Transcontinental announces its results for fiscal 2019

Highlights

• Revenues of $3,038.8 million for fiscal 2019, the highest in the company’s history, up 15.8% compared to 2018.
• Adjusted revenues ⁽¹⁾ of $3,027.1 million for fiscal 2019, up 20.1% compared to 2018.
• Adjusted operating earnings before depreciation and amortization ⁽¹⁾ of $475.8 million, up 3.6%.
• Operating earnings of $309.5 million, down 15.8%.
• Adjusted operating earnings ⁽¹⁾ of $348.0 million, down 2.5%.
• Net earnings of $166.1 million ($1.90 per share) for fiscal 2019 compared to $213.4 million ($2.59 per share) for 2018.
• Adjusted net earnings ⁽¹⁾ of $220.2 million ($2.52 per share) for fiscal 2019 compared to $239.4 million ($2.91 per share) for 2018.
• Cash flows from operating activities of $431.6 million, up 38.1%.
• Sold the Fremont, California building to Hearst for US$75 million (approximately C$100 million).
• Sold specialty media assets and event planning activities to Contex Group Inc. and Newcom Media Inc.
• Acquired Holland & Crosby Limited, a manufacturing company specialized in in-store marketing product printing.
• On November 27, 2019, announced it entered into a definitive agreement to sell its paper and woven polypropylene packaging operations to Hood Packaging Corporation for a price of US$180 million (approximately C$239 million) subject to working capital adjustments and regulatory approvals.

(1) Please refer to the section entitled “Non-IFRS Financial Measures” in this press release for a definition of these measures.

Transcontinental Inc. (TSX: TCL.A TCL.B) announces its results for the fourth quarter and fiscal 2019, which ended October 27, 2019.

“2019 was marked by the successful integration of Coveris Americas, a turning point in our transformation, said François Olivier, President and Chief Executive Officer of TC Transcontinental. In only two years, we grew our revenues by 50% to reach more than $3 billion in 2019, a first in our company’s history. We executed on our growth strategy and rigorously managed risk. I am very pleased with our company’s evolution in positioning us to create long-term value.

“In our Packaging Sector, in accordance with our plan, we increased our operating earnings margin before depreciation and amortization quarter after quarter during the fiscal year, thanks to realized synergies and efficiency gains. We are building the foundations needed to generate long-term sustainable organic growth and remain committed to improving profitability in the coming years. We are well positioned and our portfolio of products and services will continue to evolve in line with our strategy to focus on markets where we have a lasting competitive advantage.

“In our Printing Sector, we experienced a difficult year overall, marked by the greater than expected decline in our revenues from retailer-related services. Despite the circumstances, we once again recorded an excellent operating earnings margin before depreciation and amortization and strong cash flows. In addition, we implemented cost management measures to help mitigate these impacts. In the coming years, we will continue optimizing our printing platform and seize growth opportunities in certain promising verticals, such as book printing and in-store marketing products.

“Despite the challenges we faced in the Printing Sector, we generated cash flows from operating activities of over $430 million, up 38.1% compared to the previous fiscal year, which were mainly used to reduce our net indebtedness, as per our plan. Finally, I am confident that the Publisac will continue to play an important role in the years ahead. We are committed to defending the interests of the Publisac and of all its stakeholders, namely the thousands of employees who are part of the production and distribution process everywhere across Québec, merchants, local newspaper publishers as well as the millions of citizens who benefit from it every week. We remain convinced that the situation will result in a positive outcome.”