TC Transcontinental at a glance
We are Canada’s largest printer and a key supplier of flexible packaging in North America. The Corporation is also a leader in its specialty media segments.
Our mission: create products and services that allow businesses to attract, reach and retain their target customers
Our vision: secure our position as Canada’s largest printer and as a leader in our specialty media segments while evolving the organization to be a North American leader in flexible packaging.
Our growth strategy is focused on 4 basic principles:
1) Be the leader in the markets served;
2) Establish a competitive advantage;
3) Build a loyal clientele;
4) Maintain a disciplined approach to acquisitions and financial management.
For the next three years, we will:
1) Defend and strengthen our printing platform;
2) Grow our Packaging division;
3) Develop our specialty media activities.
Key Investment Considerations
With a clear strategy focused on three objectives, TC Transcontinental is committed to creating sustainable long-term value by building on an already strong position. Our excellent financial performance and our strong balance sheet are two of the key elements that allow us to reward our shareholders and allocate capital to support our growth.
- Operational excellence
One of the drivers of TC Transcontinental’s long-term growth is the optimization of its printing platform. From 2007 to 2010, we first strategically invested over $800 million to modernize our equipment to innovative technologies. With these investments, we were able to offer our services to new customers, increase productivity and lower our cost structure, making printing less costly and more competitive compared to other forms of media, especially in the flyer printing segment. Since then, we have continuously been aiming to maximize the capacity utilization rate of this state-of-the-art hybrid platform.
Printing division(2) adjusted operating earnings(1) (in millions of dollars)
(1) Non-IFRS financial measure. Adjusted operating earnings is operating earnings before restructuring and other costs (gains) and impairment of assets.
(2) Historical revenues and adjusted operating margin(1) of the printing division include those of the distribution and premedia activities.
(3) The 2013 figures have been restated to reflect the impact of amended IAS 19 "Employee Benefits", IFRS 11 "Joint Arrangements" and other items.
- Investing for the future
Since 2014, TC Transcontinental has completed five acquisitions in flexible packaging, namely the acquisition of Les Industries Flexipak Inc. subsequent to the end of the fiscal year 2017, with each of them bringing attributes that are complementary and significant to our development. In 2017, in combination with organic growth in revenues in our packaging activities, we generated $308 million, or 15% of our consolidated revenues(1). In addition, we already stand out as a significant player in some markets. We intend to continue diversifying our offering and increase our market share by acquiring assets and relying on our sales force to retain our current customers and develop our sales funnel.
(1) Excluding inter-segment sales.
- Capturing growth opportunities
TC Transcontinental decided to refocus its media activities in promising niches generating revenues that are less exposed to advertising budgets. Today, we offer rich and relevant content, including an event planning component, to communities of interest in the business, financial and construction fields. We have also published, to date, 12,700 French-language educational, professional and general interest titles. In 2017, these activities generated $99 million in revenues, of which close to 75% are non-advertising based. We have increased the potential of our portfolio and are well-positioned to capture growth opportunities both organically and through acquisitions.
- Maintaining significant cash flows
TC Transcontinental generates significant cash flows from its operating activities(1). Our financial strength has enabled us, since the start of our transformation into packaging in 2014, to deploy $428 million to make acquisitions, in particular in flexible packaging, and reinvest $274 million in initiatives aimed at sustaining organic growth and increasing productivity. In addition, we distributed $248 million to our shareholders through dividends and share buybacks.
Cash flows from operating activities(1) and capital allocation (in millions of dollars)
(1) Cash flow generated by operating activities before changes in non-cash operating items and income taxes paid.
(2) Payment of a special dividend of $77.9 million in addition to the regular dividend of $45.2 million.
- Strong financial position
TC Transcontinental did not hesitate in the past to temporarily increase its indebtedness level over a net indebtedness ratio(1) of 2.0x to implement certain strategic decisions. This was the case from 2007 to 2010, when we modernized our printing platform. We have since continuously reduced our indebtedness level and, with a net indebtedness ratio(1) of 0.3x and no debt maturity until 2019, we enjoy a strong financial position and have the flexibility required to continue our transformation into the packaging industry.
Net indebtedness(1) (in millions of dollars) and net indebtedness ratio(1)
(1) Non-IFRS financial measure. Net indebtedness represents total of long-term debt plus current portion of long-term debt less cash. The net indebtedness ratio is calculated by dividing the net indebtedness by the last 12 months adjusted operating earnings before depreciation and amortization.
(2) As previously reported and including securitization.
(3) As previously reported.
(4) The 2013 figures have been restated to reflect the impact of amended IAS 19 "Employee Benefits", IFRS 11 "Joint Arrangements" and other items.
- Attractive dividend payments
One of TC Transcontinental’s capital allocation priorities has always been to regularly pay dividends to its shareholders. Our strong financial position has enabled us to distribute $61 million to our shareholders in 2017, or 79 cents per participating share. Since 1993, the year when we started paying dividends, our dividends have increased at a compound annual growth rate of 11.3%. Further, in 2013, we paid a special dividend of one dollar in addition to the regular dividend of 58 cents. We also deployed over $220 million to buyback shares using an opportunistic approach.
Dividends paid per participating share (in cents)
(1) Payment of a special dividend of $1.00, in addition to the regular dividend of $0.58.
- A responsible corporate citizen
For TC Transcontinental, acting as a corporate citizen means pursuing its activities by managing environmental issues in a responsible manner, being actively involved in the communities where it operates, being an employer of choice committed to developing talent and using its financial resources wisely to ensure its long-term growth.
Ranked 14 times by Corporate Knights as one of the Best 50 Corporate Citizens in Canada
Participates in the Carbon Disclosure Project since 2012
Included in the Jantzi Social Index® since 2004