The CEO of Transcontinental Inc., FranÃ§ois Olivier, retired on Friday after transforming the country’s largest printer into a leading global packaging company in his 13 years at the helm.
The Montreal-based company announced better-than-expected financial results on Thursday evening, and also welcomed Peter Brues as new CEO. Mr. Brues, 53, became director of Transcontinental three years ago after spending more than 20 years with Amcor, a Swiss-based packaging company. Transcontinental announced its succession plan in September.
Mr. Olivier “leaves behind a much better positioned company,” Bank of Nova Scotia analyst Mark Neville said in a report. “We do not expect a significant change in strategy, as Mr. Brues has been on the board since 2018.”
Transcontinental dominates the national printing of newspapers, magazines and flyers. Its customers include major retailers and The Globe and Mail. Entrepreneur RÃ©mi Marcoux founded the company in 1976 by buying a small printing house after an internship at Quebecor Inc. Transcontinental is still controlled by Mr. Marcoux and his family. It has a market capitalization of $ 1.7 billion.
Mr. Olivier, 56, spent the first part of his 28-year career with the company managing print operations. He was appointed CEO in 2008. âMost of our industries faced headwinds 10 years ago,â he said on a conference call Thursday.
âA lot has changed since then. We are a very different and diverse company. The majority of our revenue comes from businesses with good prospects.
When Mr. Olivier became CEO, the advertising printing industry was in decline. Shortly after taking office, Transcontinental invested in new presses. The company has successfully consolidated the domestic industry and now continues to report an EBITDA (earnings before interest, taxes, depreciation and amortization) margin of 24 percent from printing.
In 2014, Mr. Olivier launched an international expansion in the packaging industry, targeting customers in industries such as medicine, food, beverage and pet food. Transcontinental acquired nine packaging companies in seven years, including a takeover of Chicago-based Coveris Americas in 2018, for $ 1.7 billion.
The shopping spree included a number of US facilities that make products from recycled plastic. Transcontinental recently committed to ensuring the sustainability of all of its packaging products by 2025, in line with the Ellen MacArthur Foundation’s vision of a circular economy for plastics, where the material never becomes waste.
Packaging only represented 2% of Transcontinental’s revenues in 2014. In the past year, it represented 55% of the company’s sales. Mr. Olivier also oversaw the expansion of Transcontinental’s customer base. When he became CEO, overseas customers only accounted for 15% of sales. Upon retirement, Transcontinental derives 65 percent of its revenues from its international operations in the United States, Mexico, China and Great Britain.
“Transcontinental has grown from a Canadian company to an international organization more resilient than ever, whether in the face of economic shocks or technological change,” Olivier said on Thursday’s conference call. The company has 8,000 employees at 39 facilities in eight countries.
Transcontinental President Isabelle Marcoux said in a statement that âMr. Olivier’s innovative vision, decisive leadership and business skills have helped propel Transcontinental to its position as a leader in flexible packaging in North America. and largest printer in Canada â.
Mr. Brues, a former KPMG partner, is now taking over a company that has halved its debt over the past five years, to $ 895 million at the end of the last quarter.
As the economy continues to recover from closures caused by a pandemic, Transcontinental is well positioned for growth, RBC Capital Markets analyst Drew McReynolds said in a report on Friday.
“We believe that Transcontinental has significant financial flexibility to implement organic growth initiatives, complementary acquisitions and possibly a more robust return on capital program of dividend growth and share buybacks,” wrote Mr. McReynolds.
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