Transcontinental Inc. Class A · TSX:TCL.A
Transcontinental Inc. Class A — Cercle finance et placement du Québec (April 2013)
39 slides from Transcontinental Inc. Class A's conference presentation, Apr 4, 2013
Slide 1: Cercle finance et placement du Québec
Cercle finance et placement du Québec Nelson Gentiletti Chief Financial and Development Officer April 4, 2013
Slide 2: Forward-Looking Statement
Forward-Looking Statement This presentation contains certain forward-looking statements concerning the future performance of the Corporation. Such statements, based on the current expectations of management, inherently involve numerous risks and uncertainties, known and unknown. We caution that all
Slide 3: Table of Contents
Table of Contents TC Transcontinental Overview Market Trends and Strategy Evolution of our Businesses over the Past 5 Years Priorities for the Next 5 Years Conclusion 3
Slide 4: TC Transcontinental Overview
TC Transcontinental Overview
Slide 5: Operating in Niche Markets
Operating in Niche Markets 2012 Revenues: $2.1B $1,480M $712M PRINTING(1) 68% MEDIA(1) 32% Retail and Newspapers $885 Local* $366 Magazines and Books $330 National** $253 Commercial Products $265 Business & Education*** $93 Good future prospects Moderate future prospects Challenging future prospects
Slide 6: Offering a Diversified Portfolio of Solutions
Offering a Diversified Portfolio of Solutions CUSTOM CONTENT NEWSPAPERS MOBILE MARKETING DIGITAL MEDIA PRINT DATABASE DISTRIBUTION & RESEARCH OUR SERVICES E-MAIL MAGAZINES MARKETING MARKET MONITORING DIGITAL PRINT EVENTS FLYERS 6
Slide 7: Offering Printed Solutions
Offering Printed Solutions 7
Slide 8: Offering Solutions Beyond Printing
Offering Solutions Beyond Printing VIDEO TC MEDIA 8
Slide 9: Market Trends and Strategy
Market Trends and Strategy X @ TRANSCONTINENTAL AMARKETING ACTIVATION COM >
Slide 10: Changing Market Trends
Changing Market Trends 1 Multiplication of communication platforms 2 Moving from mass to personalized content 10
Slide 11: Keeping Ad Spending In Print Products
Keeping Ad Spending In Print Products $15 billion advertising market in Canada in E2012 Community Newspapers, 8% Trade, 1% Directories, 40% 5% Catalogue / Direct Mail, 9% TV, 24% General Magazines, 4% Of advertising spending is in Radio, 10% print products Daily Newspapers, 13% Out-of Home and other
Slide 12: Adjusting our Strategy to New Market Realities
Adjusting our Strategy to New Market Realities 1 BUILD ON EXISTING 2 DEVELOP THE NEW Offering our traditional, yet proven products and Accompanying our customers in their new services marketing needs 12
Slide 13: Evolution of our Businesses over the Past 5 Years – Printing Sector
Evolution of our Businesses over the Past 5 Years – Printing Sector
Slide 14: Increasing the Profitability of the Printing Sector
Increasing the Profitability of the Printing Sector 1 Investing in our platform 2 Exiting some print businesses 3 Securing future cash flow 4 Consolidating the print market in Canada 14
Slide 15: Investing in our Platform
Investing in our Platform Investments in our hybrid platform $229M $257M $155M $130M $125M $114M $70 M $47M $50M 2005 2006 2007 2008 2009 2010 2011 2012 2013E Capital expenditures, including intangibles (in $M) Media & other Print 15
Slide 16: Exiting some Print Businesses
Exiting some Print Businesses Divested over $300 M of print businesses over the last four years Black & Small US Mexican US direct white book retail operations mail printing operations 16
Slide 17: Securing Future Cash Flow
Securing Future Cash Flow Close to 75% of the Print Sector revenues are under contract* 8% 92% 10% 45% 90% 65% 55%* 35% Contract length 3-6 years 10-15 years 2-6 years 2-6 years * Magazine only: 75% under contract 17
Slide 18: Consolidating the Print Market in Canada
Consolidating the Print Market in Canada Closed the acquisition on March 1, 2012 The integration is progressing well (half the facilities have been closed so far) On track to generate the anticipated synergies of more than $40M over the next 18 months 2012 synergies were $11M; 2013 at least $13M Int
Slide 19: Increasing Profitability
Increasing Profitability Quad/Graphics 225 Canada, Inc. 60 54 plants acquisition 48 plants 50 200 $198M $200M 38 plants 40 29 plants 29 plants 175 $180M 30 20 150 $148M $147M 10 125 - 2008 2009 2010 2011 2012 Printing Sector Adjusted Operating Income (in $M) And Number of Plants 19
Slide 20: Evolution of our Businesses over the Past 5 Years – Media Sector
Evolution of our Businesses over the Past 5 Years – Media Sector
Slide 21: Developing Non-Traditional Revenue Streams
Developing Non-Traditional Revenue Streams 1 Increasing our reach 2 Enriching our content 3 Expanding our multiplatform offering 4 Streamlining our operational structure 21
Slide 22: Increasing our Reach
Increasing our Reach 24.1 million Canadian consumers reached Reach in 180 community 10 daily Métro Halifax +30 business Geo targeted Digital network Database Canada newspapers newspapers and Montreal and consumer distribution of more than mag. 3,500 websites 88% 6.8M 426K 1.5M 11.9M 12.7M 19.9M 1.1M
Slide 23: Enriching our Content
Enriching our Content Acquisitions and Launches • Éditions Caractère Educational, professional and consumer titles • Groupe Modulo • Valleyfield Express.ca • Tout Magazine • Courrier Frontenac Local community newspapers • Édition Beauce • Métro Montreal • And more • Fresh Juice Magazines in our comm
Slide 24: Expanding our Multiplatform Offering
Expanding our Multiplatform Offering Launched a television production house and started hosting the live morning show “Ça commence bien!” Developed a remote parking payment solution application – P$ Mobile Service Developed a food mobile application “On the table” Launched mobile versions of our com
Slide 25: Streamlining our Operational Structure
Streamlining our Operational Structure 1 Unification project : Regroup our weeklies and distribution activities in Quebec and Ontario. 2 Content creation and editorial: Create an efficient archive of our content and optimize the structure of our teams 3 Project T: Simplification of our administratio
Slide 26: Growing Non-Traditional New Revenue Streams
Growing Non-Traditional New Revenue Streams + 26% CAGR $194M $198M $183M $170M $78M 2008 2009 2010 2011 2012 26
Slide 27: Evolution of our Businesses over the Past 5 Years – Financials
Evolution of our Businesses over the Past 5 Years – Financials
Slide 28: Improving our Financial Position
Improving our Financial Position 1 Reducing debt 2 Increasing return on net assets 3 Increasing free cash flow 28
Slide 29: Reducing Debt
Reducing Debt 1000 3.0 2.6x 2.6x 800 $908M $903M 1.9x 2.0 600 $699M 1.5x 1.3x $539M 400 $471M 0.9x 1.0 $334M 200 0 - 2008 2009 2010 2011 2012 Q1'2013 Note: Including securitization. 2011 is adjusted to exclude the amount to be paid to Quad/Graphics following the closing of the transaction to acquire
Slide 30: Increasing Return on Net Assets
Increasing Return on Net Assets 8.7% 8.8% Investments in our hybrid platform 8.0% 7.7% 6.9% 0.05 2008 2009 2010 2011 2012 30
Slide 31: Increasing Free Cash Flow
Increasing Free Cash Flow 300 300 280 280 260 260 240 $257 $220 240 220 220 $229 $194 200 200 180 180 160 $141 160 140 140 120 120 $125 100 100 80 80 $49 60 60 40 40 $47 20 $37 20 0 - -$27 -20 -20 -40 -40 2008 2009 2010 2011 2012 CAPEX Free Cash Flow Free cash flow is adjusted operating income befor
Slide 32: Returning Cash to Shareholders
Returning Cash to Shareholders $143M $12M $78M $74M $70M $17M $47M $49M $35M $26M $47M $53M $53M $35M $25M $26M 2008 2009 2010 2011 2012 2013F Dividends Special Dividend Share Buybacks 32
Slide 33: Priorities for the Next 5 Years
Priorities for the Next 5 Years
Slide 34: Print Sector Priorities
Print Sector Priorities 1 Pursuing Quad integration Generating $40M in synergies 2 Working on client retention Margin expansion 3 Organic sales growth Pockets of growth 34
Slide 35: Media Sector Priorities
Media Sector Priorities 1 Local: Moving to a multi- Selling bundles to SMBs product organization National: Increasing sales of 2 integrated marketing solutions Increase sales and monetize in paid and owned media new products Business & Education: Grow B2B events and strengthen 3 Increase non-adverti
Slide 36: Financial Priorities
Financial Priorities 1 Reducing debt Maintaining flexibility 2 Growing organically Investing 3 Acquiring new assets Acquisition in related niches 4 Returning cash to shareholders Paying dividends and buying back shares 36
Slide 37: Conclusion
Conclusion t\ @ TRANSCONTINENTAL AMARKETING ACTIVATION COM wr
Slide 38: Well Positioned to be Successful
Well Positioned to be Successful 1 Generating synergies in the Printing Sector 2 Enhancing our offering in the Media Sector 3 Maintaining our flexibility for long term growth 38
Slide 39: Merci!
Merci! X @ = TRANSCONTINENTAL AMARKETING ACTIVATION COMPANY
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