Sunopta — ICR Conference 2018
28 slides from Sunopta's conference presentation, Jan 9, 2018
Slide 1: ICR Conference January 2018
ICR Conference January 2018
Slide 2: Forward Looking Statements
Forward Looking Statements This presentation may include forward-looking statements and therefore is subject to important risks and uncertainties. Actual results could differ materially from the conclusions, forecasts and projections as certain material factors and assumptions were applied in drawin
Slide 3: Healthy Food Company with Global Reach
Healthy Food Company with Global Reach To be the most innovative, integrated provider of Our organic ingredients and healthy food solutions Purpose across multiple channels • Innovate in growing healthy food and beverage categories Key • Invest in and grow efficient integrated supply chains Strategi
Slide 4: Operate in Growing Markets
Operate in Growing Markets ORGANIC US Food & Beverage Underpinned by SALES ($ Billions) 8.4% Y-O-Y Growth Growing Consumer Trends $43 $40 $36 Awareness of Linkage Between Diet & Health 2014A 2015A 2016A Source: 2017 Organic Trade Association Survey NON GMO - LABELED GMO, Food Additive US Food & Beve
Slide 5: Integrated Business Model
Integrated Business Model “FIELD TO TABLE” INTEGRATION GLOBAL RETAIL (P/L) SOURCING & FOODSERVICE PLATFORM MANUFACTURING SOLUTIONS Field Table TRANSFORMING INPUTS INTO SERVING APPROX. VIA A NETWORK OF APPROX. WE SOURCE FROM INGREDIENTS & CONSUMER 3,300 GLOBAL APPROX. 5,000 SUPPLIERS PRODUCTS VIA ENC
Slide 6: Global Ingredients
Global Ingredients Product Categories Revenue Composition • Beans & Pulses • Grains • Berries • Oils & Fats • Rice • Citrus • Seeds & Kernels • Dairy Products • Tropical Fruits • Flour, Starch & Flakes • Tastemakers • Stone Fruits • Nuts • Sugar & Sweeteners • Vegetables • Cocoa Products • Dried Fru
Slide 7: Consumer Products
Consumer Products Product Categories Revenue Composition • Aseptic Non-Dairy • Fruit Snacks • Aseptic Broths • Roasted Snacks • Aseptic Teas • IQF Fruit for Retail • Refrigerated Premium • Formulated Fruit Solutions Juices for Foodservice • Functional Waters • Custom Formulated Fruit • Shelf Stable
Slide 8: Indicative Customer Base
Indicative Customer Base Representative Retail and Representative Brands Food Service Customer Base Customer Base 8
Slide 9: Value Creation Plan
Value Creation Plan • Detailed, multi-year turn around plan announced in November 2016 and officially launched in February 2017 • Designed to maximize the Company's ability to deliver long-term value to its shareholders • Value creation outcome targeting between 10 – 11% EBITDA as a percentage of re
Slide 10: Four Pillars to the Value Creation Plan
Four Pillars to the Value Creation Plan Portfolio Operational Go-to-Market Process Optimization Excellence Effectiveness Sustainability • Invest in the business • Ensure food quality • Optimize the • Streamline and where structural and worker safety customer and product strengthen the advantages exi
Slide 11: Phased Approach to the Value Creation Plan
Phased Approach to the Value Creation Plan • Solidify the Foundation for Consistent Quality and Service Performance, drive Productivity Enhancements and re-vamp Sales and Marketing Organization • Plan calls for increased SG&A and seasonal improvements to GM% Phase 1 • Cash is used to invest in the b
Slide 12: Recent Timeline
Recent Timeline Q4 2016 Q1 2017 Q2 2017 Q3 2017 • Strategic partnership with • Appointment of David • Significant upgrades in • Announced exit from Oaktree, and $85M Colo as CEO leadership talent flexible re-sealable pouch preferred share issuance products • Announced closure and • Launched network-
Slide 13: Planned Investment in 2017
Planned Investment in 2017 To Establish Solid Foundation for Additional EBITDA Growth $70 $60 $60 $8 $8 $50 $ Millions $40 Non- $37 structural $30 cash costs $52 $20 $10 $15 $- Incremental Capital Consulting, Severance, Incremental Headcount Phase 1 Cash Expenditures Recruiting and Closure in Qualit
Slide 14: Phase 1 of Value Creation Plan: Targeting $31M Run-Rate EBITDA Improvements
Phase 1 of Value Creation Plan Targeting $31M of run-rate EBITDA Improvements $35 $31 $30 $1 - $25 $21 $ Millions $20 $23 $15 $10 Savings to be realized in 2017 $5 $10 $7 $- Portfolio Operational Go-to-Market Process Phase 1 EBITDA Optimization Excellence Effectiveness Sustainability Increase 14
Slide 15: Tracking Our Progress
Tracking Our Progress Established PMO function to track and audit EBITDA improvements generated by the Value Creation Plan Identified Implemented ($millions) Portfolio Optimization 6.6 6.0 Operational Excellence 23.0 5.3 Go-to-Market Effectiveness * 1.2 1.2 Process Sustainability n/a n/a Total 30.8
Slide 16: Delivering Long-Term Shareholder Value
Delivering Long-Term Shareholder Value As part of the Value Creation Plan… • We will focus on food safety, quality and execution. • We will be focused and decisive as we execute our strategic plan. • We will focus on long-term value creation. • We will make decisions with a long-term focus, even if
Slide 17: NOTES
NOTES Sun@pta
Slide 18: SunOpta - Bringing well-being to life
SunCopta Bringing well-being to life
Slide 19: Appendix
Appendix Additional Details on the Four Pillars to the Value Creation Plan Key Financial Metrics Reconciliation of Non-GAAP Measures This presentation includes certain measures not derived in accordance with generally accepted accounting principles (“GAAP”). Such measures should not be considered su
Slide 20: Portfolio Optimization
Portfolio Optimization Actions to Date • Closed unprofitable juice facility in San Bernardino, CA and soy Portfolio extraction facility in Heuvelton, NY Optimization • Exited certain varieties of specialty soy and sunflower, and a non-core • Invest in the vegetable brokerage operation business where
Slide 21: Operational Excellence
Operational Excellence Actions to Date • Enhanced food safety and quality across the manufacturing platform Operational via the roll-out of new processes and systems Excellence • Launched a productivity enhancement program that is systematically • Ensure food quality and evaluating all manufacturing
Slide 22: Go-to-Market Effectiveness
Go-to-Market Effectiveness Actions to Date • Activated a new food service distribution and sales brokerage network, Go-to-Market leveraging third parties, which will support the Company’s plan to grow Effectiveness and diversify penetration into the food service channel • Optimize the • Created chan
Slide 23: Process Sustainability
Process Sustainability Actions to Date • New leadership team: Process o Appointed new CEO, COO for CPG, CHRO, CIO, CQO, SVP of Sustainability Operations and Engineering, SVP of Supply Chain, and Chief • Streamline and Customer Officer strengthen the o Also filled other management level positions in
Slide 24: Key Financial Metrics - Income Statement
Key Financial Metrics - Income Statement ($ millions, except per share amounts, excludes results from Q3 2017 Q3 2016 discontinued operations) Revenues (1) $320.7 $348.7 Gross profit (2) 36.5 [37.7] 41.0 [43.6] As % of Revenue 11.4% [11.8%] 11.8% [12.3%] Operating income (3) 5.0 [8.6] 13.2 [16.8] As
Slide 25: Key Financial Metrics - Balance Sheet
Key Financial Metrics - Balance Sheet September 30, 2017 December 31, 2016 ($millions) Working Capital (1) $ 395.1 $ 360.0 Total Assets 1,133.1 1,129.6 First Lien Debt 259.0 201.5 Second Lien Debt (2) 222.8 222.2 Other Debt 8.0 8.9 Total Debt 489.8 432.6 (1) Working capital is defined as current ass
Slide 26: Reconciliation of GAAP Results to Adjusted Earnings and Adjusted EPS
Reconciliation of GAAP Results to Adjusted Earnings and Adjusted EPS Q3 2017 Q3 2016 Excluding Excluding flexible Flexible flexible Flexible realable realable realable realable ($ millions, except per share amounts; totals may not sum due to pouch and pouch and pouch and pouch and rounding) nutritio
Slide 27: Reconciliation of GAAP Results to Operating Income, EBITDA and Adjusted EBITDA
Reconciliation of GAAP Results to Operating Income, EBITDA and Adjusted EBITDA Q3 2017 Q3 2016 Excluding Excluding flexible Flexible flexible Flexible realable realable realable realable pouch and pouch and pouch and pouch and ($ millions, totals may not sum due to rounding) nutrition bar nutrition
Slide 28: 2233 Argentia Road Suite 401, West Tower Mississauga, Ontario L5N 2X7
2233 Argentia Road Suite 401, West Tower Mississauga, Ontario L5N 2X7 www.sunopta.com