Rogers Sugar Inc. · TSX:RSI
Rogers Sugar — Investor Presentation (May 2024)
30 slides from Rogers Sugar's investor presentation, May 22, 2024
Slide 1: Rogers Refined: Presentation to Equity Research Analysts
Rogers Refined Presentation to Equity Research Analysts May 22, 2024
Slide 2: Forward-looking Statements
Forward-looking Statements This report contains statements or information that are or may be “forward-looking statements” or “forward-looking information” within the meaning of applicable Canadian Securities laws. Forward-looking statements may include, without limitation, statements and information
Slide 3: Agenda
Agenda • Welcoming Remarks and Introduction • Management’s Presentation - Mike Walton & JS Couillard • Global view of Sugar market • Business review – Sugar and Maple • LEAP Project (Expansion) • Visit of the Montreal Sugar Refinery – Adam James & Christian Nassar • Lunch and follow-up discussion 3
Slide 4: Global Sugar Market
Global Sugar Market
Slide 5: Sugar Consumption in the US
Sugar Consumption in the US • US-Mexico-Canada is almost the World’s largest Sugar market. • Steady growth in consumption since the 90s • GDP – Historically, driving demand • US $27B • Mexico $1.8B • Canada 2.1B • Population – Consumption per capita is steady • US 340M • Mexico 128M • Canada 38M US
Slide 6: Imports Play a Big Role in Meeting US Demand
Imports Play a Big Role in Meeting US Demand US rely on imports to meet demand for sweetener. 6
Slide 7: Mexico is not the Solution
Mexico is not the Solution Mexico is no longer able to close the gap and alternative supply options are necessary to meet demand. 7
Slide 8: #16 to #11 Pricing Differential Favoring Canada
#16 to #11 Pricing Differential Favoring Canada The spread between #11 and #16 continues to be wide, and favours Canada. Sugar Containing Products (SCPs) manufacturing companies are taking advantage of the spread and other favourable conditions to build or expand production facilities in Canada. 8
Slide 9: Business Overview
Business Overview
Slide 10: Our Business
Our Business Rogers Sugar Inc. Rogers Sugar Inc. is the holding company TSX: RSI of Lantic Inc. • Lantic makes sugar and other all-natural sweeteners under the Rogers and Lantic brands • Lantic owns The Maple Treat Corporation that makes all-natural maple products Rogers Sugar is traded as RSI on th
Slide 11: Our Strategy
Our Strategy We seek to generate consistent, profitable and sustainable growth by optimizing our business to take advantage of the very favourable Canadian economics and demand trends in Sugar and to drive stronger performance and margins in Maple. 11
Slide 12: Rogers Refined: Better company, better investment
Rogers Refined: Better company, better investment Strategic Focus Long-term Goal Modernizing, Optimizing and Modernized, expanded facilities and labour Progress to Date Growing in Sugar agreements that enable long-term growth • 22% increase in adjusted EBITDA Automated and efficient production Drivi
Slide 13: Investment Highlights
Investment Highlights • Compelling fundamentals in our Sugar business, representing ~80 per cent of revenue, with diversification provided by our Maple business • As the largest publicly traded Canadian sweetener producer, Rogers offers investors the opportunity to benefit from 1. Growth in the Nort
Slide 14: Canada's Market Advantages
Canada’s Market Advantages • Favourable sugar economics • Location close to major U.S. markets and with excellent transportation links • Skilled workforce • Reliable sugar production infrastructure • Stable government and trade policy framework 14
Slide 15: Growth in Canadian Food Manufacturing
Growth in Canadian Food Manufacturing Blommer to Shutter Chicago Manufacturing Facility, Expand in Ontario SCPs manufacturing companies are choosing to locate in Canada - As customers grow, we grow! 15
Slide 16: Consistent Sugar Volume Growth
Consistent Sugar Volume Growth • The Canadian Sugar Institute anticipates continued growth in demand for Sugar in Canada over the next five years. 12 Month Domestic Volumes ('000s Mt) 1,400 CAGR +1.8% 1,200 1,000 RSI 800 600 400 200 0 F'15 F'16 F'17 F'18 F'19 F'20 F'21 F'22 F'23 Redpath Lantic Roger
Slide 17: Global Leadership and Diversification
Global Leadership and Diversification • Maple offers diversification to our sweetener portfolio FY 2023 Revenues by Segment • The global maple market is valued at $1.4 billion 19% • U.S. is the largest market, followed by Japan and Germany • The Maple Treat Corporation is the world's largest bottler
Slide 18: Strong Financial Results
Strong Financial Results
Slide 19: Record Results in Q2
Record Results in Q2 ▪ New five-year agreement at Revenues ($000s) Vancouver refinery $350,000 +10.3 $300,000 ▪ Advanced progress of LEAP: % +2.1% Y/Y $250,000 construction to begin in $200,000 growth Montreal this summer $150,000 $100,000 +12.4% Y/Y $50,000 growth $0 Record consolidated Q2 2023 Q3
Slide 20: Revenue Growth in Both Sugar and Maple
Revenue Growth in Both Sugar and Maple • Healthy market conditions in both Sugar and Maple segments Revenues ($000s) • Sugar revenue grew by 12.4% 350,000 over Q2 2023 300,000 250,000 +10.3% • Maple revenue grew by 2.1% over 200,000 Q2 2023 150,000 100,000 50,000 • Maple accounted for 19.3% of reven
Slide 21: Quarterly Record for Adjusted EBITDA
Quarterly Record for Adjusted EBITDA • Focus on growth and efficiencies is producing results Adjusted EBITDA ($000s) • Adjusted EBITDA for Sugar 40,000 grew by 47.1% over Q2 2023 30,000 • Adjusted EBITDA in Maple 20,000 nearly doubled Q2 2023 10,000 • Vancouver strike impact of $2.0 million for the
Slide 22: Significant Improvement in Unit Margins
Significant Improvement in Unit Margins • Adjusted gross margin per MT $300 of $249 increased by 42% Adjusted gross margin/tonne over Q2 2023 $250 • Taking advantage of product mix and timing $200 • Continue to show impact of favourable market pricing $150 dynamics and higher contribution from sugar
Slide 23: Operating Efficiency Drives Profits in Maple
Operating Efficiency Drives Profits in Maple • Significant improvement in Adjusted EBITDA in Maple to $4.9 million in Q2 • Shows benefits of historical investment in automation and process efficiency • Strong maple crop supports inventory replenishment to drive revenue for balance of the year Maple
Slide 24: Financial Outlook
Financial Outlook
Slide 25: Lantic - Well Position for Future Growth
Lantic - Well Position for Future Growth • Steady growth in profitability and volume expected to continue, supporting the expansion of our Eastern capacity and logistic assets (LEAP Project). • 2024 expected to surpass 2023 25
Slide 26: 2024 Outlook
2024 Outlook • Management continues to focus on optimizing the business and delivering growth in consolidated adjusted EBITDA. • Economics, trade ties, location continue to favour Canadian sugar. • Demand is growing and we are positioning our business to meet that demand. • Added capacity in Montrea
Slide 27: Eastern Expansion Project "LEAP"
Eastern Expansion Project “LEAP”
Slide 28: LEAP Highlights
LEAP Highlights ▪ Increase capacity of Montreal plant by ~20% - from 545,000MT to 645,000MT to meet growing demand ▪ Project cost estimated at $200M – including refining capacity increase in Montreal and incremental rail and storage logistic infrastructures in Montreal and Toronto ▪ Incremental prod
Slide 29: Major Components of the Construction
Major Components of the Construction 29
Slide 30: LEAP Financing
LEAP Financing ▪ Investissement Quebec Loan #1 - $25M o 7 years payable monthly in equal installments from year 3 to year 7 ▪ Investissement Quebec Loan #2 - $40M o 8 years payable monthly in equal installments from year 4 to year 8 ▪ Equity issue - $112.5M o Issued 22,769,232 shares on March 4, 202