Overview

TC Transcontinental at a glance

$3.0B Revenues 2019

Approximately 8,500 employees

40 operating
facilities

TC Transcontinental is a leader in flexible packaging in North America, and Canada’s largest printer. The Corporation is also the leading Canadian French-language educational publishing group.

Our mission: create quality products and services that allow businesses to attract, reach and retain their target customers.

Our vision: become a market leader in flexible packaging in North America while maintaining our position as Canada’s largest printer and as the leading Canadian French-language educational publishing group.

Our three-pronged strategy is:

Grow our Packaging Sector through organic sales growth and acquisitions;
Optimize our printing platform and capture growth opportunities in promising verticals;
Grow our book publishing and Groupe Constructo activities through organic growth and acquisitions.

Key Investment Considerations

Ability to generate significant cash flows
Leader in most of our verticals
Solid relationships with our customers
History of dividend growth
Family-controlled business with a long-term vision
Investment grade credit rating
Pursuing our business activities in a responsible manner

Committed to long-term value creation

TC Transcontinental is driven by a long-term vision. Over the years, we have adapted to trends in the industries where we operate in order to reinvent ourselves and ensure our continuity. As a family-controlled corporation, our ambitions are clear: continue to build for profitable and lasting growth. This is why we made a strategic shift into flexible packaging, a promising growth axis for the Corporation. Thanks to our solid financial performance and healthy balance sheet, we have built an extensive packaging platform through several strategic acquisitions. In 2019, we fully integrated the operations of Coveris Americas, thus positioning ourselves as a leader in flexible packaging in North America. In only five years, our revenues from this sector went from 2% to 53% of our consolidated¹ revenues. We are all committed to pursuing our transformation in order to create long-term value for our stakeholders.

¹ Excluding inter-segment eliminations.

Evolution of our consolidated¹ revenue composition

Evolution of our consolidated revenue composition

Committed to operational excellence: TC Transcontinental is recognized for its solid track record of continuous improvement and manufacturing excellence. Over the past few years, despite a decline in revenues in the Printing Sector, we have implemented operational efficiency measures to protect our profitability. In addition, in the Packaging Sector, we succeeded in increasing our operating earnings margin before depreciation and amortization since the acquisition of Coveris Americas in May 2018. The Corporation also continuously generates significant cash flows from its operating activities. For the last fiscal year, they totalled $431.6 million.

Cash flows from continuing operating activities

Cash flows from continuing operating activities

Committed to the dividend: The Corporation has always focused on the dividend paid to shareholders: since 2010, the dividend has increased at a compound annual growth rate (CAGR) of 10.6%. We strive to achieve a fair balance in our capital allocation between debt repayment, dividend payments, share buybacks and reinvesting in growth, namely for targeted acquisitions. In 2019, dividends paid of $76.0 million represent only 17.6% of cash flows from operating activities.

Dividends paid per participating share

Dividends paid per participating share

Committed to maintaining a solid financial position and an investment grade credit rating

Maintaining a healthy financial position and an investment grade credit rating has always been among the Corporation’s primary objectives. We manage our capital prudently and effectively, while allowing a temporary increase in our indebtedness level in order to implement our strategic plans. During 2018, our net indebtedness¹ increased significantly when we acquired Coveris Americas to crystallize our shift into flexible packaging. As we have done in the past, we will now concentrate on reducing our net indebtedness¹ level over the coming quarters to increase our financial flexibility. In fiscal 2019, we reduced our net indebtedness¹ by over $250 million.

¹ Non-IFRS financial measure. A complete definition of the non-IFRS financial mesures and reconciliation to IFRS financial measures are presented in the Management’s Discussion and Analysis of this annual report on page 14.

Net indebtedness¹ and net indebtedness¹ ratio (in millions of dollars for net indebtedness¹)

Net imdebtedness

A responsible corporate citizen: Over time, TC Transcontinental has distinguished itself as a high-performing organization, which acts according to its values and demonstrates leadership in operating its activities in a responsible manner. As we pursue our transformation into flexible packaging for long-term growth, we intend to remain a leader in corporate social responsibility namely by setting objectives to reduce our environmental footprint.