ANNUAL AND SPECIAL SHAREHOLDERS MEETING. Sheraton Hotel - Laval June 15, 2016

Transcription

1 ANNUAL AND SPECIAL SHAREHOLDERS MEETING Sheraton Hotel - Laval June 15, 2016

2 MANAGEMENT COMMITTEE JEAN PASCHINI Co-Chair of the Board of Directors and Chief Executive Officer PIERRE PASCHINI, P.Eng. President and Chief Operating Officer MARISE PASCHINI Executive Vice-President, Treasurer, Corporate Secretary JEAN-FRANÇOIS BOURSIER, CPA, CA Chief Financial Officer CAROLYN HANSON-CARBONNEAU, M.Eng. Vice-President, Engineering and Operations

3 MEETING AGENDA 1. Opening of the Meeting and Quorum 2. Adoption of the Meeting s Agenda 3. Adoption of the Minutes of the 2015 Annual Meeting of Shareholders 4. Auditor s Report and Receipt of the Consolidated Financial Statements for the Fiscal Year Ended January 31, Election of Directors 6. Appointment of the Independent Auditor 7. Resolution : Approval and Authorization of Options Not Granted Issuable Under the Stock Option Plan 8. Management s Report 9. Voting Results on the Resolution Question-and-Answer Session 11. Adjournment of the Meeting

4 MEETING AGENDA 1. Opening of the Meeting and Quorum 2. Adoption of the Meeting s Agenda 3. Adoption of the Minutes of the 2015 Annual Meeting of Shareholders 4. Auditor s Report and Receipt of the Consolidated Financial Statements for the Fiscal Year Ended January 31, Election of Directors 6. Appointment of the Independent Auditor 7. Resolution : Approval and Authorization of Options Not Granted Issuable Under the Stock Option Plan 8. Management s Report 9. Voting Results on the Resolution Question-and-Answer Session 11. Adjournment of the Meeting

5 ELECTION OF DIRECTORS Jean Paschini Chief Executive Officer ADF Group Inc. Pierre Paschini, P.Eng. President and Chief Operating Officer ADF Group Inc. Marise Paschini Executive Vice-President, Treasurer Corporate Secretary, ADF Group Inc. Marc L. Belcourt, Eng. (ret.) Construction Consultant Michèle Desjardins F.C.Adm., CMC, ICD.D Senior Partner Lansberg Gersick & Associates Frank Di Tomaso FCPA, FCA, ICD.D Corporate Director Antonio P. Meti President G.D.N.P. Consulting Services Inc. Me Robert Paré Senior Partner Fasken Martineau DuMoulin President and Founder Koby Consulting Inc.

6 MEETING AGENDA 1. Opening of the Meeting and Quorum 2. Adoption of the Meeting s Agenda 3. Adoption of the Minutes of the 2015 Annual Meeting of Shareholders 4. Auditor s Report and Receipt of the Consolidated Financial Statements for the Fiscal Year Ended January 31, Election of Directors 6. Appointment of the Independent Auditor 7. Resolution : Approval and Authorization of Options Not Granted Issuable Under the Stock Option Plan 8. Management s Report 9. Voting Results on the Resolution Question-and-Answer Session 11. Adjournment of the Meeting

7 RESOLUTION Approval and Authorization of Options Not Granted Issuable Under the Stock Option Plan THAT all options not granted that may be issued under the terms of the stock option plan of the Corporation be and are hereby approved and authorized ; THAT the Corporation can continue granting stock options under its Stock Option Plan until June 15, 2019, which is the third anniversary of the Shareholders Meeting during which shareholders approval is required ; THAT any officer or director of the Corporation be and is hereby authorized to sign any document, to enter into any agreement, to take any action or to do anything deemed necessary or desirable for and on behalf of the Corporation, in order to give full effect to this resolution, including in order to comply with all securities legislation and regulations ; and THAT the Board of Directors of the Corporation be and is hereby authorized to ensure that any measure, any agreement or any document deemed necessary or desirable to give full effect to this resolution and to allow the execution of these provisions be taken, entered into or signed.

8 MEETING AGENDA 1. Opening of the Meeting and Quorum 2. Adoption of the Meeting s Agenda 3. Adoption of the Minutes of the 2015 Annual Meeting of Shareholders 4. Auditor s Report and Receipt of the Consolidated Financial Statements for the Fiscal Year Ended January 31, Election of Directors 6. Appointment of the Independent Auditor 7. Resolution : Approval and Authorization of Options Not Granted Issuable Under the Stock Option Plan 8. Management s Report 9. Voting Results on the Resolution Question-and-Answer Session 11. Adjournment of the Meeting

9 MANAGEMENT'S REPORT 1. REVIEW OF THE 2016 FISCAL YEAR 2. Financial Review 3. Market Development 4. Outlook for Fiscal 2017

10 (In million of dollars) (In million of dollars) (In million of dollars) FINANCIAL PERFORMANCE INDEXES ARE UP REVENUES 29% Versus $20.2M $7.3M $14.0M REVERSAL OF THE NET INCOME Versus $93.0M $76.1M $98.1M GROSS MARGIN 4.7% Versus $7.7M $1.7M $(1.6)M

11 (In number of hours) (In million of dollars) (In number of employees) OPERATIONAL PERFORMANCE INDEXES ARE UP 80 $70.6M $35.8M $48.0M FABRICATION HOURS % Versus ORDER BACKLOG 47% Versus , , , , , ,000 TOTAL NUMBER OF EMPLOYEES 33% Versus

12 STOCK PERFORMANCE INVESTMENT OF $100 5-YEAR PERIOD $ $100 DRX TSX 50 $94.61 Jan Jan Jan Jan Jan Jan. 2016

13 MANAGEMENT'S REPORT 1. Review of the 2016 Fiscal Year 2. FINANCIAL REVIEW 3. Market Development 4. Outlook for Fiscal 2017 NOTICE This presentation contains forward-looking statements reflecting ADF Group Inc. s objectives and expectations, which by their very nature involve risks and uncertainties. Consequently, reality may differ from ADF s expectations. The selected financial data set out in this presentation, as well as comparative figures for the previous fiscal years, reflect the application of International Financial Reporting Standards (IFRS). All amounts are in Canadian dollars, unless otherwise indicated.

14 RESULTS SUMMARY FISCAL YEARS ENDED JANUARY 31 (In thousands of dollars and in dollars per share) 2016 $ 2015 $ Revenues Gross Margin As a % of revenues EBITDA As a % of revenues Net Income Basic and Diluted Net Income per Share 98,089 14, % 7, % 1, ,058 7, % 1, % (1,570) (0.05) Highlights Revenues: Up by $22 M or 29%. Gross Margin: Better mix of revenues and better costs absorption, in line with the increased volume of production.

15 CASH FLOW SUMMARY FISCAL YEARS ENDED JANUARY 31 (In thousands of dollars) Cash Flow From Operations Acquisition of Property, Plant and Equipment and Intangible Assets Debt Reimbursement Debt Issuance Dividend Payment Net Change in Cash and Cash Equivalents 2016 $ (1,157) (9,002) (772) 4,893 (652) (5,569) 2015 $ 1,420 (14,233) (1,857) 5,516 (650) (10,729) Highlights Acquisition of PPE: New paint shop in Terrebonne. New Credit Facility: Initial $5M tranche drawn during Fiscal Second $5M tranche drawn in February 2016.

16 $6.2M $6.0M $93.8M $91.4M $101.8M $104.0M $10.1M LONG-TERM FINANCIAL POSITION AS AT JANUARY 31 (In million of dollars) Shareholders' Equity $107.5M Total Indebtedness $15.2M $3.7M Highlights Shareholders' Equity : Reflects the investments made during the past fiscal years, net of external financing.

17 $19.5M $8.7M $42.6M $35.0M $29.6M $24.5M $27.1M $19.5M SHORT-TERM FINANCIAL POSITION AS AT JANUARY 31 (In million of dollars) Working Capital Available Liquidities $21.0M $2.4M Highlights Working Capital: Liquidities: 2:1 Ratio. Down However adequate financing capacity to support operations.

18 RESULTS SUMMARY FIRST QUARTERS ENDED APRIL 30 (In thousand of dollars and in dollars per share) 2016 $ 2015 $ Revenues Gross Margin As a % of revenues EBITDA As a % of revenues Net Income Basic and Diluted Net Income per Share 25,440 6, % 3, % ,682 3, % 1, % Highlights Revenues: Gross Margin: Slightly down Offset by a higher margin. 20% When excluding certain non-recurrent adjustments.

19 SUMMARY OF CASH FLOW FIRST QUARTERS ENDED APRIL 30 (In thousand of dollars) Cash Flow From Operations 2016 $ (1,777) 2015 $ (1,611) Acquisition of Property, Plant and Equipment and Intangible Assets (4,294) (1,710) Debt Issuance 5,000 Debt Reimbursement (207) (187) Net Change in Cash and Cash Equivalents (1,574) (4,238) Highlights CAPEX: $4.3M Completion of the construction of the paint shop in Terrebonne. Debt: Second $5M tranche of the loan contracted in Fiscal 2016.

20 $19.5M $42.6M $35.0M $29.6M $21.0M $8.7M $24.5M $27.1M $19.5M SHORT-TERM FINANCIAL POSITION AS AT APRIL 30, 2016 (In million of dollars) Working Capital Available Liquidities At January 31 At January 31 $24.4M $2.4M $0.8M Q Q Highlights Working Capital: Liquidities: Up 2.5 :1 Ratio. Down Several projects starting ; adding a certain pressure on liquidities.

21 FINANCIAL OBJECTIVES FOR FISCAL 2017 PRIORITIES Generating liquidities Now that our strategic investments are finalized, we must yield the benefits thereof. Maintaining the order backlog at a high level Reaching $78.4M as at April 30, 2016 Up compared with January 31, Pursuing the integration of our new operations Facilities in Great Falls and the new paint shop in Terrebonne. CAPEX Program Moderate Mainly to maintain our assets current. Maintaining the Dividend Policy $0.02 per year.

22 MANAGEMENT'S REPORT 1. Review of the 2016 Fiscal Year 2. Financial Review 3. MARKET DEVELOPMENT 4. Outlook for Fiscal 2017

23 MARKET DEVELOPMENT FIRM ORDERS FISCAL 2016 $100M 1 st QUARTER FISCAL 2017 $44M

24 MARKET DEVELOPMENT MAJOR PROJECTS COMPLETED AND UNDERWAY Toronto New Jersey New York

25 MARKET DEVELOPMENT MAJOR PROJECTS COMPLETED AND UNDERWAY Minnesota RFK Bridge New York New Jersey

26 MARKET DEVELOPMENT MAJOR PROJECTS COMPLETED AND UNDERWAY Atlanta Florida Montreal Florida

27 MANAGEMENT'S REPORT 1. Review of the 2016 Fiscal Year 2. Financial Review 3. Market Development 4. OUTLOOK FOR FISCAL 2017

28 NEW BUSINESS PLAN NEW CORPORATE MISSION STATEMENT TO FORGE INNOVATIVE AND CUSTOMIZED SOLUTIONS WITH OUR CLIENTS Bringing together our past, our strengths and our raison d être

29 NEW BUSINESS PLAN OUR FIVE MAIN PILLARS FABRICATION PLANT TERREBONNE 58,530 square meters ( ft 2 ) Well-oiled plant with a well thoughout layout Plant characterized by flexibility and versatility Extensive expertise in an array of steel structure projects Over 340 production and administrative employees, engineers, technicians, managers and executives

30 NEW BUSINESS PLAN OUR FIVE MAIN PILLARS FABRICATION PLANT GREAT FALLS Advantageously situated (Western Canada and US Markets) 100-acre property (4,4 million ft 2 ) Plant of 9,290 square meters (100,000 ft 2 ) Sufficient room to grow Tangible results from the continuous training program Significant gains in productivity and level of experience

31 NEW BUSINESS PLAN OUR FIVE MAIN PILLARS PAINT SHOP - TERREBONNE 3,900 square meters (42,000 ft 2 ) Built at a cost of over $7 million and as per the latest and highest environment requirements (certificates) Seasoned management team (with over 35 years experience) Broader range of products and services 75% of the paint shop capacity sold for Fiscal 2017

32 NEW BUSINESS PLAN OUR FIVE MAIN PILLARS PAINT SHOP GREAT FALLS Cutting-edge 4,460 square meters (48,000 ft 2 ) facility Built as a cost of $10 million Successful start-up ; major projects for blue-chip clients Providing a one-stop solution for steel structure fabrication projects with coating requirements Flexibility and available capacity to serve external clients

33 NEW BUSINESS PLAN OUR FIVE MAIN PILLARS CONSTRUCTION/INSTALLATION DIVISION Same experience team ; more elaborated structure Specializing in offering installation services Steel structure projects and other related products Focusing on the US East Coast, where ADF has a long-standing presence Seizing new opportunities ; same markets

34 Foundation 2 nd Generation at the Helm of the Company 2013 New Fabrication Plant and New Paint Shop in Great Falls, Montana New Paint Shop in Terrebonne New Facilities in Terrebonne First Expansion to the United States 1999 Initial Public Offering (TSX: DRX) 2001 Expansion and Upgrading of the Plant in Terrebonne Consolidation of ADF s Canadian Operations

35 MEETING AGENDA 1. Opening of the Meeting and Quorum 2. Adoption of the Meeting s Agenda 3. Adoption of the Minutes of the 2015 Annual Meeting of Shareholders 4. Auditor s Report and Receipt of the Consolidated Financial Statements for the Fiscal Year Ended January 31, Election of Directors 6. Appointment of the Independent Auditor 7. Resolution : Approval and Authorization of Options Not Granted Issuable Under the Stock Option Plan 8. Management s Report 9. Voting Results on the Resolution Question-and-Answer Session 11. Adjournment of the Meeting

36 VOTING RESULTS Approval and Authorization of Options Not Granted Issuable Under the Stock Option Plan IT IS HEREBY THAT all options not granted that may be issued under the terms of the stock option plan of the Corporation be and are hereby approved and authorized ; THAT the Corporation can continue granting stock options under its Stock Option Plan until June 15, 2019, which is the third anniversary of the Shareholders Meeting during which shareholders approval is required ; THAT any officer or director of the Corporation be and is hereby authorized to sign any document, to enter into any agreement, to take any action or to do anything deemed necessary or desirable for and on behalf of the Corporation, in order to give full effect to this resolution, including in order to comply with all securities legislation and regulations ; and THAT the Board of Directors of the Corporation be and is hereby authorized to ensure that any measure, any agreement or any document deemed necessary or desirable to give full effect to this resolution and to allow the execution of these provisions be taken, entered into or signed.

37 MEETING AGENDA 1. Opening of the Meeting and Quorum 2. Adoption of the Meeting s Agenda 3. Adoption of the Minutes of the 2015 Annual Meeting of Shareholders 4. Auditor s Report and Receipt of the Consolidated Financial Statements for the Fiscal Year Ended January 31, Election of Directors 6. Appointment of the Independent Auditor 7. Resolution : Approval and Authorization of Options Not Granted Issuable Under the Stock Option Plan 8. Management s Report 9. Voting Results on the Resolution Question-and-Answer Session 11. Adjournment of the Meeting

38 THE STORY CONTINUES