Highlights
- Increase in revenues and earnings in the Packaging Sector and the Media Sector.
- Revenues of $802.2 million for the quarter ended October 30, 2022; operating earnings of $85.3 million; and net earnings attributable to shareholders of the Corporation of $60.4 million ($0.70 per share).
- Adjusted operating earnings before depreciation and amortization(1) of $141.1 million for the quarter ended October 30, 2022; adjusted operating earnings(1) of $99.1 million; and adjusted net earnings attributable to shareholders of the Corporation(1) of $68.4 million ($0.79 per share).
- Significant contributions from the acquisitions completed during the fiscal year to the earnings of the Corporation.
(1) Please refer to the section entitled "Non-IFRS Financial Measures" in this press release for a definition of these measures.
MONTRÉAL, Dec. 13, 2022 (GLOBE NEWSWIRE) -- Transcontinental Inc. (TSX: TCL.A TCL.B) announces its results for the fourth quarter and fiscal year 2022, which ended October 30, 2022.
"Excluding the impact of the 53rd week and the Canada Emergency Wage Subsidy on prior year's results, we posted solid growth in net earnings in the fourth quarter," said Peter Brues, President and Chief Executive Officer of TC Transcontinental. "In a challenging environment, our coworkers remained focused on making our clients successful and improving our performance.
"Building on the momentum of the previous quarters, our Packaging Sector recorded over 10% growth in adjusted operating earnings before depreciation and amortization on a comparable basis. With our investments in equipment and innovation, we are committed to continuing our profitable growth.
"In our Printing Sector, we are pleased to see continued growth in our in-store marketing, book printing, and premedia activities. However, inflationary pressures and their impact on our volume and cost structure had a negative effect on our results.
"In fiscal 2023, we will remain focused on improving profitability and cash flows from operating activities. Our solid financial position, with no major debt maturities until 2025, gives us the flexibility to pursue our disciplined approach to profitable growth."
Financial Highlights
| (in millions of dollars, except per share amounts) | Q4-2022 | Q4-2021 | Variation in % | Fiscal 2022 | Fiscal 2021 | Variation in % | ||||||||
| 13 weeks | 14 weeks | 52 weeks | 53 weeks | |||||||||||
| Revenues | $802.2 | $775.8 | 3.4 | % | $2,956.1 | $2,643.4 | 11.8 | % | ||||||
| Operating earnings before depreciation and amortization (1) | 145.7 | 135.8 | 7.3 | 449.2 | 451.4 | (0.5 | ) | |||||||
| Adjusted operating earnings before depreciation and amortization (1) (2) | 141.1 | 143.1 | (1.4 | ) | 446.7 | 464.8 | (3.9 | ) | ||||||
| Operating earnings | 85.3 | 80.5 | 6.0 | 217.3 | 233.8 | (7.1 | ) | |||||||
| Adjusted operating earnings (2) | 99.1 | 104.9 | (5.5 | ) | 285.1 | 313.5 | (9.1 | ) | ||||||
| Net earnings attributable to shareholders of the Corporation | 60.4 | 39.2 | 54.1 | 141.2 | 130.6 | 8.1 | ||||||||
| Net earnings attributable to shareholders of the Corporation per share | 0.70 | 0.45 | 55.6 | 1.63 | 1.50 | 8.7 | ||||||||
| Adjusted net earnings attributable to shareholders of the Corporation (2) | 68.4 | 70.6 | (3.1 | ) | 189.7 | 206.4 | (8.1 | ) | ||||||
| Adjusted net earnings attributable to shareholders of the Corporation per share (2) | 0.79 | 0.81 | (2.5 | ) | 2.19 | 2.37 | (7.6 | ) | ||||||
| (1) Operating earnings before depreciation and amortization and Adjusted operating earnings before depreciation and amortization for the comparative period have been restated to conform to the presentation adopted in the current period. (2) Please refer to the section entitled "Reconciliation of Non-IFRS Financial Measures" in this press release for adjusted data presented above. Note 1: The above results include $56.5 million in revenues for the 53rd week with a consequential effect on the other measures presented for the fourth quarter of 2021. Note 2: The above results include $3.7 million in Canada Emergency Wage Subsidy for the fourth quarter of 2021, and $29.5 million for the year ended October 31, 2021. | ||||||||||||||
2022 Fourth Quarter Results
Revenues increased by $26.4 million, or 3.4%, from $775.8 million in the fourth quarter of 2021 to $802.2 million in the corresponding period of 2022. This increase is mainly attributable to the recent acquisitions, the impact of the transfer of the rise in raw materials prices and organic growth in the Printing Sector and, to a lesser extent, the favourable exchange rate effect. These factors were partially mitigated by the unfavourable impact of the 53rd week in the prior year.
Operating earnings before depreciation and amortization increased by $9.9 million, or 7.3%, from $135.8 million in the fourth quarter of 2021 to $145.7 million in the fourth quarter of 2022. The increase in operating earnings before depreciation and amortization is mainly attributable to the recent acquisitions, the favourable effect of the change in restructuring costs and, to a lesser extent, the favourable exchange rate effect. These factors were partially mitigated by the impact of the 53rd week in the prior year, the end of the Canada Emergency Wage Subsidy which the Corporation received in the prior year and, to a lesser extent, the impact of inflation on volume and the cost structure.
Adjusted operating earnings before depreciation and amortization decreased by $2.0 million, or 1.4%, from $143.1 million in the fourth quarter of 2021 to $141.1 million in the fourth quarter of 2022. The decrease in adjusted operating earnings before depreciation and amortization is mainly due to the impact of the 53rd week in the prior year, the end of the Canada Emergency Wage Subsidy and, to a lesser extent, the impact of inflation on volume and the cost structure. These factors were partially offset by the recent acquisitions and the favourable exchange rate effect.
Net earnings attributable to shareholders of the Corporation increased by $21.2 million, from $39.2 million in the fourth quarter of 2021 to $60.4 million in the fourth quarter of 2022. This increase is mainly attributable to the previously explained rise in operating earnings before depreciation and amortization, lower financial expenses and lower income taxes. On a per share basis, net earnings attributable to shareholders of the Corporation went from $0.45 to $0.70, respectively.
Adjusted net earnings attributable to shareholders of the Corporation decreased by $2.2 million, or 3.1%, from $70.6 million in the fourth quarter of 2021 to $68.4 million in the fourth quarter of 2022. This decrease is due to the previously explained decline in adjusted operating earnings before depreciation and amortization. On a per share basis, adjusted net earnings attributable to shareholders of the Corporation went from $0.81 to $0.79, respectively.
Fiscal Year 2022 Results
Revenues increased by $312.7 million, or 11.8%, from $2,643.4 million in fiscal 2021 to $2,956.1 million in the corresponding period of 2022. This increase is mainly explained by the impact of the transfer of the rise in raw materials prices, the recent acquisitions in our three operating sectors as well as well as higher volume in the Packaging Sector and the Printing Sector. These factors were partially mitigated by the unfavourable impact of the 53rd week in the prior year.
Operating earnings before depreciation and amortization decreased by $2.2 million, or 0.5%, from $451.4 million in fiscal 2021 to $449.2 million in the corresponding period of 2022. Adjusted operating earnings before depreciation and amortization decreased by $18.1 million, or 3.9%, from $464.8 million in fiscal 2021 to $446.7 million in the corresponding period of 2022. The decline in operating earnings before depreciation and amortization and adjusted operating earnings before depreciation and amortization is mainly due to the negative impact of the pandemic on production capacity at several plants during the first months of fiscal 2022, due in particular to a labour shortage, the end of the Canada Emergency Wage Subsidy which the Corporation received in the prior year and the impact of the 53rd week in the prior year. These factors were partially offset by the recent acquisitions and, to a lesser extent, the decrease in the stock-based compensation expense related to the share price. Lastly, the decrease in restructuring costs had a favorable impact on operating earnings before depreciation and amortization.
Net earnings attributable to shareholders of the Corporation increased by $10.6 million, or 8.1%, from $130.6 million in fiscal 2021 to $141.2 million in the corresponding period of 2022. This increase is mainly attributable to lower income taxes, partially mitigated by the decline in operating earnings. On a per share basis, net earnings attributable to shareholders of the Corporation went from $1.50 to $1.63, respectively, due to the above-mentioned items.
Adjusted net earnings attributable to shareholders of the Corporation decreased by $16.7 million, or 8.1%, from $206.4 million in fiscal 2021 to $189.7 million in the corresponding period of 2022, mostly as a result of the decline in adjusted operating earnings, partially offset by lower adjusted income taxes. On a per share basis, adjusted net earnings attributable to shareholders of the Corporation went from $2.37 to $2.19, respectively.
For more detailed financial information, please see the Management’s Discussion and Analysis for the fiscal year ended October 30, 2022 as well as the financial statements in the “Investors” section of our website at www.tc.tc.
Outlook
In the Packaging Sector, as a result of investing in new production equipment, signing new contracts and introducing new products to the market, we expect organic volume growth. In terms of profitability, we expect an increase in adjusted operating earnings before depreciation and amortization for fiscal year 2023 compared to fiscal year 2022. The economic conditions could however affect short-term demand.
In the Printing Sector, we expect revenue growth for fiscal year 2023 compared to fiscal year 2022 as a result of the growth in volume in our book printing and in-store marketing activities as well as the impact of the transfer of cost increases. This transfer should however have a negative impact on volume in some segments. This anticipated volume decrease, combined to the effect of inflationary pressures, should decrease adjusted operating earnings before depreciation and amortization for fiscal year 2023 compared to fiscal year 2022.
Finally, we expect to continue generating significant cash flows from operating activities, which will enable us to continue our strategic investments while reducing our net indebtedness.
Non-IFRS Financial Measures
In this document, unless otherwise indicated, all financial data are prepared in accordance with International Financial Reporting Standards (IFRS) and the term "dollar", as well as the symbol "$" designate Canadian dollars.
In addition, in this press release, we also use certain non-IFRS financial measures for which a complete definition is presented below and for which a reconciliation to financial information in accordance with IFRS is presented in the section entitled "Reconciliation of Non-IFRS Financial Measures" and in Note 3, "Segmented Information", to the annual consolidated financial statements for the year ended October 30, 2022.
| Terms Used | Definitions |
| Adjusted operating earnings before depreciation and amortization | Operating earnings before depreciation and amortization as well as restructuring and other costs (revenues) and impairment of assets. |
| Adjusted operating earnings | Operating earnings before restructuring and other costs (revenues), amortization of intangible assets arising from business combinations and impairment of assets. |
| Adjusted income taxes | Income taxes before income taxes on restructuring and other costs (revenues), impairment of assets, amortization of intangible assets arising from business combinations as well as the adjustment on additional income taxes in other jurisdictions resulting from a prior year and the tax impact of an internal reorganization. |
| Adjusted net earnings attributable to shareholders of the Corporation | Net earnings attributable to shareholders of the Corporation before restructuring and other costs (revenues), amortization of intangible assets arising from business combinations and impairment of assets, net of related income taxes as well as the adjustment on additional income taxes in other jurisdictions resulting from a prior year and the tax impact of an internal reorganization. |
| Net indebtedness | Total of long-term debt, of current portion of long-term debt, of lease liabilities and of current portion of lease liabilities, less cash. |
| Net indebtedness ratio | Net indebtedness divided by the last 12 months’ adjusted operating earnings before depreciation and amortization. |
Reconciliation of Non-IFRS Financial Measures
The financial information has been prepared in accordance with IFRS. However, financial measures used, namely adjusted operating earnings before depreciation and amortization, adjusted operating earnings, adjusted income taxes, adjusted net earnings attributable to shareholders of the Corporation, adjusted net earnings attributable to shareholders of the Corporation per share, net indebtedness and net indebtedness ratio, for which a reconciliation is presented in the following table, do not have any standardized meaning under IFRS and could be calculated differently by other companies. We believe that many of our readers analyze the financial performance of the Corporation’s activities based on these non-IFRS financial measures as such measures may allow for easier comparisons between periods. These measures should be considered as a complement to financial performance measures in accordance with IFRS. They do not substitute and are not superior to them.
The Corporation also believes that these measures are useful indicators of the performance of its operations and its ability to meet its financial obligations. Furthermore, management also uses some of these non-IFRS financial measures to assess the performance of its activities and managers.
| Reconciliation of operating earnings - Fourth quarter and fiscal year | |||||||||
| Three months ended | Year ended | ||||||||
| (in millions of dollars) | October 30, 2022 | October 31, 2021 | October 30, 2022 | October 31, 2021 | |||||
| Operating earnings | $85.3 | $80.5 | $217.3 | $233.8 | |||||
| Restructuring and other costs (revenues) | (4.6 | ) | 6.6 | (2.5 | ) | 12.7 | |||
| Amortization of intangible assets arising from business combinations (1) | 18.4 | 17.1 | 70.3 | 66.3 | |||||
| Impairment of assets | — | 0.7 | — | 0.7 | |||||
| Adjusted operating earnings | $99.1 | $104.9 | $285.1 | $313.5 | |||||
| Depreciation and amortization (2) (3) | 42.0 | 38.2 | 161.6 | 151.3 | |||||
| Adjusted operating earnings before depreciation and amortization (3) | $141.1 | $143.1 | $446.7 | $464.8 | |||||
(1) Intangible assets arising from business combinations include our customer relationships, trademarks, non-compete agreements, rights of first refusal and educational book titles.
(2) Depreciation and amortization excludes the amortization of intangible assets arising from business combinations.
(3) Depreciation and amortization and Adjusted operating earnings before depreciation and amortization have been restated to conform to the presentation adopted in the current year.
| Reconciliation of operating earnings - Fourth quarter and cumulative for the Packaging Sector | |||||||||
| Three months ended | Year ended | ||||||||
| (in millions of dollars) | October 30, 2022 | October 31, 2021 | October 30, 2022 | October 31, 2021 | |||||
| Operating earnings | $20.6 | $19.7 | $50.6 | $64.4 | |||||
| Restructuring and other costs | 3.7 | 3.9 | 9.1 | 0.9 | |||||
| Amortization of intangible assets arising from business combinations (1) | 15.6 | 15.0 | 61.3 | 60.0 | |||||
| Impairment of assets | — | 0.4 | — | 0.4 | |||||
| Adjusted operating earnings | $39.9 | $39.0 | $121.0 | $125.7 | |||||
| Depreciation and amortization (2) | 21.8 | 18.9 | 84.4 | 73.8 | |||||
| Adjusted operating earnings before depreciation and amortization | $61.7 | $57.9 | $205.4 | $199.5 | |||||
(1) Intangible assets arising from business combinations include our customer relationships, trademarks, and non-compete agreements.
(2) Depreciation and amortization excludes the amortization of intangible assets arising from business combinations.
| Reconciliation of operating earnings - Fourth quarter and cumulative for the Printing Sector | |||||||||
| Three months ended | Year ended | ||||||||
| (in millions of dollars) | October 30, 2022 | October 31, 2021 | October 30, 2022 | October 31, 2021 | |||||
| Operating earnings | $57.4 | $62.8 | $171.2 | $197.7 | |||||
| Restructuring and other costs (revenues) | (8.5 | ) | 1.5 | (6.6 | ) | 8.1 | |||
| Amortization of intangible assets arising from business combinations (1) | 2.0 | 2.0 | 8.1 | 6.1 | |||||
| Impairment of assets | — | 0.3 | — | 0.3 | |||||
| Adjusted operating earnings | $50.9 | $66.6 | $172.7 | $212.2 | |||||
| Depreciation and amortization (2) | 13.7 | 14.5 | 55.7 | 57.4 | |||||
| Adjusted operating earnings before depreciation and amortization | $64.6 | $81.1 | $228.4 | $269.6 | |||||
(1) Intangible assets arising from business combinations include our customer relationships, trademarks, and non-compete agreements.
(2) Depreciation and amortization excludes the amortization of intangible assets arising from business combinations.
| Reconciliation of operating earnings - Fourth quarter and cumulative for the Other Sector | |||||||||
| Three months ended | Year ended | ||||||||
| (in millions of dollars) | October 30, 2022 | October 31, 2021 | October 30, 2022 | October 31, 2021 | |||||
| Operating earnings | $7.3 | ($2.0 | ) | ($4.5 | ) | ($28.3 | ) | ||
| Restructuring and other costs (revenues) | 0.2 | 1.2 | (5.0 | ) | 3.7 | ||||
| Amortization of intangible assets arising from business combinations (1) | 0.8 | 0.1 | 0.9 | 0.2 | |||||
| Adjusted operating earnings | $8.3 | ($0.7 | ) | ($8.6 | ) | ($24.4 | ) | ||
| Depreciation and amortization (2) (3) | 6.5 | 4.8 | 21.5 | 20.1 | |||||
| Adjusted operating earnings before depreciation and amortization (3) | $14.8 | $4.1 | $12.9 | ($4.3 | ) | ||||
(1) Intangible assets arising from business combinations include our customer relationships, trademarks, non-compete agreements, rights of first refusal and educational book titles.
(2) Depreciation and amortization excludes the amortization of intangible assets arising from business combinations.
(3) Depreciation and amortization and Adjusted operating earnings before depreciation and amortization have been restated to conform to the presentation adopted in the current year.
| Reconciliation of net earnings attributable to shareholders of the Corporation - Fourth quarter | |||||
| Three months ended | |||||
| (in millions of dollars, except per share amounts) | October 30, 2022 | October 31, 2021 | |||
| Net earnings attributable to shareholders of the Corporation | $60.4 | $39.2 | |||
| Restructuring and other costs (revenues) | (4.6 | ) | 6.6 | ||
| Tax on restructuring and other costs | (1.3 | ) | (1.4 | ) | |
| Amortization of intangible assets arising from business combinations (1) | 18.4 | 17.1 | |||
| Tax on amortization of intangible assets arising from business combinations | (4.5 | ) | (1.8 | ) | |
| Impairment of assets | — | 0.7 | |||
| Tax on impairment of assets | — | (0.2 | ) | ||
| Adjustment on additional taxes in other jurisdictions | — | (0.3 | ) | ||
| Tax impact of an internal reorganization | — | 10.7 | |||
| Adjusted net earnings attributable to shareholders of the Corporation | $68.4 | $70.6 | |||
| Net earnings attributable to shareholders of the Corporation per share | $0.70 | $0.45 | |||
| Adjusted net earnings attributable to shareholders of the Corporation per share | $0.79 | $0.81 | |||
| Weighted average number of shares outstanding | 86.6 | 87.0 | |||
| (1) Intangible assets arising from business combinations include our customer relationships, trademarks, non-compete agreements, rights of first refusal and educational book titles. | |||||
| Reconciliation of net earnings attributable to shareholders of the Corporation - Cumulative | |||||
| Year ended | |||||
| (in millions of dollars, except per share amounts) | October 30, 2022 | October 31, 2021 | |||
| Net earnings attributable to shareholders of the Corporation | $141.2 | $130.6 | |||
| Restructuring and other costs (revenues) | (2.5 | ) | 12.7 | ||
| Tax on restructuring and other costs | (2.0 | ) | (3.7 | ) | |
| Amortization of intangible assets arising from business combinations (1) | 70.3 | 66.3 | |||
| Tax on amortization of intangible assets arising from business combinations | (17.3 | ) | (13.7 | ) | |
| Impairment of assets | — | 0.7 | |||
| Tax on impairment of assets | — | (0.2 | ) | ||
| Adjustment on additional taxes in other jurisdictions | — | 3.0 | |||
| Tax impact of an internal reorganization | — | 10.7 | |||
| Adjusted net earnings attributable to shareholders of the Corporation | $189.7 | $206.4 | |||
| Net earnings attributable to shareholders of the Corporation per share | $1.63 | $1.50 | |||
| Adjusted net earnings attributable to shareholders of the Corporation per share | $2.19 | $2.37 | |||
| Weighted average number of shares outstanding | 86.8 | 87.0 | |||
| (1) Intangible assets arising from business combinations include our customer relationships, trademarks, non-compete agreements, rights of first refusal and educational book titles. | |||||
| Reconciliation of net indebtedness | ||||||
| (in millions of dollars, except ratios) | As at October 30, 2022 | As at October 31, 2021 | ||||
| Long-term debt | $979.3 | $778.2 | ||||
| Current portion of long-term debt | 10.7 | 187.3 | ||||
| Lease liabilities | 135.0 | 137.3 | ||||
| Current portion of lease liabilities | 25.3 | 23.1 | ||||
| Cash | (45.7 | ) | (231.1 | ) | ||
| Net indebtedness | $1,104.6 | $894.8 | ||||
| Adjusted operating earnings before depreciation and amortization (last 12 months) (1) | $446.7 | $464.8 | ||||
| Net indebtedness ratio (1) | 2.47 | x | 1.93 | x | ||
| (1) Adjusted operating earnings before depreciation and amortization has been restated to conform to the presentation adopted during the year. | ||||||
Dividend
The Corporation's Board of Directors declared a quarterly dividend of $0.225 per share on Class A Subordinate Voting Shares and Class B Shares. This dividend is payable on January 23, 2023 to shareholders of record at the close of business on January 9, 2023.
Normal Course Issuer Bid
On September 29, 2021, the Corporation was authorized to repurchase, for cancellation on the open market, or subject to the approval of any securities authority by private agreements, between October 1, 2021 and September 30, 2022, or at an earlier date if the Corporation concludes or cancels the offer, up to 1,000,000 of its Class A Subordinate Voting Shares and up to 190,300 of its Class B Shares. Repurchases are made in the normal course of business at market prices through the Toronto Stock Exchange.
In that respect, during fiscal 2022, the Corporation repurchased and cancelled 400,800 of its Class A Subordinate Voting Shares at a weighted average price of $17.43 per share, for a total cash consideration of $7.0 million (no share repurchased during the fourth quarter of 2022).
On September 29, 2022, the Corporation was authorized to repurchase, for cancellation on the open market, or subject to the approval of any securities authority by private agreements, between October 3, 2022 and October 2, 2023, or at an earlier date if the Corporation concludes or cancels the offer, up to 1,000,000 of its Class A Subordinate Voting Shares and up to 191,343 of its Class B Shares. Repurchases are made in the normal course of business at market prices through the Toronto Stock Exchange. In connection with the current repurchase program, the Corporate has not repurchased any shares to date.
Additional information
Conference Call
Upon releasing its 2022 fourth quarter results, the Corporation will hold a conference call for the financial community on December 13, 2022 at 4:15 p.m. The dial-in numbers are 1-416-764-8646 or 1-888-396-8049. Media may hear the call in listen-only mode or tune in to the simultaneous audio broadcast on the Corporation’s website, which will then be archived for 30 days. For media requests or interviews, please contact Nathalie St-Jean, Senior Advisor, Corporate Communications of TC Transcontinental, at 514-954-3581.
Profile
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. For over 45 years, TC Transcontinental's mission has been to create quality products and services that allow businesses to attract, reach and retain their target customers.
Respect, teamwork, performance and innovation are the strong values held by the Corporation and its employees. TC Transcontinental's commitment to its stakeholders is to pursue its business activities in a responsible manner.
Transcontinental Inc. (TSX: TCL.A TCL.B), known as TC Transcontinental, has approximately 8,300 employees, the majority of which are based in Canada, the United States and Latin America. TC Transcontinental generated revenues of C$3.0 billion during the fiscal year ended October 30, 2022. For more information, visit TC Transcontinental's website at www.tc.tc.
Forward-looking Statements
Our public communications often contain oral or written forward-looking statements which are based on the expectations of management and inherently subject to a certain number of risks and uncertainties, known and unknown. By their very nature, forward-looking statements are derived from both general and specific assumptions. The Corporation cautions against undue reliance on such statements since actual results or events may differ materially from the expectations expressed or implied in them. Forward-looking statements may include observations concerning the Corporation's objectives, strategy, anticipated financial results and business outlook. The Corporation's future performance may also be affected by a number of factors, many of which are beyond the Corporation's will or control. These factors include, but are not limited to, the impact of digital product development and adoption on the demand for retailer-related services and printed products, the global economic environment, including inflation and recession risks and disruptions in the supply chain, the Corporation's ability to generate organic growth in highly competitive industries, the Corporation's ability to complete acquisitions and properly integrate them, the inability to maintain or improve operational efficiency and avoid disruptions that could affect its ability to meet deadlines, raw materials, transportation and consumed energy costs, availability of raw materials, the impact of a pandemic, an epidemic or an outbreak of an infectious disease on the Corporation's operations, operating results and financial position, cybersecurity and data protection, recruiting and retaining qualified personnel, the political and social environment as well as regulatory and legislative changes, in particular with regard to the environment or door-to-door distribution and use of plastic, changes in consumption habits related, in particular, to issues involving sustainable development and the use of certain products or services such as door-to-door distribution, loss of a major customer, customer consolidation, structural changes in the industries in which the Corporation operates, the safety and quality of its packaging products used in the food industry, the impact of economic cycles on product demand, data confidentiality, the protection of its intellectual property rights, bad debts from certain customers, import and export controls, exchange rate fluctuations, interest rates and availability of capital at a reasonable cost, litigation and respect of privacy, the impact of major market fluctuations on the solvency of defined benefit pension plans, taxation, including changes in tax legislation that could adversely affect profitability, disputes with tax authorities or amendments to statutory rates in force, and results of impairment tests on the value of assets. The main risks, uncertainties and factors that could influence actual results are described in the Management's Discussion and Analysis for the year ended October 30, 2022 and in the latest Annual Information Form.
Unless otherwise indicated by the Corporation, forward-looking statements do not take into account the potential impact of non-recurring or other unusual items, nor of disposals, business combinations, mergers or acquisitions which may be announced or entered into after the date of December 13, 2022. The forward-looking statements in this press release are made pursuant to the “safe harbour” provisions of applicable Canadian securities legislation. The forward-looking statements in this release are based on current expectations and information available as at December 13, 2022. Such forward-looking information may also be found in other documents filed with Canadian securities regulators or in other communications. The Corporation's management disclaims any intention or obligation to update or revise these statements unless otherwise required by the securities authorities.
For information:
| Media Nathalie St-Jean Senior Advisor, Corporate Communications TC Transcontinental Telephone: 514-954-3581 nathalie.st-jean@tc.tc www.tc.tc | Financial Community Yan Lapointe Director, Investor Relations and Treasury TC Transcontinental Telephone: 514-954-3574 yan.lapointe@tc.tc www.tc.tc |
CONSOLIDATED STATEMENTS OF EARNINGS
Years ended October 30, 2022 and October 31, 2021
(in millions of Canadian dollars, except per share data)
| October 30, | October 31, | |||||||
| 2022 | 2021(1) | |||||||
| Revenues | $ | 2,956.1 | $ | 2,643.4 | ||||
| Operating expenses | 2,509.4 | 2,178.6 | ||||||
| Restructuring and other costs (revenues) | (2.5 | ) | 12.7 | |||||
| Impairment of assets | — | 0.7 | ||||||
| Operating earnings before depreciation and amortization | 449.2 | 451.4 | ||||||
| Depreciation and amortization | 231.9 | 217.6 | ||||||
| Operating earnings | 217.3 | 233.8 | ||||||
| Net financial expenses | 40.0 | 42.3 | ||||||
| Earnings before income taxes | 177.3 | 191.5 | ||||||
| Income taxes | 36.5 | 61.0 | ||||||
| Net earnings | 140.8 | 130.5 | ||||||
| Non-controlling interests | (0.4 | ) | (0.1 | ) | ||||
| Net earnings attributable to shareholders of the Corporation | $ | 141.2 | $ | 130.6 | ||||
| Net earnings attributable to shareholders of the Corporation per share - basic and diluted | $ | 1.63 | $ | 1.50 | ||||
| Weighted average number of shares outstanding - basic and diluted (in millions) | 86.8 | 87.0 | ||||||
| (1) Certain comparative figures have been reclassified to conform to the presentation adopted in the current year. | ||||||||
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Years ended October 30, 2022 and October 31, 2021
(in millions of Canadian dollars)
| October 30, | October 31, | |||||||
| 2022 | 2021(1) | |||||||
| Net earnings | $ | 140.8 | $ | 130.5 | ||||
| Other comprehensive income (loss) | ||||||||
| Items that will be reclassified to net earnings | ||||||||
| Net change related to cash flow hedges | ||||||||
| Net change in the fair value of derivatives - Foreign exchange risk | (17.5 | ) | 5.4 | |||||
| Net change in the fair value of derivatives - Interest rate risk | 2.5 | 3.2 | ||||||
| Reclassification of the net change in the fair value of derivatives recognized in net earnings during the period | 1.0 | 11.9 | ||||||
| Related income taxes (recovery) | (3.7 | ) | 5.4 | |||||
| (10.3 | ) | 15.1 | ||||||
| Cumulative translation differences | ||||||||
| Net unrealized exchange gains (losses) on the translation of the financial statements of foreign operations | 119.2 | (93.2 | ) | |||||
| Net gains (losses) on hedge of the net investment in foreign operations | (35.3 | ) | 39.3 | |||||
| Related income taxes | 1.1 | 4.1 | ||||||
| 82.8 | (58.0 | ) | ||||||
| Items that will not be reclassified to net earnings | ||||||||
| Changes related to defined benefit plans | ||||||||
| Actuarial (losses) gains on defined benefit plans | (14.2 | ) | 21.7 | |||||
| Related income taxes (recovery) | (3.7 | ) | 5.3 | |||||
| (10.5 | ) | 16.4 | ||||||
| Other comprehensive income (loss) | 62.0 | (26.5 | ) | |||||
| Comprehensive income | $ | 202.8 | $ | 104.0 | ||||
| (1) Certain comparative figures have been reclassified to conform to the presentation adopted in the current year. | ||||||||
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
Years ended October 30, 2022 and October 31, 2021
(in millions of Canadian dollars)
| Share capital | Contributed surplus | Retained earnings | Accumulated other comprehensive income (loss) | Total | Non- controlling interests | Total equity | |||||||||||||||||||||
| Balance as at October 31, 2021 | $ | 640.0 | $ | 0.9 | $ | 1,159.5 | $ | (41.3 | ) | $ | 1,759.1 | $ | 5.2 | $ | 1,764.3 | ||||||||||||
| Net earnings | — | — | 141.2 | — | 141.2 | (0.4 | ) | 140.8 | |||||||||||||||||||
| Other comprehensive income | — | — | — | 62.0 | 62.0 | — | 62.0 | ||||||||||||||||||||
| Shareholders' contributions and | |||||||||||||||||||||||||||
| distributions to shareholders | |||||||||||||||||||||||||||
| Share redemptions | (3.4 | ) | — | (3.6 | ) | — | (7.0 | ) | — | (7.0 | ) | ||||||||||||||||
| Dividends | — | — | (78.1 | ) | — | (78.1 | ) | — | (78.1 | ) | |||||||||||||||||
| Balance as at October 30, 2022 | $ | 636.6 | $ | 0.9 | $ | 1,219.0 | $ | 20.7 | $ | 1,877.2 | $ | 4.8 | $ | 1,882.0 | |||||||||||||
| Balance as at October 25, 2020 | $ | 640.0 | $ | 0.9 | $ | 1,107.2 | $ | (14.8 | ) | $ | 1,733.3 | $ | 5.3 | $ | 1,738.6 | ||||||||||||
| Net earnings | — | — | 130.6 | — | 130.6 | (0.1 | ) | 130.5 | |||||||||||||||||||
| Other comprehensive loss | — | — | — | (26.5 | ) | (26.5 | ) | — | (26.5 | ) | |||||||||||||||||
| Shareholders' contributions and | |||||||||||||||||||||||||||
| distributions to shareholders | |||||||||||||||||||||||||||
| Dividends | — | — | (78.3 | ) | — | (78.3 | ) | — | (78.3 | ) | |||||||||||||||||
| Balance as at October 31, 2021 | $ | 640.0 | $ | 0.9 | $ | 1,159.5 | $ | (41.3 | ) | $ | 1,759.1 | $ | 5.2 | $ | 1,764.3 | ||||||||||||
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
Years ended October 30, 2022 and October 31, 2021
(in millions of Canadian dollars)
| As at | As at | |||||||
| October 30, | October 31, | |||||||
| 2022 | 2021(1) | |||||||
| Current assets | ||||||||
| Cash | $ | 45.7 | $ | 231.1 | ||||
| Accounts receivable | 575.7 | 496.1 | ||||||
| Income taxes receivable | 12.2 | 16.9 | ||||||
| Inventories | 479.3 | 357.0 | ||||||
| Prepaid expenses and other current assets | 21.8 | 24.4 | ||||||
| 1,134.7 | 1,125.5 | |||||||
| Property, plant and equipment | 756.0 | 689.7 | ||||||
| Right-of-use assets | 140.8 | 140.8 | ||||||
| Intangible assets | 519.6 | 513.0 | ||||||
| Goodwill | 1,181.7 | 1,086.6 | ||||||
| Deferred taxes | 37.5 | 18.6 | ||||||
| Other assets | 30.7 | 38.7 | ||||||
| $ | 3,801.0 | $ | 3,612.9 | |||||
| Current liabilities | ||||||||
| Accounts payable and accrued liabilities | $ | 490.6 | $ | 439.2 | ||||
| Provisions | 1.6 | 1.5 | ||||||
| Income taxes payable | 7.0 | 36.9 | ||||||
| Deferred revenues and deposits | 11.8 | 12.3 | ||||||
| Current portion of long-term debt | 10.7 | 187.3 | ||||||
| Current portion of lease liabilities | 25.3 | 23.1 | ||||||
| 547.0 | 700.3 | |||||||
| Long-term debt | 979.3 | 778.2 | ||||||
| Lease liabilities | 135.0 | 137.3 | ||||||
| Deferred taxes | 126.0 | 129.3 | ||||||
| Provisions | 0.3 | 0.6 | ||||||
| Other liabilities | 131.4 | 102.9 | ||||||
| 1,919.0 | 1,848.6 | |||||||
| Equity | ||||||||
| Share capital | 636.6 | 640.0 | ||||||
| Contributed surplus | 0.9 | 0.9 | ||||||
| Retained earnings | 1,219.0 | 1,159.5 | ||||||
| Accumulated other comprehensive loss | 20.7 | (41.3 | ) | |||||
| Attributable to shareholders of the Corporation | 1,877.2 | 1,759.1 | ||||||
| Non-controlling interests | 4.8 | 5.2 | ||||||
| 1,882.0 | 1,764.3 | |||||||
| $ | 3,801.0 | $ | 3,612.9 | |||||
| (1) Certain comparative figures have been reclassified to conform to the presentation adopted in the current year. | ||||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS
Years ended October 30, 2022 and October 31, 2021
(in millions of Canadian dollars)
| October 30, | October 31, | |||||||
| 2022 | 2021(1) | |||||||
| Operating activities | ||||||||
| Net earnings | $ | 140.8 | $ | 130.5 | ||||
| Adjustments to reconcile net earnings and cash flows from operating activities: | ||||||||
| Impairment of assets | — | 0.7 | ||||||
| Depreciation and amortization | 231.9 | 217.6 | ||||||
| Financial expenses on long-term debt and lease liabilities | 36.8 | 38.7 | ||||||
| Net (gains) losses on disposal of assets | (6.0 | ) | 0.6 | |||||
| Income taxes | 36.5 | 61.0 | ||||||
| Net foreign exchange differences and other | (4.8 | ) | 4.3 | |||||
| Cash flows generated by operating activities before changes in non-cash operating items and income taxes paid | 435.2 | 453.4 | ||||||
| Changes in non-cash operating items | (129.5 | ) | (78.7 | ) | ||||
| Income taxes paid | (84.9 | ) | (59.4 | ) | ||||
| Cash flows from operating activities | 220.8 | 315.3 | ||||||
| Investing activities | ||||||||
| Business combinations, net of acquired cash | (124.8 | ) | (43.7 | ) | ||||
| Acquisitions of property, plant and equipment | (117.1 | ) | (115.0 | ) | ||||
| Disposals of property, plant and equipment | 9.8 | 1.0 | ||||||
| Increase in intangible assets | (25.3 | ) | (23.3 | ) | ||||
| Cash flows from investing activities | (257.4 | ) | (181.0 | ) | ||||
| Financing activities | ||||||||
| Increase in long-term debt | 200.0 | 399.3 | ||||||
| Reimbursement of long-term debt | (330.6 | ) | (409.0 | ) | ||||
| Net increase in credit facilities | 127.0 | — | ||||||
| Financial expenses paid on long-term debt and credit facilities | (34.7 | ) | (35.1 | ) | ||||
| Repayment of principal on lease liabilities | (24.3 | ) | (23.7 | ) | ||||
| Interest paid on lease liabilities | (3.2 | ) | (3.3 | ) | ||||
| Dividends | (78.1 | ) | (78.3 | ) | ||||
| Share redemptions | (7.0 | ) | — | |||||
| Cash flows from financing activities | (150.9 | ) | (150.1 | ) | ||||
| Effect of exchange rate changes on cash denominated in foreign currencies | 2.1 | 5.9 | ||||||
| Net change in cash | (185.4 | ) | (9.9 | ) | ||||
| Cash at beginning of year | 231.1 | 241.0 | ||||||
| Cash at end of year | $ | 45.7 | $ | 231.1 | ||||
| Non-cash investing activities | ||||||||
| Net change in capital asset acquisitions financed by accounts payable | $ | 3.7 | $ | (0.5 | ) | |||
| (1) Certain comparative figures have been reclassified to conform to the presentation adopted in the current year. | ||||||||
