% Potential additions (hl) 191,200 Potential capacity (hl) 444,000 212.01% Cap Ex required ($000s) $ 4,070 Incremental cost per hl $ 21.29 TSX:BR 1
Slide 11: Key Challenges
Key Challenges ➢ Government policy ➢ The continued flight to lower priced beer – particularly in Alberta ➢ Sustained, intense competition TSX:BR 11
Slide 12: Product Innovation and Industry Leadership
Product Innovation and Industry Leadership ➢ Launched many new products in 2017 ➢ Seasonal products ➢ Barrel-aged beer ➢ New permanent brands – Pilsner, Rhinestone Cowboy ➢ Nano and pilot breweries – Lambic Kriek and others ➢ 2018 will be focused on core Big Rock brands TSX:BR 12
Slide 13: Building an Audacious Brand
BUILDING AN AUDACIOUS BRAND TSX:BR 13
Slide 14: Building An Audacious Brand
THEY WANT TO MIGRATE TO CRAFT, BUT THEY NEED | TSX:BR BREWERY
Slide 15: Ed's Mission
• Craft for All ED’S MISSION TSX:BR 15
Slide 16: Leader, Not a Follower
LEADER, NOT A FOLLOWER WHAT DRIVES 2 PIONEERING pe BREWERY
Slide 17: TSX:BR
TSX:BR 17
Slide 18: Ed Said
Slide 19: Ed Said
Slide 20: Ed Said: Try starting a craft brewery in the '80s
| ED SAID: TRY STARTING Al [CRAFT BREWERY aSIN THE ‘80s.
Slide 21: TSX:BR
TSX:BR 21
Slide 22: Annual Results
Annual Results TSX:BR 22
Slide 23: Annual Results – Sales Volumes
Annual Results – Sales Volumes 7.3% 200,000 150,000 Hectolitres 100,000 199,454 209,420 181,857 50,000 0 2015 2016 2017 TSX:BR 23
Slide 24: Annual Financial Results – Operating Profit (Loss)
Annual Financial Results – Operating Profit (Loss) Net Revenue $50 $46.6 $43.1 $0.5 $39.6 $0.5 $5.2 $40 $0.4 $5.7 $5.2 $14.3 $30 $12.6 $13.2 $20 $ Millions $24.5 $27.7 $10 $21.8 $0 $(1.0) $(0.3) $(1.0) $(10) 2015 2016 2017 Operating profit (loss) Cost of sales Selling expenses General & administrati
Slide 25: Annual Financial Results – Net Income (Loss)
Annual Financial Results – Net Income (Loss) 2015 $(1,012) $(1,012) $(1,075) $ 000s $124 $180 $(241) 2016 Operating Finance Other Income tax Net $(266) profit -$266 (loss) expense expenses expense income $(453) (income) $(123) (income) $(39) (recovery) (loss) $349 $ 000s 2017 Operating Finance Other
Slide 26: Annual Financial Results – Cash Flow
Annual Financial Results – Cash Flow 2015 $3,761 $000s $(6,808) $2,103 $540 $1,484 2016 Cash - Operating Financing Investing Cash - Opening activities activities $3,708 activities Closing balance balance $(7,584) $000s $3,543 $540 $207 Cash - Operating Financing 2017 Investing Cash - Opening activit
Slide 27: First Quarter Results
First Quarter Results TSX:BR 27
Slide 28: First Quarter Results – Sales Volumes
First Quarter Results – Sales Volumes 50,000 -5.4% 40,000 Hectolitres 30,000 20,000 43,477 41,144 10,000 - Q1 2017 Q1 2018 TSX:BR 28
Slide 29: 1st Quarter Financial Results – Operating Loss
1st Quarter Financial Results – Operating Loss Net Revenue 10,000 $9,589 $9,466 $119 $119 $1,367 $1,165 8,000 $3,295 $3,115 6,000 $ 000s 4,000 $5,965 $5,572 2,000 0 $(505) $(1,157) (2,000) Q1 2017 Q1 2018 Cost of sales Selling expenses General & administrative Depreciation & amortization Operating l
Slide 30: 1st Quarter Financial Results – Net Income (Loss)
1st Quarter Financial Results – Net Income (Loss) Q1 2017 $ 000s $(907) $(1,157) $93 $(13) $(330) Operating Finance Other Income tax Net income loss expense expenses Q1 2018 expense (loss) (income) (income) (recovery) $ 000s $(505) $(387) $98 $20 $(236) Operating Finance Other Income tax Net income
Slide 31: 1st Quarter Financial Results – EBITDA
1st Quarter Financial Results – EBITDA Q1 2017 $(413) $ 000s $(907) $93 $731 $(330) Net income Finance Income tax Depreciation EBITDA (loss) expense expense & (income) Q1 2018 amortization (recovery) $267 $ 000s $(387) $98 $792 $(236) Net income Finance Income tax Depreciation EBITDA (loss) expense
Slide 32: Questions?
BiG ROCK BREWERY BiG ROCK BREWERY Questions? f