Transcontinental : Q1-2024 Earnings Call Presentation

Q1-FY2024 RESULTS

EARNINGS CALL PRESENTATION

Thomas Morin, President and Chief Executive Officer

Donald LeCavalier, Executive Vice President & Chief Financial Officer Yan Lapointe, Director, Investor Relations & Treasury

March 13, 2024

NOTE TO READERS

In this document, unless otherwise indicated, all financial data are prepared in accordance with International Financial Reporting Standards (IFRS) and the term ''dollars'' as well as the symbol ''$'' designate Canadian dollars. In this document, we also use 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 at the end of this presentation and in Note 3 "Segmented Information" to the unaudited condensed interim consolidated financial statements for the first quarter ended January 28, 2024. 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.

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 EBITDA)
Adjusted net earnings attributable to	Net earnings attributable to shareholders of the Corporation before restructuring and other costs (revenues), amortization of intangible
shareholders of the Corporation per share	assets arising from business combinations and impairment of assets, net of related income taxes divided by the weighted average
(Adjusted EPS)	number of shares outstanding.

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.

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FORWARD-LOOKING INFORMATION

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 as well as regulations or legislation regarding door-to-door distribution on the printing and distribution of paper flyers, inflation and recession risks, economic conditions and geopolitical uncertainty, environmental risks as well as adoption of new regulations or amendments and changes to consumption habits, the risk of an operational disruption that could be harmful to its ability to meet deadlines, the worldwide outbreak of a disease, a virus or any other contagious disease could have an adverse impact on the Corporation's operations, the ability to generate organic long-term growth and face competition, a significant increase in the cost of raw materials, the availability of those materials and energy consumption could have an adverse impact on the Corporation's activities, the ability to complete acquisitions and properly integrate them, cybersecurity, data protection, warehousing and usage, the impact of digital product development and adoption on the demand for printed products other than flyers, the failure of patents, trademarks and confidentiality agreements to protect intellectual property, a difficulty to attract and retain employees in the main operating sectors, the safety and quality of packaging products used in the food industry, bad debts from certain customers, import and export controls, duties, tariffs or taxes, exchange rate fluctuations, increase in market interest rates with respect to our financial instruments as well as availability of capital at a reasonable cost, the legal risks related to its activities and the compliance of its activities with applicable regulations, the impact of major market fluctuations on the solvency of defined benefit pensions plans, changes in tax legislation and disputes with tax authorities or amendments to statutory tax rates in force, the impact of impairment tests on the value of assets and a conflict of interest between the controlling shareholder and other shareholders. 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 29, 2023 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 March 12, 2024. The forward-looking statements in this presentation are made pursuant to the "safe harbour" provisions of applicable Canadian securities legislation. The forward-looking statements in this presentation are based on current expectations and information available as at March 12, 2024. 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.

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Q1-FY2024 HIGHLIGHTS

Solid first quarter with consolidated adj. EBITDA(1) growth of 14.3%, including a 29.6% profit growth in the Packaging Sector

Significant impact from cost reduction initiatives across the organization more than offset volume pressures

Cash flow from operating activities of $57.4 millions compared to $12.0 millions in Q1 FY2023

Net indebtedness ratio(1) of 2.00x

Solid Q1 FY2024 results despite softer market demand

4 |	(1) Non-IFRS financial measure. Please refer to page 2 of this presentation for a complete description of these measures.

Q1-FY2024FINANCIAL RESULTS

		Q1-FY2024	Q1-FY2023	Highlights
				3.8% decline due to lower volume, mainly in the Printing
	Revenues	$680.4M	$707.0M
	Sector
				14.3% improvement from cost reduction initiatives,
	Adj. EBITDA(1)	$96.1M	$84.1M
	partially offset by lower volume
				79.2% increase from higher adjusted EBITDA, lower
	Adj. EPS(1)	$0.43	$0.24
	depreciation and lower financial expenses, partially offset
				by higher taxes
				Strong cash flow from operating activities from last four
	Net debt ratio(1)	2.00x	2.63x	quarters leading to a $245.3M net debt reduction since
	Q1-FY2023
				$12M adj. EBITDA improvement in Q1-FY2024
5 |			(1) Non-IFRS financial measure. Please refer to page 2 of this presentation for a complete description of these measures.

Q1-2024FINANCIAL RESULTS: PACKAGING

Revenues ($M)

 1.8% decrease mainly due to lower volume, especially in the industrial and medical markets due to the economic conditions

 Partially offset by favourable variation in exchange rates

Adj. EBITDA(1) ($M)

 29.6% adj. EBITDA(1) growth from cost reduction and efficiency improvement initiatives and a more favourable product mix

 Adj. EBITDA margin improved 370 bps to 15.2%

6 |	(1) Non-IFRS financial measure. Please refer to page 2 of this presentation for a complete description of these measures.

Q1-2024FINANCIAL RESULTS: PRINTING

Revenues ($M)

 7.4% decrease mainly due to lower volume mainly in magazine and book printing activities

 Strong performance from in-store marketing (ISM) activities

Adj. EBITDA(1) ($M)

 Significant cost reductions offsetting lower volume

 Year-over-year 70 bps margin improvement, including a positive impact of raddarTM

7 |	(1) Non-IFRS financial measure. Please refer to page 2 of this presentation for a complete description of these measures.

FY2024 OUTLOOK

Packaging

Printing

Consolidated

Growth in adjusted EBITDA(1) in FY2024 versus FY2023 from cost reductions initiatives and increased efficiency

Lower volumes in traditional activities, mostly offset by cost reduction initiatives and expansion of raddarTM

Adjusted EBITDA(1) at the very least at FY2023 level considering a challenging economic environment and the early impact of our profitability improvement program

Delivered a first quarter ahead of expectations despite a challenging economic

environment, putting us in a good position for a recovery in demand

8 |	(1) Non-IFRS financial measure. Please refer to page 2 of this presentation for a complete description of these measures.

APPENDIX

www.tc.tc

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RECONCILIATION OF NON-IFRSFINANCIAL MEASURES

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