Q4 2024 Transcontinental Inc Earnings Call
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Speaker Change: Welcome to the TC transcontinental fourth quarter and fiscal year 2024 results conference call.
Speaker Change: During the presentation all participants are in a listen only mode.
Speaker Change: Afterwards, we will conduct a question and answer session and instructions will be provided at that time. As a reminder, this conference is being recorded today December 12, 2024, and I would like to turn the conference over to your end up point director of Investor Relations and Treasury, Jim, but I might note that Mr. Yet at the 0.2 hectare her lifestyle.
Speaker Change: It does have a sort of it was lucky but she left points. Please go ahead.
Sydney: Thank you Sydney and.
Speaker Change: And good morning, everyone on the call.
Speaker Change: Welcome to pulse called snap ADS' fourth quarter and fiscal 'twenty 'twenty four earnings call.
Speaker Change: Before we begin please note that our quarterly report, including financial statements and related notes as well as the slides to support the managements remarks are available on our website at www Dot piece teed up under the Investor Relations section.
Speaker Change: A replay of this conference call will also be available on our website shortly after the call.
Please note that this conference call is intended for the financial community media are in listen only mode and should kind of take methane Asia.
Speaker Change: As a senior advisor corporate locations for more information.
Speaker Change: We have with US today are president and Chief Executive Officer Ted.
Speaker Change: And our executive Vice President and Chief Financial Officer.
Speaker Change: Kevin.
Speaker Change: As referenced on slide two.
Speaker Change: Financial measures discussed over the course of this conference call are non ifr.
Speaker Change: Refer to the MD&A for a complete definition and reconciliation of these measures play a part.
Speaker Change: In addition, this conference call might also contain forward looking statements.
Speaker Change: Statements are based on the current expectations of management and information available as of today and they involve numerous risks and uncertainties and unknown.
Speaker Change: Risks uncertainties and other factors that could influence actual results are described it into fiscal 'twenty 'twenty four annual Nvme released yesterday and then the annual information farmer.
Speaker Change: With that I would like to turn the call over to our President and CEO Tom.
Tom: Got it.
Tom: Thank you Jan and good morning to you all.
Tom: And we posted solid results in Q4 and I. Thank our teams for the discipline work in reducing costs and improving profitability we.
We are pleased to end the fiscal year on a strong note.
Tom: Packaging sector. Despite continued.
Tom: Weakness in our medical market with improved profits again, mainly as a result of cost reductions.
Tom: For the 24 financial year, but adjusted EBITDA was up 14, 2% over the previous year at $262 million. This is a record for our packaging sector.
Tom: In our retail services and printing sector, we recorded an increase in profit for the second consequences quarter. This is the result of our actions to improve our cost structure as well as our growth in our in store marketing activities.
Tom: For fiscal 2004, our adjusted EBITDA was up two 1% over the previous year. Another welcome achievement.
Tom: In terms of sustainability the size the same space targeted initiatives organization or <unk> approved a near term emission targets in October from now these targets will serve as our primary measurement for some sustainability objectives.
Tom: These include energy efficiency clean energy procurement and the commercialization of sustainable packaging solutions.
As an update on recyclable packaging and our new European Island, Spartanburg, South Carolina.
Tom: <unk> has gone very well and we're very pleased with where we stand as we speak.
Tom: 24 was also a year of progress in safety.
Tom: By reducing the number of accidents by 9% compared with the previous year, we've reached a new milestone we improved our frequency rates to a symbolic one point out. This is an industry measured based on the one accidents per 200000 work hours. The efforts of our teams are paying off and we will continue along this path to get closer towards zero injury vision.
Tom: To sum up we delivered a solid financial performance in 'twenty for this was made possible by our discipline in implementing our priorities as.
Tom: As well as our three year program to improve our profitability.
Tom: National position, but.
Tom: At the end of 2000 and for fiscal year, we generated over $30 million of our two years target of $40 million in recurring savings. This was achieved through the reduction of cost of goods sold fixed cost reductions and the turnaround of underperforming plants.
Tom: Just up to the end of Q4 on October 28, we announced an important transaction for our packaging sector. The sale of our industrial packaging operations for $95 million U S subject to working capital adjustments.
Tom: Industrial packaging was a good business for US however, it offered through synergies with the rest of our portfolio I was not core to us.
Tom: Let me now address distracted candidate folks first I am extremely proud of how we have responded to the situation.
Tom: Our teams have come together to meet the challenge with truly amazing work.
We were ready for disruption.
They're listed logistic partners to quickly deploy a distribution network for radar and Quebec in British Columbia.
Tom: Currently distributing over $1 1 million copies of radar and order 1000 doors in Quebec, and 320000 doors in British Columbia in.
Tom: Individual slow distribution also continues and I'll tell you another in other provinces through existing channels.
Approximately 70% of tended to endorse that we're receiving the radar or sort of Flyers before the strike are still receiving them.
Tom: While the consultation of digital Flyers is up maybe retailers are seeing a decrease in store traffic in those areas where printed fliers are not available.
Tom: Again this points out the value of printed flyer in combination with digital.
Tom: Our customers have expressed appreciation for the way we are supporting them, praising our agenda, so kudos to the team why.
Tom: While we cannot predict how long the strike will last we are doing everything we tend to mitigate the impact of visitors.
Tom: Looking forward to fiscal 'twenty five we will continue to implement their two of our profit improvement program with the same spirit of leaving no stones unturned with the same determination.
Tom: Additionally, with our improved financial position, we're looking at in acquisition markets in all three sectors to complement offering a footprint in that capacity.
Donald: Now I'll go to you Donald thank.
Thank you Thomas and good morning, everyone moving to slide five of the earnings Call's presentation for the fourth quarter, we reported revenues of $749 $3 million at three 9% decrease versus last year.
This decline was caused by lower volume in our two main sectors, partially offset by positive exchange rate impact.
Donald: <unk> profitability, we delivered a strong quarter with consolidated adjusted EBITDA of $142 $2 million.
Speaker Change: Well that just adjusted EBITDA was slightly lower than last year due to due to incentive compensation expenses, including stock based compensation adjusted EBITDA grew in our two main sectors.
Speaker Change: Financial expense decreased by $2 2 million, mainly due to a lower debt level following strong cash flow generation in the last 12 months.
Speaker Change: Adjusted his contacts increased by $4 2 million to $21 6 million and represented an effective rate of 24, 3%.
Speaker Change: This led to adjusted earnings per share of <unk> 79, compared to 83.
Speaker Change: Same quarter last year.
On a full year basis, despite a $7 $3 million impact on our stock based compensation. Following our share price performance. We grew adjusted EBITDA by five 1% to $469 4 million.
This increase was mainly due to our cost reductions and efficiency initiatives related to profitability improvement program and also benefited from a positive exchange rate impact of $2 $3 million.
Speaker Change: Combined with lower depreciation and amortization and lower financial expenses and led to a fiscal year of fiscal year 2024 adjusted earnings per share of $2 34.
Speaker Change: A 15, 3% increase from fiscal 2023.
Speaker Change: Now moving to slide six for the sector review.
In packaging for the fourth quarter.
Speaker Change: We generated revenue of $415 $7 million or one 2% decrease compared to last year.
Speaker Change: The decrease is mainly due to lower volume, notably in the medical markets market, where we continue to see some weakness.
Speaker Change: In terms of profitability adjusted EBITDA and packaging grew by six 5% to $65 $7 million, our fourth consecutive quarter of year over year profit growth.
Speaker Change: This solid performance led to a 15, 8% EBITDA margin of 110 basis point improvement versus last year. This.
This concludes a very strong year for our sector with adjusted EBITDA of $262 $2 million a record year for the sector and a 14, 2% improvement compared to fiscal 2023.
Speaker Change: It is important to note that we delivered a strong profitability without any benefit from top line growth.
Speaker Change: We clearly see the impact from our profit improvement program on our bottom line. This fiscal year and we will continue to push forward with more initiative in 2025.
Speaker Change: Moving to the retail services and printing sector on slide seven.
Speaker Change: Revenues decreased by seven 4% to $288 3 million. This was mainly due to lower volume in our traditional printing activities, including the transition to radar.
Speaker Change: Adjusted EBITDA grew by four 1% to $63 $6 million.
Speaker Change: This is the second consecutive quarter of profitability improvement for the sector and supported our full year adjusted EBITDA of $201 million, a $4 1 million.
Speaker Change: The improvement versus fiscal 2023.
Speaker Change: This improvement came in large part from a combination of our cost reduction initiatives the optimization of our manufacturing network.
Speaker Change: It fit of the rural rollout of radar and growth in our store in store marketing activities.
For fiscal 2024, adjusted EBITDA margins grew 200 basis points to 18, 8%, reflecting EBITDA growth from cost reductions and our efforts to improve our product mix towards higher value products and services.
Speaker Change: Now turning to cash flow as expected and in line with normal seasonality Q4, 'twenty to 2024 was a strong quarter.
Speaker Change: We generated $185 million from operating activities compared to $246 2 million in the previous year. Following the strong working capital benefit in Q4 last year from inventory improvement.
Speaker Change: The implementation of a new factoring program.
Speaker Change: Our capex at $24 2 million or $4 $8 million lower than last year to bring us to a full year total of $121 5 million at $56 million dollar reduction in line with our priorities as we get closer to our normalized run rate.
Speaker Change: Despite allocating $4 6 million insurers buyback in the quarter, we continued to improve our net debt ratio to reach 171 times at the end of the fiscal quarter compared to 191 times three months ago.
Speaker Change: Looking forward with the proceeds from the sale of our industrial packaging activities that closed on October 28, the strong cash flows from our operating activities. We expect this ratio to continue to improve in fiscal 2025.
Speaker Change: Overall, we are very pleased with our results in fiscal year 2024, especially as it related to our profit improvement program and cash generation.
Speaker Change: As we continue to improve our cost base, we are confident in our outlook.
Speaker Change: For fiscal 2025, and our packaging sector, we expect to see volume growth.
Speaker Change: As we are now seeing improvement in demand in most of our end markets and signs of stabilization in the medical market.
Speaker Change: However, we expect this volume growth growth to be offset by pricing pressures in.
Speaker Change: In terms of profitability, we expect to grow organically the adjusted EBITDA again in fiscal 2025.
Speaker Change: In our retail services and printing sector.
Speaker Change: Including the impact of the labor conflict at Canada, Bulks, we expect to deliver a stable adjusted EBITDA in fiscal 2025 compared to 2024.
Speaker Change: Regarding the impact of the labor conflict and will depend on how long. It will last to date, we estimate a profit impact of about $7 million as we experienced experiencing a loss of volume related to radar and additional costs for establishing alternate distribution networks and sub regions in Quebec.
Speaker Change: At the same time, some customers are saving their promotional programs budget for later.
Speaker Change: Once the strike is over.
Speaker Change: We expect corporate cost at the EBITDA level to be around $45 million part of Europe.
In terms of capital allocation, we expect Capex about $120 million in fiscal year 2025 in line with fiscal 2024.
Speaker Change: We also plan to continue being active on our share buyback program.
Speaker Change: As for cash taxes, this should be around $75 million in fiscal year, 2025 of which 25 million is related to the sales of our industrial business.
Speaker Change: Finally in terms of our monetization of real estate, we expect to close the sale of two buildings in fiscal 2025 that will bring us close to our initial objective of $100 million over two years.
Speaker Change: On that note. We will now proceed with the question period.
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Joe: Yes, Joe.
Speaker Change: Ladies and gentlemen, we will now conduct a question and answer session.
Speaker Change: We have a question. Please press star followed by one on you touched on something you will hear a tone acknowledging your request.
Speaker Change: Your questions will be called in the order that they are received please ensure you lift the handset.
Speaker Change: A speaker phone before pressing any teams one moment. Please for your first question.
Mr. Mcnaughton: First of all Mr. Mcnaughton.
Mr. Mcnaughton: As steel to Adam Shine National Bank Financial My first question is from Adam Shine National Bank financial.
Hi, Thanks, a lot good morning.
Speaker Change: Can you talk a little bit about what youre seeing out there in the packaging marketplace. We're seeing a lot of consolidation activity, maybe speak to opportunities for you to pick up either key talent out there and or even potential customers and at the same time, we're talking about M&A opportunities going forward, particularly with us.
Speaker Change: Stronger balance sheet talk about what maybe the M&A pipeline might look like.
Speaker Change: Yeah, Thanks, Shannon and good morning, yes.
Speaker Change: There is and there was a lot of announcements in the last few weeks on the movements on these.
Speaker Change: This.
Speaker Change: Packaging market with the acquisition we've seen.
Speaker Change: I'd say two things on this one first it hasnt changed much our go to market strategy as we speak it's always been.
Speaker Change: A combination of being close to customers of Giles cost efficient speed agility.
Speaker Change: IDT with either one thing so the fact that we see a consolidation actually reinforces this.
Strategy.
Speaker Change: <unk>.
Speaker Change: Now when it comes to opportunities of hiring tenants of course, there were some clear announcements on the synergies expected in SG&A from from those acquisitions and we very much alert and look at who could be the right talent for us.
Speaker Change: When it comes to seizing these opportunities.
Speaker Change: Now the.
Speaker Change: The second part of your question is on is on the.
Speaker Change: The opportunities with creates from an M&A standpoint, I think this creates a lot of opportunities out.
Speaker Change: There is a lot of movements there is a lot of us.
Speaker Change: Competitors in converters looking at what to do as we speak we obviously are very alert as well on this and we will seize opportunities when the when becomes it's it has to remain as a as I could tell you a few a few times already test to remain in line with our with our strategy for us.
Speaker Change: Growth in the scale is not any longer what we're looking for what we're looking for is becoming even stronger in those segments. We planning and that's also why we actually sold the industrial segment. Because this is something we consider as non strategic for us So to summarize up we'll look at what can be as an unfortunate in terms of reinforcing.
Speaker Change: Current value proposition.
Speaker Change: So we think about the $20 million to $40 million cost cutting target that obviously, you've hit the $30 billion Mark as he telegraphed.
Speaker Change: Couple of quarters ago.
Speaker Change: Do you see an opportunity just in terms of momentum to potentially get beyond.
Speaker Change: That $40 million I know them.
Speaker Change: I push you a little bit harder here, but do you believe that momentum has evolved such that there is additional lines of sight to go beyond that initial target that you put out a year ago.
Yes. Thank you for stressing this first I will reinforce my message very proud of the way the team.
Deployed energy in and states focused in delivering these savings.
Speaker Change: I touched on that in my speech D. We obviously continue to work on this and Donald you said city too.
Speaker Change: First there is a run rate so we need to continue that.
Speaker Change: Benefits from this ramp up second we'll have two of them. It's part of our DNA. It's the way, we're working and Tc transcontinental.
Speaker Change: We'll have to stay competitive cost competitive and that's the way to be competitive so in the in the changing environment. You described will have so the answer is yes.
Okay. All scholarship again, thank you.
Speaker Change: Betsy.
Speaker Change: My question <unk> next question will be from her Yaghi of Scotia Bank. Please go ahead.
Speaker Change: Great.
Speaker Change: It can make it.
Speaker Change: So I just wanted to first.
Talk about the strike in its impact.
You detailed in the note that in our prepared remarks.
Speaker Change: The potential downside from the strike so far up to December 11th out.
Speaker Change: I was trying maybe if you can just.
Speaker Change: Give us the numbers on revenue and <unk>.
Speaker Change: But.
Speaker Change: Separately.
Speaker Change: You can also quantify the impact on a per week basis I was just trying to figure out what's included.
Speaker Change: In.
Speaker Change: Up to December 11th because I think the first week of the strike you still got paid because you printed.
Speaker Change: The suppliers, but then the second weekend weak you did not so I was just wondering if you can just clarify a little bit. These these these things for us. Thank you.
Speaker Change: This is Donald speaking, we'll get back to you offline regarding revenues because this is something that we're really.
Speaker Change: Closed yet the demand so but what we know for sure is what we said is that we have as of today.
Speaker Change: Around $7 million of EBIT impact.
Speaker Change: Part of it is yes it is.
Speaker Change: Solid Q1.
Speaker Change: The first for the first few weeks were order on total in five because obviously, we had to adjust we print job that we didnt distribute I'll say that right now if you had to establish a run rate per week, it will be a bit north of $1 million per week the handbag.
Speaker Change: Millions a week, okay on the EBITDA okay.
Speaker Change: That's good color. Thank you. Thank you Bob.
Speaker Change: Yes.
Speaker Change: Okay and then on.
Speaker Change: More of a bigger question as a long term sales from from the strike now.
Speaker Change: Now.
Speaker Change: Habits form habits can be.
Take care.
Speaker Change: Loss and so.
Speaker Change: What's your thinking about if the strike is prolonged.
Do your customers are.
Starting to think about finding other ways to send their flyers and if so.
Speaker Change: How do you see that.
Behavior change potentially affecting radar long term.
Well Thomas now.
Speaker Change: Two things again to say on this one first I think the team has reacted extremely well to support the model itself.
As we as we could say, 70% seven zero percent.
Speaker Change: Of the Flyers are kept on being distributed to the Canadian doors as we speak so decision support to the model, you're referring to and we got a lot of great comments and positive comments from customers. The second thing I would say is our customers and they've been very vocal about this unit get towards.
Speaker Change: The RCC the retail Council of Canada has been published and the customers are extremely unhappy with what happens and it really wants to add to this strike trend as we could as we can imagine.
Speaker Change: Because they could notice that this heightened impact on their sales in the last few weeks. So we expect the model and we've seen them all delivering results and the numbers are showing it.
Speaker Change: It's too early to say to answer your question. It's too early to say, whether this will change that you have done so.
Speaker Change: We can take this question and few weeks you should continues.
Speaker Change: So for the moment the customers Super supportive to team has been responding extremely well and 70% of the doors are still being delivered.
Speaker Change: Yes.
Okay great.
Thank you and just more and more on the packaging side.
Good color from you guys in terms of the volume growth, it's nice to see.
Speaker Change: On the tariffs can you maybe clarify a little bit for us.
Speaker Change: And again this is a hypothetical question is everybody's thinking about tariffs.
Speaker Change: How tariffs.
Speaker Change: They were to be implemented.
Speaker Change: By the New U S administration.
Speaker Change: That can affect both volume.
Speaker Change: How you operate the business.
Speaker Change: And its impact on your financial results.
Speaker Change: Yes.
Speaker Change: One as well.
Speaker Change: So first let's.
Speaker Change: The sexual saw a cross border exposure is pretty limited.
Speaker Change: Talking about the original shy of 10% of our sales are now, including these both packaging and retail services and printing. So it's about so shy of 10% of what we do.
Now we can debate on whether it is just tariffs will happen or not I think this is not where we should spend time.
Speaker Change: The one thing we're looking at is how can how could we.
Speaker Change: Find workarounds and as you know we have a pretty significant footprint in the United States. It's the majority of what we are what we do in packaging.
Speaker Change: We can leverage to serve this footprint pretty quickly I would say, we're talking about months not years.
Speaker Change: So to meet to quickly answer your question.
Speaker Change: Rather limited exposure should should tax weapon.
Speaker Change: Okay, great. Thank you.
Speaker Change: Finally, just on Europe.
Speaker Change: Your buyback.
Speaker Change: Now with the stock.
Speaker Change: The stock has done.
Speaker Change: Nice performance lately.
What's your thinking have you updated your view on this on the share buyback given the strength you are seeing in the stock or do you still see it as a.
Speaker Change: Undervalued and we should expect you to continue buying back your stock going forward at these levels at least.
As I've said in my opening remarks, we plan to be active I think the position we have on our balance sheet us allow us to keep supporting the stock being proactive on acquisition.
Speaker Change: If it happens in front of us So we plan to be active.
Speaker Change: And the market when we were part of the backup.
Speaker Change: Sorry, the back half of the year or.
Speaker Change: The blackout period.
Speaker Change: Did not properly sorry, yes, sorry to be clear we are in the black hour social volatile, but we've been active in during the blackout period, and we plan to be to continue to be active in the coming days.
Speaker Change: Okay.
Speaker Change: Okay. Thank you very much.
Speaker Change: Thank you.
Speaker Change: Your next question will be from Stephen Macleod BMO capital markets. Please go ahead.
Stephen Macleod: Thank you good morning, good morning, guys. Thanks for all the color so far.
Stephen Macleod: Just a couple of questions I wanted to follow up on the first one is in the packaging business.
Stephen Macleod: Can you talk a little bit about kind of what youre seeing on volumes outside of medical.
Sort of what you saw in Q4 and sort of how youre seeing that evolving as you turn in turn the page into fiscal 2025.
Stephen Macleod: Yes.
Speaker Change: So it's slightly positive as we speak at the beginning of the year is.
Speaker Change: Is promising.
Speaker Change: Volume wise.
Speaker Change: And I would add on medical we clearly saw a stabilization in the last.
Speaker Change: A couple of months few weeks.
Speaker Change: Okay. That's great and then are there any any areas that are notably driving us to slightly positive growth that youre seeing sort of on a year to date basis fiscal year to date basis.
Speaker Change: Well.
Speaker Change: Yes, we are very focused in terms of packaging segments, we play in so.
Speaker Change: I wouldn't say that.
Speaker Change: Segments are driving the growth I would say our value proposition is driving the growth.
Speaker Change: Quick quick and.
Speaker Change: <unk>, it's across the board.
Speaker Change: Okay. Okay.
Speaker Change: Okay, that's great and then.
You seem to talk quite positively around the potential for acquisitions given the.
Speaker Change: The balance sheet and obviously the inflows from the sale of the industrial packaging business. So I'm just curious if you could give a little bit of color around kind of how you would how you would view your preferreds and markets all acquisitions.
Speaker Change: Are we right to believe that sort of focus on packaging and retail services and printing business will be secondary to that.
Speaker Change: Just wonder if you can give a little any incremental color.
Speaker Change: I'd say again two things on this one first.
<unk> invested a lot of capex.
Speaker Change: Yes.
Speaker Change: Three years I would say in packaging in terms of capacity and technology. So the priority for packaging as we speak as to leverage on those investments, which has been important and large so that we can grow and we can grow in those dedicated segments, we talked about so actually.
The first moves we made you would be we'd be maybe more on the other side on the retail services and printing since we have capacity.
Speaker Change: Technology to leverage on the packaging side.
Speaker Change: Okay, that's great and then and then maybe just finally.
Speaker Change: If you did find an acquisition that you thought was was compelling.
Speaker Change: Would you be willing to use the balance sheet to fund that acquisition and if so is there a sort of a comfort level of our target level of around net debt to EBITDA that we should be thinking about what would you be would the preference be to use your free cash flow to fund any potential acquisitions going forward.
Speaker Change: Well.
Speaker Change: If you looked at it.
Speaker Change: <unk>, obviously, a strong free cash flow in 2020, followed by 2025 now that the Capex program is more.
Normally if I can say that way so.
Speaker Change: It depends of the dollar of acquisition, but.
Speaker Change: For sure to free cash flow will deliver to us in 2025, if you pro forma right out where we are.
Speaker Change: Post Q over Q4 with the backlog of the sale of the industrial business. We're in good shape.
Speaker Change: No.
Speaker Change: The bottom line is that we did it.
Speaker Change: <unk>.
Speaker Change: Our strong balance sheet to be proactive, but it doesn't mean that we will be proactive we wanted to be in that position and we still want to grow the EBITDA, that's part of our priorities either by acquisition or organic growth.
Speaker Change: Okay that makes sense. Thanks, guys I appreciate it.
Speaker Change: Thank you.
Speaker Change: No question gets to the next question will be from David.
Speaker Change: Cormack Securities. Please go ahead.
Speaker Change: Great. Thank you a couple of questions.
Speaker Change: You said that you expect corporate costs to be $45 million in fiscal 'twenty time can you give us there.
Speaker Change: Comparable number what it was in fiscal 'twenty four.
Speaker Change: For 2025.
Speaker Change: Give me a second I'll give you that now what it what was it for fiscal 'twenty four.
Speaker Change: 124 was $44 million.
As far you find out Oh, Okay, sorry, I misunderstood you okay yeah.
Speaker Change: Spectation for 'twenty time.
Speaker Change: Hey, Joe.
Speaker Change: Thanks, Zhong, Okay, alright, despite despite the higher stock comp in that you incurred in 2000, <unk> don't expect it's going to be about the same in 'twenty time.
Speaker Change: Yes.
<unk> important to understand we don't do any forecasts regarding where the share price will be in 2025. So if you model you should take.
Speaker Change: Your own view on the shares share price.
Speaker Change: Part of the number we disclosed for 2025.
Speaker Change: Okay. Okay.
So when I look at the working capital.
Speaker Change: Pulled out 34 million in fiscal 'twenty $411 million fiscal 'twenty three.
Speaker Change: So should we assume that you've called out what you can and now the business is kind of going to kind of be stable from a working capital point of view going forward.
I think you can model is stable because what Arthur now so we have a different mix growing in that business that does have an impact on the working cap for model purpose, yes that will be the right approach, obviously, we'll try to do better but stable should be the numbers.
Okay.
Speaker Change: So youre expecting.
Speaker Change: A pickup in volume on packaging in fiscal 'twenty five fiscal.
Speaker Change: Fiscal 'twenty foreign lines, where we're down so just wondering what would cause.
Speaker Change: As you have the confidence to say that you think volume is going to be higher in 'twenty, five and what's really driving that and why did the dairy volumes do in packaging is between clients.
Speaker Change: So specifically to dairy I suppose your question Yeah, I'm just curious as you know obviously your second largest dairy packaging you happened to me.
Speaker Change: And then I was just wondering.
Speaker Change: How did that perform in 24 at midnight.
Speaker Change: What gives you confidence for 25 right.
Speaker Change: Alright.
Speaker Change: Two things I think it's a combination of customers demand picking up in <unk>.
Speaker Change: Back on the matter has been pretty hard.
Speaker Change: Given the inflation rates, we saw in the last couple of years. So this is starting to normalize so customers are more positive about their end consumer demand first thing and second thing is obviously the investments we've made and the relationship we've grown with our customers helps us.
Speaker Change: Gain share of wallet, so that's really what drives the growth.
Speaker Change: Okay Alright.
Speaker Change: Alright. Thanks.
Speaker Change: <unk> she was at <unk> Suisse.
So later on.
Speaker Change: So as it is in FY <unk>.
Because like I said that I have on the <unk>, ladies and gentlemen, if you have any additional questions. At this time. Please press star followed by the one as a reminder, if you're using a speaker phone. Please lift the handset before pressing the keys.
Speaker Change: A question I guess, Joe Your next question will be from drew Mcreynolds RBC. Please go ahead.
Speaker Change: Yes, thanks very much good morning, two for me.
Speaker Change: Tom I was just on the.
Speaker Change: The overall packaging markets starting to commentary on volume and end market demand on the pricing side.
Speaker Change: You've made the comment all the investment that you've.
Speaker Change: You've made in the business that drives the value proposition is that are you able to kind of shield yourself from some of that on a more commoditized pricing pressure within the within the market.
Speaker Change: And then secondly, maybe for you Don out just could you remind us the EBITDA impact.
Speaker Change: When you sold the industrial packaging. Thank you.
Speaker Change: Yes. Thank you for the question. So demand goes up there is just more volume available.
Speaker Change: This has an impact of <unk> on pricing as a mechanic.
Speaker Change: And a quick and simple answer now from a protection to two pricing pressure, we have contracts of about 70% of our volumes I think it's north of 70% of our volumes are protected if you will that are under contract with which we have.
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Speaker Change: Commodity raw material pass through clauses both ways. So that's why that's where we feel reasonably confident in the way we can.
Anticipated, but also protect ourselves from a margin standpoint.
Speaker Change: And for the industrial and our 2024 numbers, it's north of a bit nervous than U S.
Speaker Change: Industrial Yep that's great.
Speaker Change: Thank you both.
Speaker Change: Thank you drew.
Speaker Change: And it sounds like you have all the question listen at point there are no further questions at this time.
Speaker Change: Well. Thank you everyone for joining us on the call today, and we look forward to speaking with you soon.
Speaker Change: Mackenzie misuse CCT, I mean level coffee hospitals Massey difficult at Scottsdale.
Speaker Change: Ladies and.
Speaker Change: Gentlemen, this concludes the conference call for today. Thank you for participating please disconnect your lines.
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Speaker Change: Okay.
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Speaker Change: Yes.
Speaker Change: [music].
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Speaker Change: Okay.
Speaker Change: Okay.