Q3 2023 Cascades Inc Earnings Call
Speaker 1: Madam Monsieur, brienne vous à la téléconference des résultants financés de 3 imprimestes, 2,000,000 crores de Cascades. Je m'appelle Sylvie.
Mackenzie I missed you gave new electrical pellicle fit all day or is it tough you know feeds it wasn't pretty must do meal went wider cast Scott <unk> is used so riva copay at Cisco salty, but you know I think it took the link adequate Selma.
Speaker 1: and unite all the links through which discuss? just as well. Radization
Smith will come all piled they'd see Russia, Italy or Hunter you had the question.
Good morning, My name is Sylvie and I will be your conference operator today at this time I would like to welcome everyone to the <unk> third quarter 2023 financial results Conference call note that all lines are currently in a listen only mode. After the Speakers' remarks, there will be a question and answer session I will now pass the call over to Jennifer.
Speaker 1: At this time, I would like to welcome everyone to the Cascad third quarter, 2023 Financial Results Conference call. Note that all lines are currently in a listen-only mode. Half.
Speaker 1: I will now pass the call over to Jennifer Aitken, Director of Investor Relations for Cascad. Miss Aitken, you may begin the call.
Director of Investor Relations forecast Scott Ms. Aitken you may begin the conference.
Thank you Susie good morning, everyone and thank you for joining our third quarter 2023 conference call. It.
Speaker 2: Thank you, Sylvie. Good morning, everyone, and thank you for joining our third quarter 2023 conference call. We will begin with an overview of our operational and financial results followed by some concluding remarks after which we will begin the question period.
We will begin with an overview of our operational and financial results followed by some concluding remarks after which they will begin the question period.
Speaker 2: Today's speakers will be Mario Puehlt, President and CEO and Alan Hogg, CFP.
Today's speakers will be Matt Hill, <unk>, President and CEO and Allan Hogg CFO.
Speaker 2: Also joining us for the question period at the end of the call are Charles Malo, President and CEO of Containerboard Packeting. Jerome Parvier, President and CEO of Specialty Products. Jean David Tardif, President and CEO of T-Shopepers and Duke Langevin, Senior VP of Corporate Services.
Also joining us for the question period at the end of the call our shelf Melo, President and CMO of containerboard packaging, Joe <unk>, President and CMO of specialty products, John that John Duffey.
President and CFO of tissue papers, and senior VP of corporate services before.
Speaker 2: Before I turn the call over to my colleagues, I would like to highlight that certain statements made during this call will discuss historical and forward-looking matter. The accuracy of these statements is subject to risk factors that can have a material impact on actual results. These risks are listed in our public file.
Before I turn the call over to my colleagues I would like to highlight that certain statements made during this call will discuss historical and forward looking matters. The accuracy of these statements are subject to risk factors that can have a material impact on actual results. These risks are listed in our public filings.
Speaker 2: These statements, the investor presentation and the press release also include data that are not measures of performance under ISR.
These statements the Investor presentation and the press release also include data that are not measures of performance under I S. R. S. Please refer to our Q3 2023 investor presentation for details. This presentation, along with our third quarter press release can be found in the investors section of our website. If you have any questions.
Speaker 2: Please refer to our Q3 2020-3 Investor presentation.
Speaker 2: This presentation, along with our third quarter press release, can be found in the Investor section of our web.
Speaker 2: If you have any questions, please feel free to contact us after the session. I will now turn the call over to our CEO , Matthew. Thank you, Jim.
Please feel free to contact us after the session I will now turn the call over to our CEO Flavio.
Thank you Jennifer and good morning, everyone.
Speaker 3: Before discussing our result, that we'd like to announce that we have some sad news this morning, Mr. Bernalema, founders of our company died yesterday. Even though Bernal has retired from cascades over years ago, he remained the heart and the soul of the company and never ceased to inspire us.
Before discussing our results I would like to announce that we have some sad news this morning Mr.
Mr. <unk> founders of our company guidance yesterday.
Even though they're not as regards from guests got several years ago. He remain the heart and the soul of the company and never cease to inspired us guests get will be more need for this great man and will celebrate his memory an exceptional achievement.
Speaker 3: Cascad will be mourning for this great man and will celebrate his memory and exceptional achievement. On behalf of all Cascad and Bloy, I would like to offer our most sincere condolences to the family and Bernau loves one.
On behalf of our guests get employee I would like to offer our most sincere condolences to discern the mere family.
Our loved ones.
Speaker 3: Beginning with the calls, we are pleased with our strong Q3 consolidated result and in particular the record quarterly performance of our tissue paper segment.
Beginning with the calls we are pleased with our strong Q3 consolidated result.
And in particular, the record quarterly performance of our tissue paper segments on a consolidated basis sales increased 2% year over year, while adjusted EBITDA of 161 million rose, 45% from the prior year.
Speaker 3: On a constant basis, sales increased 2% U over year while adjusted in the duck of 161 million rolls, 45% from the prior year.
Speaker 3: In both cases, strong results in the tissue paper segment were the main driver as benefits from our strategic action deal result.
Both cases strong result in the tissue paper segment were the main driver as benefits from our strategic actions yield result.
Speaker 3: More broadly, you were your top line growth benefited from strong volume and tenorboards which include their island and a favorable foreign exchange for all of our business segments.
More broadly year over year top line growth benefited from strong volume in containerboard, which include Bear Island.
Favorable foreign exchange for all of our business segment.
Speaker 3: While our packaging businesses saw lower average selling prices following the index decrease, the impact at that consolidated level was partially offset by higher selling price in Pichu.
While our packaging business has a lower average selling prices following the index decrease the impact at the consolidated level was partially offset by selling price in tissue.
Speaker 3: The overyear that the improved was also driven by stronger tissue results and lower raw material prices for all segments. Freight and energy costs were lower, but benefits were largely upset by higher production costs.
Year over year EBITDA improve was also driven by stronger tissue result, and lower raw material prices for all segments freight and energy costs were lower but benefits were largely offset by higher production costs.
Sequentially sales increased two 6% this was driven by higher volume in containerboard and a more favorable mix in tissue paper selling prices were lower for both our containerboard and tissue paper segment.
Speaker 3: Sequentially sales increased 2.6%. This was driven by higher volume and content aboard, and a more favorable mix in tissue paper. Selling prices were lower for both our content aboard and tissue paper segments.
Speaker 3: A bit the increase, 14% sequentially. This was driven by improved volume and container board and tissue paper and lower overall production costs. Rometary prices were headwinds for our packaging businesses, but were tailwinds for our tissue operation.
EBITDA increased 14% sequentially. This was driven by improved volume in containerboard and tissue paper and lower overall production costs.
Raw material prices were headwinds for our packaging businesses, but we're tail wins for our tissue operation.
Although raw materials side highlighted on slides five and six the Q3 average index price for OCC decrease of 46% year over year.
Speaker 3: On the raw material side, I lighten on slide 5.6, the Q3 average index price for OCC decrease 46% year-over-year. But increased 26% from Q2.
<unk> increased 26% from Q2.
Speaker 3: The OCC market saw a more active export market in Q3, with increased volume to Asia leading to some pressure on pricing.
The OTC market saw a more active export market in Q3, we had increased volume to Asia, leading to some pressure on pricing.
Speaker 3: Seasonal fiber generation remains good, albeit at a slower pace than recent years. We have had no problems supplying the needs of our operation, which have increased with the ramp-up of Bear Island.
No fiber generation remained goods, albeit at a slower pace than in recent years, we have had no problems supplying the needs of our operation, which adds increased with the ramp up of Bear Island.
Speaker 3: Habits Q3 index prices for white recycle paper grades decreased 22% sequentially and 42% from the prior year levels. We saw favorable market dynamics over Q3 with the index prices continuing to reduce but at the slower pace than previous quarter. Similar trend was seen
Average Q3 index prices for white recycled paper grades decreased 22% sequentially and 42% from the prior year levels, we saw favorable market dynamics over Q3, with the index prices continuing to reduce but at a slower pace than previous quarter.
Similar trend, we're seeing with the Virgin Paul.
Speaker 3: The hardwood pulp index decreased 20% sequentially and 37% year-over-year while softwood pulp index prices decreased 14% from Q2 and 28% year-over-year. Market condition has begun to reverse following more demand from China and a scheduled downtime and closure announced at multiple mills in North America.
The hardwood pulp index decreased 20% sequentially and 37% year over year, while softwood pulp index prices decreased 14% from Q2 and 28% year over year.
Market condition has begun to reverse following more demand from China, and a scheduled downtime and cruiser announced at multiple meals in North America.
Speaker 3: Notwithstanding these changes in the market condition, the material has been readily available for our mills.
Notwithstanding these changes in the market condition the material has been readily available for our mills.
Speaker 3: Near-term market dynamics will be influenced by whether or not the Asian market continues supporting both export activity and pricing.
Near term market dynamics will be influenced by whether or not Asian market continues reporting both export activity and pricing.
Moving now to the results of each of our business segment as highlighted on page seven through 12 of the presentation.
Speaker 3: Moving now to the results of each of our business segments as highlighted on page 7 through 12 of the presentation.
Speaker 3: Beginning with container board sequentially sales increased 6% into 3. This reflects higher volume due to usual seasonality and the addition of the volume from Bear Island.
Beginning with containerboard sequentially sales increased 6% in Q3.
This reflects higher volume due to usual seasonality and the addition of the volume from Bear Island.
These were partially offset by the impact from lower average selling prices related to the index changes and a less favorable sales mix given the greater weighting of the parent rolls.
Speaker 3: These were partially upset by the impact from lower average selling prices related to the index changes and the less favorable sales mix given the greater weighting of the parent role.
The 8% increase in shipments reflect the reflects increases of 12% in parent rolls and 4% in converted product.
Speaker 3: The 8% increase in shipment reflects increases of 12% in parent rolls and 4% in converted products.
Speaker 3: Sequentially, converting shipment increased 4.3% in Canada, outperforming the 0.4% increase in the Canadian market. U.S. converting shipment increased 1% above the 0.4% U.S. market increase.
Sequentially converting shipment increased four 3% in Canada outperforming the 4% increase in the Canadian market U S. Converting shipment increased 1% above the 0.4% U S market increase.
Speaker 3: Q3 at just a bit of 101 million or 17% on a margin basis was 5% above the Q2 levels reflected higher volume and lower operating cost.
Q3, adjusted EBITDA of $101 million or 17% on a margin basis was 5% above the Q2 levels reflected higher volume and lower operating costs.
Speaker 3: These were partially have said by lower selling prices and are your raw material and transportation costs. The contribution of Bear Island improves sequentially but is still a negative contributor to our performance giving the mill is ramping up.
These were partially offset by lower selling prices and higher raw material and transportation costs.
Contribution of Bear island, they improved sequentially, but is still a negative contributor to our performance, giving the mill is ramping up.
Speaker 3: Year-over-year sales in EBITDA both decreased by $2 million, with the impact of lower selling prices largely offset by higher volumes at the top line, while tailwinds at the EBITDA level also include lower raw materials, energy, and transportation costs.
Year over year sales and EBITDA, both decreased by $2 million with the impact of lower selling prices largely offset by higher volumes at the top line.
Tailwind at the EBITDA level also include lower raw materials energy and transportation costs.
Speaker 3: You are of a year's shipment increased by 10% into 3, reflecting a 14% increase in the external parent role shipment, largely related to the new barrage and volume, and a 6% increase in converting shipment.
Year over year shipment increased by 10% in Q3, reflecting a 14% increase.
External parent roll shipment largely related to the new mayor added volume.
And a 6% increase in converting shipment.
Speaker 3: Specifically, converting shipments increased by 5.7% in Canada year-over-year, outperforming the 0.8% increase in the Canadian market. U.S. converting shipments increased 9.5%, once again significantly outperforming the 4% of the U.S. market decrease.
Specifically converting shipment increased by five 7% in Canada year over year outperforming the 8% increase in the Canadian market.
U S converting shipment increased nine 5% once again significantly outperforming the 4% of the U S market decrease.
Speaker 3: Continuing with our packaging business, Q3 sales and levels in our specialty product segment decreased by 4% sequentially following lower volume in molded pulp and cardboard products.
Continuing with our packaging business Q3 sales levels in our specialty products segment decreased by 4% sequentially.
Lower volume in molded pulp and cardboard product.
Speaker 3: production challenge in our molded pulp activity during the quarter are now resolved and volume are expected to be back to normalized level in Q4.
<unk> challenge in our molded pulp activity during the quarter are now resolved and volume are expected to be back to normalized level in Q4.
EBITDA decreased by $3 million sequentially, driven by lower realized spread in some sub segments, mainly due to product mix and lower volume.
When compared to the prior year Q3 sales decreased by $11 million or 7%.
Given by softer volume, primarily in cardboard and lower selling prices in almost all sub segments.
These were partially mitigated by a more favorable exchange rate.
EBITDA level decreased by 4 million year over year to 21 million in Q3 as benefit from <unk> realized spread were more than offset by the impact from lower volume and higher production costs.
Moving now to our tissue business, which generated a solid quarterly EBITDA margin of 14, 5%. This strong performance reflects benefits from favorable raw material pricing in recent wide ranging commercials operational and strategic initiatives that include the repositioning of this segment.
Operational platform.
This repositioning include closure of several facilities all of which has now been completed the decommissioning process is underway and on schedule.
With limited impact on our customer thanks to good planning by our team and production being shifted to other clients.
Moving now to resolve.
Sales were stable sequentially, increasing 1%, which reflects 5% growth in converting side. This was partially offset by lower parent roll sales following the closure of ours to slip it in.
Our ego mill and IR integration within our own network.
The average selling price increased by 1% driven by the lower proportion of parent rolls in the sales mix.
Of this partially offset by a lower average selling price in converted products that reflects a less favorable mix and lower prices with some key customer due to contracted pricing model agreement.
And at least 50% of our retail volume or lead to such agreements.
Shipments were stable in Q2, reflecting a 5% increase in converted product and a 24% decrease in parent roll following the closure of the St and then Nick.
Q3, EBITDA of $61 million of 14 play five on a margin basis improved 17 million or 39% from Q2.
This increase was driven by benefits from lower raw material and freight.
And a decrease in fixed cost levels following the plant closure.
These were partially offset by lower selling prices for the converted product and higher energy costs year over year sales rose, 10% with pricing and sales mix initiative animal more favorable exchange rates contributing to the stronger performance.
EBITDA increased $57 million from the prior year period. This was driven by higher selling prices favorable sales mix and lower raw material and energy costs.
Alan will now discuss the main highlights of our financial performance. Thank.
Thank you Mario and good morning, everyone. So on slide 13, and 14, we illustrate the specific items recorded during the quarter. The items that affected EBITDA were $12 million of impairment charges on U S assets restructuring costs related to closure of clients in the U S.
Slide 15, and 16 illustrate the year over year and sequential volumes of our Q3 adjusted earnings per share and then re constellation with the specific items that affected our quarterly results.
As reported Q3 net earnings per share were <unk> 34 cents this compared to a net loss per share of <unk> <unk> last year and net earnings per share from two cents in Q2 of this year.
On an adjusted basis net earnings per share were <unk> 44 cents in the current quarter compared to net earnings per share of <unk> 20 in last year's results and that's earnings per share of <unk> 27 in Q2.
Year over year as volumes, mainly reflects improved adjusted EBITDA, partially offset by higher financing expenses why sequential volumes also reflects a positive adjustment of income tax from prior years.
As highlighted on slide 17 third quarter adjusted cash flow farm operations increased by $53 million year over year to $115 million and adjusted cash flow.
<unk>.
Levels improved by $96 million year over year. This was driven by higher operating results and lower net capex paid in the third quarter of 2023.
Slide 18 provides detail about our capital investments new investments this year totaled 229 million and capital expenditures net of disposal and accounts payable variation totaled $297 million in the first nine months of 2023, including $56 million in Q3.
For 2023, our planned capital investment of $225 million have not changed.
Moving now to our net debt reconciliation as detailed on slide 19, our net debt increased by $12 million in the third quarter, despite stronger cash flow lower capex and positive working capital volumes exchange rates increased net debt by $47 million during the quarter.
Our leverage ratio of three eight times is down from $4. One at the end of Q2 and four six times at the end of Q1.
As we have mentioned in the past it includes the impact of the recent investment and ramp up of operations of their balance facility.
Financial ratios and information about maturities are detailed on slide 20, and our information in their houses can be found on slides 23 through 2009 of the deck Mario.
Mario will now conclude the call with some brief comments on our near term outlook before we begin the question period.
Thank you Alan.
We provide details regarding our near term outlook on slide 21 of the presentation. As a reminder, this outlook is based on current forecast and expectation and need change.
Our nuclear Mark Lu for containerboard is for results to be softer sequentially. This reflects our year raw material costs and lower selling prices both of which are linked to indexes. As you know we also expect volume to decrease in Q4 due to the usual seasonal downswing in the period in our slides.
<unk> of demand due to the economy uncertainties.
We expect to take approximately 47000 tons of downtime in the fourth quarter for maintenance and inventory management, which is similar to what we do in Q <unk> Q4 last year.
Year over year performance is expected to be lower due to the impact from cost inflation lower selling prices. Following index price decrease and all your raw material costs more broadly result will benefit from ongoing ramp up of the bear Island. We are very pleased with the progress which is.
On schedule and our team is focused on ramping up production of lightweight grades.
Results in the specialty product segment are expected to be stable sequentially year over year. This reflect usual seasonal volume stable selling prices trend in raw material costs and capacity and efficiency improvements in several sub segment.
Our outlook for tissue is for fourth quarter results to be stable sequentially, reflecting more favorable raw material and energy costs.
From profitability productivity and net working optimization initiative and stable volume.
These will be offset by slightly lower pricing connected to contracted input cost adjustment with customer resolve are forecast to be significantly above the prior year levels driven by the same factor.
Given the very strong result generated bara our tissue in Q3. Some of you may be questioning whether our 24 EBITDA target for this business of between 100 and 140 million is to do it.
It is a fair question given that Annualizing. Our Q3 result would bring us well above this range. Let me address the question by saying that we are pleased that the wide ranging actions put in place as positioning us to be tracking above the high end of this range notwithstanding this and the fact that we are.
Confident about the future performance of this business, we remain prudent given some pricing pressure and the market. Following the recent drop in raw material costs.
With that we can open the call for questions operator.
Yeah.
Ms <unk>.
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Chile with I guess your comp was a little <unk>.
Thank you.
We'd like to ask a question simply press. The Star then number one on your telephone keypad and if you would like to withdraw your question. Please press star followed by two.
Yes.
Again, if you have a question. Please press Star then one on your telephone keypad.
And your first question will be from Sean Stewart at TD Securities. Please go ahead.
Thank you and good morning, everyone.
Two questions.
I'd like to start with containerboard market.
Getting mixed messaging from a few sources <unk> showing.
Prices flat in October the Bloomberg survey reference prices declining 20% to $30 a ton.
Across craft and recycle grades.
It's choppy box data of late can you comment on what Youre seeing in terms of price pressure in the containerboard market right now.
So.
Thank you Sean for the question.
I'm not going to comment on the overall market I can talk about.
What we're seeing so.
We are still.
Progressing on the developing business for for our business and Thats really related to.
Two the investment that we made in both of our Piscataway facility also in Ontario major investments. So that's the sourcing our growth.
And also with the addition of our mill.
In there so as we see right now.
The pricing is followed.
Index of where that follow the on the market.
But we're still working with our customers to make sure that we provide them with the right service.
Also that we're providing lightweight.
Our solution.
It's probably a positive for <unk>.
Thanks for that detail and with Bear Island, specifically can you give us an indication of.
Startup costs that were embedded in overall third quarter EBITDA.
And what's the timing for that.
The transition to positive EBITDA at the asset.
Okay. So we like Mario mentioned in the introduction.
Q3 was still not <unk>.
Positive overall.
But the good news for US is in September.
We were.
Broke the.
The positive side, if I can say it like that than we are.
We intend to continue that.
For an ongoing.
Okay, that's encouraging.
Last question for me on tissue.
The gains that Cascades in margins this quarter outpaced the industry.
Generally speaking can you give updated comments on where the company stands regarding obtaining all the benefits through their various restructuring efforts you've you've rolled out in.
Recent quarters.
And I presume all the price increases are fully baked into your your realizations at this point, but I guess the potential for further margin expansion.
Absent fiber costs.
Volatility.
Any further gains to be expected on that front.
Yeah, Good morning, Sean.
We believe there is still a potential.
Don't know about the market.
What will happen with the <unk>.
Virgin pulp and recycled fiber prices, but internally I can't say that we have.
A lot of opportunity and again network optimization, having the right product being produced at the right Mill also in terms of integration, we're still buying another jumbo roll internally, so optimizing the trends with the converting lines that we have et cetera, and there is important.
Important initiative for cost reduction.
Mid level, so we still foresee a good improvement good potential, but overall, what will happen with the market so well.
What will be the end result in terms of margin, it's tough to predict but internally I can say there is still.
Greater Fortunately did capture.
Yes.
Okay. Thanks, very much for that detail that's all I have.
Thank you next question will be from Amit Patel CIBC capital market. Please go ahead.
Hi, good morning.
Alan what are you planning for Capex in 2024, and maybe if you could just update us on where you see your leverage ratios going by the end of next year.
Well.
We're keeping the same targets as we disclosed at our strategic plan update so at $175 million for next year. So.
And we feel that our leverage should come within the target range, we announced.
Great.
How do you think about just given bear island is ramping up well.
I need to add additional converting capacity.
Timing of when that capital investment might follow up.
So I'm going to take that one.
So the plan.
Sure.
For us since we started.
Maryland was first.
To make sure that we.
We set up the mill to run well and follow the <unk> ramping up which is the case right now.
The product is as.
As well received by the market. So that was our first objective.
To optimize the mill.
It was also part of our phase, one which is being done right now and following.
Regarding the.
The integration.
I mentioned earlier that our scatter way and our investment that we made in Ontario.
<unk> in the last two years, we still have room to integrate more volumes. So that's the next step that we're doing in for the rest of the.
The integration.
We are working and looking at projects.
But we are going to.
Look at the $175 million that we set for capital investments and we will follow that path, but the goal is still to work on the integration.
<unk> that.
Once we took.
But I just mentioned.
Okay, great. Thanks, Charles said, that's all I had I'll turn it over.
Thank you next question will be from Matthew Mckellar at RBC. Please go ahead.
Hi, good morning, Thanks for taking my questions.
So I'd like to start here. So tissue is running really well you spoke to your target for that business as it relates to 24 as well as to your leverage targets.
Just more broadly how are you thinking about your level of confidence around some of those other 'twenty 'twenty four targets anything you call out the team either more or less achievable at this point.
Well.
What we can see that you added. This time is that we are still comfortable even though we're facing some headwinds in our packaging business, but we have.
As you saw a strong 10 wins in tissue So Ali.
All in all I think we're still comfortable and I think we will we.
We will reconfirm everything in the next after the fourth quarter, so but for now we're still within that target.
Dave we set to the market.
Okay. Thanks for that.
Maybe shifting over I think you mentioned some pricing pressure in tissue tissue as part of your outlook into prepared comments can you talk about what the latest is that youre seeing in that market.
Yes, good morning, but right now we're not seeing we're seeing pressure in Canada as you know from from the government against the retailers. So there is a lot of discussion around the <unk>.
Retail in Canada.
We don't we don't see much pressure elsewhere, I think people are waiting to see what will happen with the.
Raw material pricing pulp prices will be pricing so.
We're managing as Mary mentioned, we have a pricing model in place.
<unk> customers also so we believe we're kind of protected for.
An important part of the business, but.
But we will continue to work with their customers and followed the market.
And the company coming quarters.
Okay. That's helpful. Thanks, and then last for me.
There was a comment on your molded pulp business that labor challenges limited shipments in the quarter and I think you've previously spoke about some operational issues. There are you able to provide a bit more color on what happened and whether those challenges are persisting into Q4.
Hey, good morning, Matthew.
John speaking so in thermal molded pulp yes.
We announced in Q4 to Q2 that we had some operational issues that continue art in Q in Q3, However, as mentioned by Mario in the beginning the operational issue behind Us and we're forecasting we're seeing a good Q4 for the multiple because of them until theyre. So investment has been made to stabilize in <unk>.
Stabilized production in the desired output.
Okay. Thanks, that's all from me I'll turn it back.
Thank you next question will be from Zachary <unk> of National Bank. Please go ahead.
Thank you good morning, everyone and congrats on the quarter.
Thank you. Thank you. Thank you.
As we're thinking about sustainability of tissue margins, you did indicate that lower raw material costs contributed 15 million tissue tissue EBITDA and lower freight was another million dollars could you maybe comment about how much of that benefit you can backfill with operational improvement when or if pulp and free.
<unk> begin to fade.
But I don't have the exact number but what I can tell you is as we explained in our Investor day in Virginia. The tissue business that we have now is much more resilient than it was years ago. So when you look at the platform that we have.
10 meals instead of 20.
With fewer employees fewer customer fewer product I think now we have a much better business that will go through the cycles in the coming year. So honestly, we won't see again.
Issues as we saw in 2018 and 2022.
Really confident that the <unk>.
<unk> will be able the business, we'll be able to follow.
Typical market cycle.
Our competitors are seeing but.
We have much.
<unk> and stronger business today with the investment also that were done modernization.
Closure of older plants et cetera.
Thank you for that.
Could I get your view on the supply and demand dynamic in containerboard going into 2024, given the announcement recent announcement of mill closures versus new capacity ramping up and what youre seeing on the ground in terms of consumer demand trends.
Okay.
Okay. So on the overall market.
You all saw the published.
The numbers of the additional capacity and also the closure.
As we speak right now I'm going to use what was published.
There is.
With a one on one for growth on the on the market with the demand.
The market in the mid to long term seems to be better.
The way, we see it right now.
And on our side.
Youre seeing that we're taking the steps to make sure that we're balancing also our inventory level based on the on the demand.
The other thing that would add to this as Cascade is a lot better equipped right now with.
About $1 1 million and $1 4 million tonnes sorry.
<unk>.
Volume on the containerboard side that is tier tier one.
So we're better equipped to compete.
I would just say that we are going to manage on our side based on the market condition, but.
The mid to long term seems to be looking good right now overall in the market.
Okay. Good color, thanks, and just one last one.
You guys are outperforming box shipments in Canada, and the U S. Obviously, there is a contribution there from bear island is anything else lifting that.
While the mainly when we look at the.
The the performance.
We are doing compared to the market.
It's really based on the yes, we have been.
Focusing our sales team on specific market that are growing a bit faster than the average market right now so meaning like the.
E Com.
<unk>.
The distributions, so which is helping us.
One of the market that is not doing as good as part of the time being just because of the economy as the.
The industrial so.
It's about 15% of our volumes overall, when we look at the market. Our strategy has been to focus on faster growing market and it's paying off but in addition to that as I mentioned earlier.
Growth is also coming.
Largely because of the investment that we made in Piscataway.
Which has been very good for cask axa tissue well located and servicing also markets that are growing faster than the average and the same thing also in our region in Ontario.
When you look at the overall.
Ontario market is more than 50% of the overall market in Canada, and that's where we decided to make.
Make a major investment into.
Align our.
Capacity to service the market.
Very helpful. Thanks, I'll turn it over.
Thank you.
Minder, ladies and gentlemen, if you would like to ask a question. Please press star followed by one on you touched on the phone.
And your next question will be from <unk>.
Probably at Deutsche Bank.
Thank you Michael.
Michael No listens to a catheter team, calling the passing of Mr. Nomura.
Thank you. Thank you sorry.
Sorry, if I missed it but maybe as a follow up to that last question there on containerboard and I'm just trying to figure out.
What would've been the shipment growth from your legacy operations, if we exclude the contribution from from new capacity on Bear Island.
Can you provide some comments on that.
No we're not going to comment on this since.
We have a.
We look at the overall network that we have.
And this is what we.
We're doing right now and.
When we're making our decision of where do the volume is going to be produce we're making our decision.
Bring the most profitable in situ to Scott.
So again, we're seeing this as an overall so we're not going to disclose any specific.
Counting or new or.
Facility or in the network.
Okay understood switching to tissue on.
The away from home just curious to get your thoughts on what Youre seeing in that market right now and what are your expectations as we progressed.
And then uncertain economic environment is that an area, where youre seeing some weakness now or has it been fairly resilient so far.
Good morning clinic. So it's been stable honestly I think everybody is waiting to see what will happen, though it's a big question Mark for sure.
One thing also we've done internally is that business now represent one third of our business versus almost 50%. So we gained some flexibility. So we're we're less at risk than we were towards or away from home versus two years ago first thing.
Other thing is.
October was our best month for the year. So in terms of case shift so I think overall it shows that the.
The market is still is still solid but as I said earlier I think we'll pick the right customer also as Sean mentioned.
Having the right customer who are growing.
In those difficult period.
The mix of product that we have.
Which is not in the ultra segment is also helping us we're not really strong in the office channel leader. So it's also somewhere.
We're gaining so overall I think we are.
Still optimistic and positive about their business, but for sure. There is a lot of uncertainty as you all know.
Nobody knows exactly what will happen next year, but I think we are again.
A much better position to go to.
The coming quarters.
Great. That's it thank you.
Thank you.
No further questions at this time Mr. Plourde. Please continue.
Thank you everyone for being underlying this morning, and looking forward to talk to you.
Fourth quarter and a good day. Thank you.
Yes.
<unk> also from suite.
Coffee.
Ladies and gentlemen, this does conclude today's conference you may now disconnect your lines.
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Okay.
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