Q1 2025 Transcontinental Inc Earnings Call
Ladies and gentlemen, thank you for waiting and welcome to the conference call.
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first quarter, fiscal year 2025 of TC Transcontinental. During the conference, all participants will be in listen-only mode. A question period will follow the presentation and instructions will be given at that time.
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Speaker Change: We wish to remind you that this conference is being recorded today, March 11, 2025.
Speaker Change: New Dcs will gradually.
Speaker Change: Jacob So called Fat also temperature state owes you'll see the old NAFTA, Dave its Mike.
Speaker Change: Welcome to the TC Transcontinental First Quarter of fiscal year 2025 results conference call. During the presentation, all participants will be in listen only mode. 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 March 11, 2025. I would now like to the conference over to Yan Lapointe, senior director, investor relations and treasury. Mr Lapointe, please go ahead.
Speaker Change: Welcome to the key she trusts kind of content that until first quarter of fiscal year 2025 results conference call. During the presentation, all participants will be in listen only mode.
Speaker Change: Afterwards, we will conduct a question and answer session and instructions will be provided at that time as.
Speaker Change: As a reminder, this conference is being recorded today March 11, 2025, I would now like to turn the conference over to you on that point Senior director Investor Relations and Treasury Chevron permitting us to do that Pat what are you on that point. So Vic talk my last job Viki I ever saw it sounds crazy, but Sheila point. Please go ahead.
Speaker Change: Thank you, Zoelle, and good afternoon everyone on the call.
Speaker Change: Thank you Joanne.
Speaker Change: And good afternoon, everyone on the call.
Speaker Change: Welcome to Transcontinental Class, first quarter of fiscal 2025 earnings call.
Speaker Change: When it comes to cough cold snap as the first quarter of fiscal 2025 earnings call before.
Speaker Change: Before we begin, please note that you can find on our website at www.tc.tc our quarterly report, including financial statements and related notes, as well as the slides supporting management's remarks.
Speaker Change: Before we begin please note that you can find on our website at www Dot TCR T or importantly report, including financial statements and related notes as well as the slides supporting managements remarks.
Speaker Change: A reply of this conference call will also be available on our website, short the after the call.
Speaker Change: A replay of this conference call will also be available on our website shortly after the call.
Speaker Change: Please note that this conference call is intended for the financial community.
Speaker Change: Please note that this conference call is intended for the financial community.
Speaker Change: Media are in nish and only mode and should contact Nathalie Sancia, Senior Advisor, Corporate Communication, for more information.
Speaker Change: I mean, you are in listen only mode and should contact them. After they finish off senior advisor corporate thing Acacia for more information.
Tom Mammography: We have with us today our President and Chief Executive Officer, Thomas Morin, and our Executive Vice President and Chief Financial Officer, Donald LeCavalier.
Tom Mammography: We have with US today are president and Chief Executive Officer, Tom Mammography, and our executive Vice President and Chief Financial Officer, they're not into Quebec.
Speaker Change: Thank you.
Speaker Change: As referenced on slide two, some of the financial measures discussed over the course of this conference call are non-IFR.
Speaker Change: As referenced on slide two some of the financial measures discussed over the course of this conference call are non ifr it.
Speaker Change: We can refer to the NDNA for a complete definition and reconciliation of these measures to liafire. [inaudible]
Speaker Change: You can refer to the MD&A for a complete definition and reconciliation of these measures play a part in it.
Speaker Change: In addition, this conference called my also contained forward-looking statement.
Speaker Change: This conference call May also contain forward looking statements.
Speaker Change: statements are based on the current expectations of management and information available as of today. In our outlook, does not include the impact of potential tariffs on our operate.
Speaker Change: These statements are based on the current expectations of management and information available as of today.
Speaker Change: Our outlook does not include the impact of potential tariffs on our operations.
Speaker Change: Ford-looking statements also involve numerous risks and uncertainties, known and unknown.
Speaker Change: Forward looking statements also involve numerous risks and uncertainties known and unknown.
Speaker Change: The risks, uncertainties, and other factors that could influence actual results are described in the fiscal 2024 annual MDMA and in the latest annual information form.
Speaker Change: The risks uncertainties and other factors that could influence actual results are described in the fiscal 'twenty 'twenty four annual MD&A and the fifth annual information form.
Speaker Change: With that, I would like to turn the call over to our presence and CEO , Hamir Morin.
Speaker Change: With that I would like to turn the call over to our President and CEO Tom O'malley.
Speaker Change: Thank you and thank you Yan, good afternoon to everyone. The results for this quarter continue to demonstrate the positive effects of our program.
Speaker Change: Thank you.
Speaker Change: Good afternoon to everyone. The results for this quarter continued to demonstrate the positive effects of our program to improve our profitability and financial position.
Speaker Change: Profitability and financial
Speaker Change: I work to reduce the cost of good salt as well as...
Speaker Change: Our work to reduce their cost of goods sold as well as fixed costs and to turning around underperforming plants continues across the organization.
Speaker Change: Transcription by the Amara.org community
Speaker Change: Turning to the packaging sector. We've seen an organic decrease in revenues mainly due to the slow activities in our Latin American operations due to a first-mile.
Speaker Change: Turning to the packaging sector, we've seen an organic decrease in revenues, mainly due to the slower.
Speaker Change: American operations due to adverse market conditions and continued weakness in medical however, our cross sell efforts combined with a favorable mix with significant growth and Chisholm there enabled us to maintain profitability.
Speaker Change: However, the east coast.
Speaker Change: Combined with two of several necks with significant growth inches and there, Enable dust to maintain...
Speaker Change: In everything, services and printings.
Speaker Change: In our retail services and printing sector, we recorded an increase in profit for the third quarter and this I'm proud to say despite the impact of the Canada post labor.
Speaker Change: We recorded an increase in profit for the third consecutive quarter, and this, I'm proud to say, despite the impact of the Canada post-labor conflict, so kudos.
Speaker Change: So kudos to the team.
Speaker Change: Increased printing and specialized solutions.
Speaker Change: Contributed to this.
Speaker Change: Okay.
Speaker Change: The sale of our industrial packaging business and the strong profitability in the quarter have enabled us to reduce our net debt ratio to its lowest level.
Speaker Change: The sale of our industrial packaging business and the strong profitability in the quarter have enabled us to reduce our net debt ratio to its lowest since the acquisition of covers a marriage of 2009.
Speaker Change: The Acquisition of Coverage.
Speaker Change: Great.
Speaker Change: Meanwhile, we continue to work on our...
Speaker Change: Meanwhile, we continue to work on the acquisition pipeline.
Speaker Change: Let me now address the question of terror. [inaudible]
Speaker Change: Let me now address your question of tariffs as I mentioned on our last call. Our cross border exposure is limited to approximately 10% of our combined packaging and retail services.
Speaker Change: As I mentioned on our last call, across border exposure is limited to approximately 10% of our combined packaging and retail
Speaker Change: Out of that 10%, we have the confirmation that our book exports from Canada to the United States are...
Speaker Change: I don't know, 10% without the confirmation that our books exports from Canada to the United States Alright Center.
Speaker Change: Based with the search of olatide situation, we are focused on what we can [inaudible]
Speaker Change: Faced with such a volatile situation, where I focus on what we can control.
Speaker Change: First, we're looking at a number of mitigates.
Speaker Change: First we're looking at a number of mitigating measures that tends to initiatives to reduce.
Speaker Change: of Tarris, considering we caught him.
Speaker Change: In fact, those towers, considering we can't say anything.
Speaker Change: Thanks.
Speaker Change: We're having conversations with our customers and suppliers to see what can [inaudible]
Speaker Change: We're having conversations with our customers and suppliers to see what can be done.
Speaker Change: We also prepared, we also prepared to leverage our footprint on both sides of the Canada-USBOR relationship.
Speaker Change: We're also prepared we're also prepared to leverage our footprint on both sides of the Canada U S border relatively quickly.
Speaker Change: Taken in this assert...
Speaker Change: Taken in this uncertain context, we redouble our efforts on the execution of our priorities as well as on the year two of our programs.
Speaker Change: We will redouble efforts on the execution of our priorities, as well as on the year two of our program to improve profitability and finance.
Speaker Change: And our financial position.
Speaker Change: We will continue to increase our capacities.
Speaker Change: We will continue to increase our parts of it.
Speaker Change: News Inc. and the operational.
Speaker Change: Improvements in operational efficiency.
Speaker Change: And as always, be agile and react quickly.
Speaker Change: <unk> costs and as always be agile and react quickly to any new developments.
Speaker Change: Lastly, the loss of the value of the Canadian dollar versus the U.S. dollar will provide.
Speaker Change: Lastly, the last of the value of the Canadian dollar versus the U S. Dollar we provide some reasons.
Speaker Change: We've done a great job in 2020 for it to become more competitive in their marketplace.
Speaker Change: We will continue on that path in 2025.
Speaker Change: For sure we will continue on that path in 2025.
Speaker Change: Let me just pass it over to Europe.
Speaker Change: Thank you, Thomas, and good afternoon, everyone. Moving to slide five of the earnings call presentation.
Speaker Change: Thank you Thomas and good afternoon, everyone moving to slide five of the earnings call presentation.
Speaker Change: For the first quarter of 2025, we reported a 5.5% decrease in revenues versus the same quarter last year.
Speaker Change: For the first quarter of 2025, we reported a five 5% decrease in revenues versus the same quarter last year.
Speaker Change: This decline was caused by lower volume and by the sale of our industrial packaging activities, partially upset by a positive exchange rate impact.
Speaker Change: This decline was caused by lower volume and by the sale of our industrial packaging packaging activities, partially offset by a positive exchange rate impact.
Speaker Change: Regarding profitability, we deliver a strong quarter with consolidated as just a bit of $97.5 million.
Speaker Change: Regarding profitability, we delivered a strong quarter with consolidated adjusted EBITDA of $97 $5 million.
Speaker Change: Just a bit though, grew by $1.4 million, despite the negative impact of the labor conflict at Canada
Speaker Change: EBITDA grew by $1 $4 billion, despite the negative impact of the labor cost flake I'd tell her that bowls and the sale of our industrial packaging activities.
Speaker Change: Financial expense, decreased by $4.6 million, to $9.3 million.
Speaker Change: Financial expense decreased by $4 6 million to $9 $3 million, mainly due to a lower debt level. Following strong cash flow generation in the last 12 months and from the lower interest rates on floating rate debt.
Speaker Change: Mainly due to a lower debt level following strong cash low generation in the last one months, and from the lower interest rates on floating rate debt.
Speaker Change: Adjusted income tax increased by 1.2 million to 8.7 million and represented an effective
Speaker Change: Adjusted income tax increased by $1 2 million to $8 7 million and represented an effective.
Speaker Change: Rates of 17.3%.
Speaker Change: Rate of 17, 3%.
Speaker Change: This led to an adjusted earnings per share improvement of 14 percent, going from 43 cents in Q1 last year to 49 cents and Q1 this
Speaker Change: This led to an adjusted earnings per share improvement of 14% going from 43 cents in Q1 last year to 49 in Q1 this year.
Speaker Change: Now moving to slide 6 for the sector review.
Speaker Change: Now moving to slide six for this sector review.
Speaker Change: Packaging, for the first quarter, we generated revenue of $389.4 million, at 2.2% decrease compared to last year.
Speaker Change: And packaging for the first quarter, we generated revenue of $389 $4 million at two 2% per cent decrease compared to last year.
Speaker Change: The decrease is mainly due to the sale of our initial packaging activities and to lower volume, notably in our lifetime activities and in the medical market where we continue to see some weakness.
Speaker Change: The decrease is mainly due to the sale of our this short packaging activities and to a lower volume, notably in our lifetime activities and in the medical market, where we continue to see some weakness.
Speaker Change: In terms of profitability, adjusted of it down packaging decreased by 2.3% to $59 million, mainly as a result of the sale of our industrial packaging activity.
Speaker Change: In terms of profitability adjusted EBITDA packaging decreased by two 2% to $59 million, mainly as a result of the sale of our industrial packaging activities.
Speaker Change: Despite the lower value, we maintain 15.2% of the margin, as we continue to see the benefits from our class reduction if-
Speaker Change: Despite the lower volume, we maintained a 15, 2% EBITDA margin as we continue to see the benefits from our cost reduction efforts.
Speaker Change: Let's move on to sales services and the spring sector on list 7.
Speaker Change: Moving to retail services, our printing sector on slide seven.
Speaker Change: The revenue decreased by 9.2% to 240.7 million.
Speaker Change: Revenues decreased by nine 2% to $247 million.
Speaker Change: This was mainly due to lower volume in our traditional printing activities, including the transition to radar and the labor conflict at Canada Post.
Speaker Change: This was this was mainly due to lower volume than our traditional printing activities, including the transition to a radar and the labor I'll take care of the Pope's.
Speaker Change: The decline was, however, partially mitigated by an increase in our book printing and specialty solutions activity.
Speaker Change: The decline was however, partially mitigated by an increase in our book printing and specialty solutions activities.
Speaker Change: Adjusted a bit that grew by 6.1% to $41.9 million dollars.
Speaker Change: Adjusted EBITDA grew by six 1% to $41 $9 million.
Speaker Change: This is the third consecutive quarter of profitability improvement for the sector.
Speaker Change: This is the third consecutive quarter of profitability improvement for the sector and we achieved this strong performance. Despite the negative impact from the labor hopefully candidate boats.
Speaker Change: And we achieved this strong performance despite the negative impact from the labor conflict at Canada
Speaker Change: There was also three million of expenses related to the labor conflict at Canada Falls that was put in other costs excluded from adjusted adaptor.
Speaker Change: There was also a $3 million of expenses related to the labor toxic I cannot oppose the Westport and other costs excluded from adjusted EBITDA.
Speaker Change: The strong performance came in large part from a combination of our cast reduction initiative, the optimization of our manufacturing network, the favorable effect of the rollout of radar and growth in our book printing activity.
Speaker Change: This strong performance came in large part from a combination of our cost reduction initiatives the optimization of our manufacturing network. The favorable effect of the rollout of radar and growth in our book printing activities.
Speaker Change: We expect a tougher comparable in the second half of the year, a Sintikin class reduction happened during the second quarter last year with the closure of our Sencia St. Plant and the transition to radar across the province of Quebec.
Speaker Change: We expect a tougher comparable in the second half of the year are simply getting cost reductions I've been during the second quarter last year with the closure of our St. Joseph plant and the transition to radar across the province of Quebec.
Speaker Change: Now, learning to cashflow, as expected, and in line with normal seasonality, we saw negative working gap in the first quarter of 2025.
Speaker Change: Now turning to cash flow as expected and in line with normal seasonality, we saw negative working cap in the first quarter of 2025.
Speaker Change: Despite almost 60 million in working capital usage, we generated $23.6 million from operating
Speaker Change: Despite almost $60 million and working capital usage, we generated $23 $6 million from operating activities are.
Speaker Change: Our Catholics at $22.1 million were 14.5 million lower than last year.
Speaker Change: Our capex.
Speaker Change: $22 $1 million were $14 5 million lower than last year.
Speaker Change: While we allocate at $16.3 million and share buybacks in the quarter helped by the sale of our industrial packaging activities, we continue to reduce our net debt and improve our net debt ratio to 1.53 times at the end of the first quarter of fiscal 2025, compared to 171 times three months ago. [inaudible]
Speaker Change: While we allocate at $16 $3 million in share buybacks in the quarter helped by the sale of our industrial packaging activities. We continue to reduce our net debt and improve our net debt ratio to 153 times at the end of the first quarter of fiscal 2025 compared to 171 times three months ago.
Speaker Change: Overall, we're pleased with our results in the first quarter, and excluding the potential impacts from terrorists, we remain confident in our help.
Speaker Change: Overall, we're pleased with our results in the first quarter and excluding the potential impact from tariffs we remain confident in our outlook.
Speaker Change: In our packaging sector, we continue to expect to see volume and profit growth in fiscal 2025.
Speaker Change: And our packaging sector, we continue to expect to see volume and profit growth in fiscal 2025.
Speaker Change: This growth should be more weighted in the second half of the year, as we expect Q2 to be a challenging quarter giving our solid Q2 last year.
Speaker Change: This growth should be more weighted in the second half of the year as we expect Q2 to be a challenging quarter, giving our solid Q2 last year.
Speaker Change: This has been said, we expect a recurring Latin America and medical as well as a better performance over all versus last year in the sake of our fiscal year.
Speaker Change: This has been said, we expect a recovery in Latin America, and medical as well as a better performance overall versus last year and just to kick off our fiscal year.
Speaker Change: In our retail services and printing sector, despite the impact of the labor conflict at Canada post that hit our first quarter results, we continue expecting to deliver a stable adjusted at that in fiscal 2025 compared to 2024.
Speaker Change: In our retail services, our printing sector. Despite the impact of the labor conflict cannot oppose that hit our first quarter results. We continue expecting to deliver a stable adjusted EBITDA in fiscal 2025 compared to 2024.
Speaker Change: On Tyress, the situation is evolving and we are working on initiatives to mitigate the potential impact on our results.
Speaker Change: On tariffs the situation is evolving and we are working on initiatives to mitigate the potential impact on our results.
Speaker Change: While the terrorists create uncertainty, our financial position is very strong with a net debt ratio of 1.50 p.m.
Speaker Change: While the <unk> gyrus create uncertainty our financial position is very strong with a net debt ratio of 153 times.
Speaker Change: We also expect to generate strong operating cash flows in the rest of the year, in addition to the monetization of real estate, where we continue to expect to close a set of two buildings in fiscal 2025.
Speaker Change: We also expect to generate strong operating cash flows and the rest of the year. In addition to the monetization of real estate, where we continue to expect to close the sale of two buildings in fiscal 2025.
Speaker Change: For these reasons, we are in good position to return capital to shareholders, including a special donated $1 per share.
Speaker Change: For these reasons, we are in good position to return capital to shareholders, including a special dividend of $1 per share.
Speaker Change: On that note, we will not proceed with the question period.
Speaker Change: On that note. We will now proceed with the question period.
Speaker Change: [laughter].
Speaker Change: Thank you, ladies and gentlemen, we will now proceed to the question-and-answer session. If you have a question, please press the star key followed by 1 on your keypad. A tone will be heard confirming your request. Questions will be taken in the order they are received.
Speaker Change: Now she made that may miss urine sediment not pursued that at patheon the kestrel ethos.
Speaker Change: Question for you have to use to live tissue to Suvs.
Speaker Change: So let's go to Frank <unk>.
Speaker Change: And Tonight to surface.
Nicholas Joseph: It comes from other demand Nicholas Joseph I'll. Please don't look at Aha is he as chairman.
Nicholas Joseph: Thank you. One moment, please. Ladies and gentlemen, we will now begin the question-and-answer session. If you have a question, please press star. Follow the one on your touch-tone phone. You will hear tone-and-rallaging your request. Your questions will be pulled in the order they are received. Please ensure you lift the headset if you are using a speaker phone before pressing any keys. One moment, please for your first question.
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Nicholas Joseph: The keys to lead two ish and then less of a cure.
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Speaker Change: One moment, please ladies and gentlemen, we will now begin we will now begin the question and answer session. If you have a question. Please press star followed by the one on your Touchtone phone you will hear a tone acknowledging your request you.
Speaker Change: Questions will be pulled in the order. They are received please ensure you lift the handset if you're using a speaker phone before pressing any keys one moment. Please for your first question.
Speaker Change: Let's have a minute in question, the Emil Patel, the CIBC Capital Market. Your first question comes from Emil Patel with CIBC Capital Market.
Speaker Change: And then just John Danielle Patel CIBC capital markets. Your first question comes from Amir Patel with CIBC capital markets.
Speaker Change: Hi, good afternoon.
Amir Patel: Hi, good afternoon.
Speaker Change: Thomas, the 2% organic decline in packaging in Q1, how much of that was price versus volume, and how do you see volumes trending over the balances?
Speaker Change: Tim I see a 2% organic decline in packaging in Q1, how much of that was price versus volume and how do you see volumes trending over the balance of the year.
Speaker Change: Price was about and good afternoon. Price was about one.
Speaker Change: Our price was a beverage and good afternoon price was about 1%.
Speaker Change: I'll focus on two things that cause this reduction in the top line in Q1 and I think Donald, you gave
Speaker Change: Yes.
Speaker Change: Our focus on two things that caused that caused this reduction in the topline and it seems you are not asking Donald you gave us already some color.
Speaker Change: in color. First is Latin. So we believe Latin is a temporary reduction and there are three reasons in Latin. There is a drive in Mexico. There is probably most of you know some energy shortages in Ecuador. And the Columbia episode has devaluated 10%. So these were the three reasons why we went backwards and in Latin which
Speaker Change: First is let them. So we believe Latam is a temporary reduction in there are three reasons in Latam. There was there is a drought in Mexico.
Speaker Change: There is probably most of you know some energy shortages in Ecuador, and Colombia peso.
Speaker Change: The value added 10%. So these are the three reasons why.
Speaker Change: We went backwards in Latam, which has some impact.
Speaker Change: The second, as we also mentioned,
Speaker Change: The second as we also mentioned is medical and <unk>.
Speaker Change: In medical, we had a local in cells. The one thing I would say is we have a good pipeline of opportunities coming from existing customers, as well as new customers and new products. And we have a pretty strong backlog as we speak. So we have confidence, as Donald said, for the rest of us.
Speaker Change: Medical we have the low quarter in sales to one thing I would say is we have a good pipeline of opportunities coming from from existing customers as well as new customers and new products and we have a pretty strong backlog as we speak. So we are confident as Donald said for the rest of the year for these two segments, which goes to.
Speaker Change: For these two segments which cost the majority. [inaudible]
Speaker Change: The majority of the volume decline.
Speaker Change: Great. Thanks. That's helpful. And just on the non-core asset side, I believe you mentioned that there were two buildings that you are targeting to sell this fiscal year. Could you just remind us what sort of the remaining or expected proceeds would be from those?
Speaker Change: Okay, great. Thanks, that's helpful and just on the noncore asset side I believe you mentioned that there were two buildings that you're targeting to sell this service.
Speaker Change: Fiscal year.
Speaker Change: Could you just remind us what's sort of the remaining our expected proceeds would be from from those two.
Speaker Change: Well, if you go back to when we announced the program, we estimated that we will be probably having an estimate of $100 million. So far, we conclude for $20 million, and I will say that the two building that we expect to close this year represents a large part of what's remaining.
Speaker Change: Well if you go back to when we announced the program. We estimated that we will be probably having an estimate proceeds of $100 million. So.
Speaker Change: So far we conclude for 'twenty millions and I will say that the two building to building that we expect to close this year represent represent a large part of what's remaining so you can establish.
Speaker Change: You can establish.
Speaker Change: So, why are we doing 60 and 80?
Speaker Change: Somewhere between 60 and $80 million.
Speaker Change: Great, that's all I had for now, I'll turn it over.
Speaker Change: Okay great.
Speaker Change: That's all I had for now I'll turn it over thanks.
Speaker Change: Okay.
Speaker Change: The next question comes from Adam Shine with National Bank Financial.
Speaker Change: A question I guess, Joe will be under Adam Shine of Havoc National Bank Financial. Your next question comes from Adam Shine with National Bank financial.
Speaker Change: Thanks a lot, good afternoon. Tomah, maybe just with respect to flyers, obviously concerns out there that we could see a recession brewing. We'll see how that whole tariff dynamic ultimately plays out. Usually flyers can resonate well in that type of environment. Are you seeing any changes in the behavior of any of your customers quite yet? Do you expect anything? How's the Q2 evolving so far with flyers?
Speaker Change: Thanks, a lot good afternoon, maybe just with respect to fliers.
Speaker Change: Obviously concerns out there that we could see.
Speaker Change: Recession brewing, we will see how that whole tariff dynamic ultimately plays out usually.
Speaker Change: Flyers can resonate well in that type of environment are you seeing any changes in the behavior of any of your customers quite yet do you expect that evening.
Speaker Change: How does the Q2 evolving so far with fliers.
Speaker Change: And thank you Adam for the question, good afternoon. You're right in saying that flyers are a good tool in case of high inflation or recession for consumers. So we haven't yet seen an uptick to answer straight forward your question, but indeed you're right.
Speaker Change: Thank you Adam for your question and good afternoon.
Speaker Change: You are right in saying that suppliers are a good tool in case of a high end traditional recessions tour for consumers. So we haven't yet seen.
Speaker Change: <unk> to answer straightforward your question, but indeed, you are right. We would expect this to happen should there should a recession artificially high grades highbridge materialize I would say that it's something we've experienced in the past so youre, writing things yet we havent seen in North Dakota.
Speaker Change: Yet we have a-
Speaker Change: Okay, anything to note on the evolving transition to Radar, just in terms of any additional distribution opportunities and perhaps, you know, just acknowledging that some of the pressure over the past year at the top line, you know, has been exacerbated as, you know, you move through that transition from Pobyseth to Radar. Are we getting closer to a lapping of that top line pressure? Or do you see that for another, you know, maybe quarter or two?
Speaker Change: Anything to note on the evolving transition to radar just in terms of any additional distribution opportunities and perhaps just technology that some of the pressure over the past year at the top line has feet exacerbated as you move through that transition.
Speaker Change: <unk> SaaS to radar or are we getting closer to a lapping of <unk>.
Speaker Change: That top line pressure or do you see that for another quarter or two.
Speaker Change: I think it's difficult to predict what I'd say on this, Adam, and the key message here is post the labor issue at Canada Post We've seen the work.
Speaker Change: Well.
Speaker Change: I think it's difficult to predict what I'd say on this item and the key message here is.
Speaker Change: Post the labor issue with Canada post we've seen their volume coming back in.
Speaker Change: Questions & Answers
Speaker Change: So one thing was the right thing to support the product during the strike, which we did very well our customers are extremely thankful for that and we saw very.
Speaker Change: for that, and we saw very much, very quickly after the strike, volume's coming back to us.
Speaker Change: Very much.
Speaker Change: Very quickly after the strike.
Speaker Change: So coming back to the normal that's normal levels, we will see you will see moving forward it should be there.
Speaker Change: and the models. We'll see here, which...
Speaker Change: Thanks.
Speaker Change: Adam, if I can add, you 2nd quarter will be the last quarter where we were last till last year using the exact four large part of Quebec, most of Quebec except Montreal, and also we were using the plant in St. Justine. So starting in the 3rd quarter it should be more
Speaker Change: I don't know if I can add.
Speaker Change: You second quarter will be the last quarter, where we were last till last year using <unk> for a large part of Quebec.
Speaker Change: Most of Quebec, except Montreal and also we were using the plant at Sanchez signs so starting in the third quarter it should be more harmful to Apple sure.
Speaker Change: Exactly. And just maybe one more thing just on the packaging side. I know you talked about some better results expected in the second half of the year. But I think, you know, in the last quarter, as you closed out fiscal 2024, there was a suggestion that, you know, the market in medical was perhaps stabilizing a little bit. So was there something that happened Q1 to sort of reverse course a little bit there or was the comment maybe just a bit optimistic perhaps premature back in December ? Well, when we were talking in December , we already had a lot of view on the backlog, Adam. So Adam, the backlog's been strong and it's the speed at which we can...
Speaker Change: Exactly and just maybe one more just on the packaging side.
Speaker Change: You talked about so some better results expected in the second half of the year, but I think.
Speaker Change: In the last quarter as you closed out fiscal 2024, there was a suggestion that the.
Speaker Change: Marketing medical was perhaps stabilizing a little bit so was there something that happened in Q1 to sort of reversed course, a little bit there or was the comment may be just a bit.
Speaker Change: Two distinct perhaps premature back in December.
Speaker Change: When we were talking in December we already had a view on their backlog of items. So the backdrop has been strong.
Speaker Change: <unk>, which we can we can materialize our manufacture.
Speaker Change: Thank you very much.
Speaker Change: The backlog so nothing has really changed it took a bit longer so the signs are positive as we speak.
Speaker Change: Perfect, thank you for that, appreciate it.
Speaker Change: Perfect. Thank you for that I appreciate it.
Speaker Change: The next question comes from Sean Stewart with T.D. Cowan.
That question comes Joe Randell, Sean Stewart of TD Cowen. Your next question comes from Sean Stewart with TD Cat one.
Speaker Change: Thank you. Good afternoon, everyone. Wanted to come back to Terrace. I would guess it's quite small, but the book exports that are exempt from Terrace. You give us a sense of the scale relative to the 10% of the combined company sales that are exposed potentially to Terrace. What that would constitute. Thank you.
Speaker Change: Thank you and good afternoon, everyone.
Speaker Change: I wanted to come back to tariffs.
Speaker Change: I would guess, it's quite small, but the book exports that are exempt from tariffs can you give us a sense of the scale relative to the 10% of the combined company sales that are exposed potentially the tariffs what that would constitute.
Speaker Change: What we said is we have roughly 10% both in both sectors that expose to either most of the U.S. to Canada, but some of it also Canada to the U.S. on packaging, and I will say that the retail servicing and printing represent less than 40% of that impact and a major part of it is either book or information material. [inaudible]
Speaker Change: What we said is we have roughly 10% both in both sectors that are exposed to either most of the U S and Canada, but some of it also Canada U S packaging.
Speaker Change: I will state that the retail servicing and breadth being represented.
Speaker Change: That's up 40% of that impact and the major part of it.
Speaker Change: Book or information materials. So.
Speaker Change: Transcription by SousTitreurs.com
Speaker Change: Yes, this extensive finish in crude.
Speaker Change: Right? Also what we sailed from the United States. [inaudible]
Speaker Change: You said it right also what <unk> sales from the United guidance.
Speaker Change: Combined.
Speaker Change: Okay, thanks for that. And then just a question on the returns to shareholders and the thinking around the special dividend and the rationale for that choice versus faster buybacks and your company is pretty consistently increased the right of a dividend as well, how we should think about the special dividend versus
Speaker Change: Okay. Thanks for that and then just a question on the the returns to shareholders.
Speaker Change: And the thinking around the special dividend.
And the rationale for that choice versus faster buybacks and your company has pretty consistently increase the regular dividend as well.
Speaker Change: How we should think about the special dividend versus.
Speaker Change: on going increases to the regular dividend going forward.
Speaker Change: Ongoing increases to the regular dividend going forward.
Speaker Change: Well, you know, we look at it as first the good news is now we are in a position with our strong balance sheet back in June last year we were confident enough to announce the HCIB program of which
Speaker Change: Well, we look at it.
Speaker Change: First the good news is now we are in a position with a strong balance sheet back in June last year, we were confident enough to announce the CIB program of which we we bought back close to $50 million a share and now we're announcing the special dividend following a good transaction for us where we cash north of 100.
Speaker Change: We bought back close to 50 million of shares, and now we're announcing this special development following a good transaction for us, where we cashed $130 million, so we thought that the special development was another way to return capital to investors, and if you look globally over the last year, we said it earlier today, we returned $125 million, and again, this fiscal year will be an important return to investors, so we look at it as a global, and we still have the NCIB in place of which there's about 18% that we can trigger. We won't comment on our action in the future, but we look at it as a total return to our investors.
Speaker Change: $30 million. So we thought that the special dividend was another way to return capital to our investors and if you look globally over the last year. We said it earlier today, we return 125 measured against this fiscal year will be important return to investors. So if we look at it as a global and we still have the NCI view.
Speaker Change: In place of which there is about 18% that we can trigger we won't comment of our action in the future, but we look at it as a total return to our investors.
Speaker Change: Understood. That's all I have for now. Thank you.
Speaker Change: Understood.
Speaker Change: That's all I have for now thank you.
Speaker Change: Yes.
Speaker Change: The next question comes from Mary Yaghi. Your line is now open.
Speaker Change: Next question comes Joe Yeah, Dan Mayer Yaghi of Scotiabank. Your next question comes from Mary <unk> with Scotiabank. Your line is now open.
Mary: Great, thank you for taking my question. I actually wanted to ask you a question on the terrace from an opportunity perspective.
Mary: Great. Thank you for taking my question.
Speaker Change: I actually wanted to ask you a question on the Paris from an opportunity perspective.
Speaker Change: rather than what you could lose because I think some of your peers transport a lot more than you across the border. Is there an opportunity to either. .
Speaker Change: Rather than what you could lose because I think some of your peers.
Speaker Change: Transports a lot more than you.
Speaker Change: Across the board there.
Speaker Change: There are opportunities to either.
Speaker Change: Win Market Chair on either side of the border, given your capabilities, your capacity to produce, both on the printing and the packaging.
Win market share.
In either side on either side of the border given your capabilities.
It could produce.
Speaker Change: Both on the printing and packaging.
Speaker Change: I think it's a good question. We're obviously looking at any opportunity to not only mitigate, as we could share with you, but also potentially take advantage of it.
Speaker Change: I think yes, I think it's a it's a good question, we obviously looking at any opportunity.
Speaker Change: Not only mitigate as where you could share with you, but also potentially take advantage of it.
Speaker Change: The Paris, give it a...
Speaker Change: The tariffs given our footprint.
Speaker Change: Thank you very much. Thank you.
Speaker Change: Certainly for packaging as well as for retail services and printing also considering.
Speaker Change: also considering the lower Canadian down.
The lower Canadian dollar obviously that helps.
Speaker Change: I think it's a long process to make it straightforward, to materialize cells on both.
Speaker Change: I think it's a long process to make it straightforward to materialize.
Speaker Change: On both retail services and printing and packaging it's around process, we're talking about a 12 months ish.
Speaker Change: A 12-month-ish process. Now, can this be fast-forwarded, giving the urgency? Bye, right away.
Speaker Change: <unk> now can these be fast forwarded a given the urgency.
Speaker Change: Alright.
Speaker Change: So, we're actively looking at support.
Speaker Change: So we're actively looking at opportunities of course and the team is engaged in the in capturing some opportunities short term, but thats not expect a very quick win.
Speaker Change: Of course.
Speaker Change: short term, but let's not expect a very...
Speaker Change: Several fixed sometimes you quantified them to go out in two minutes.
Speaker Change: Yes. We can start. We can start.
Speaker Change: Yes.
Speaker Change: Quick answer we're looking at this as well.
Speaker Change: I guess that brings us back to the process of...
Speaker Change: I guess that brings us back to the.
Speaker Change: The process of.
Speaker Change: tariffs and impact on that 10% you mentioned.
Speaker Change: Tariffs and impact on that 10% you mentioned.
Speaker Change: How quickly clients can...
Speaker Change: How quickly.
Speaker Change: Your line scan.
Speaker Change: Turn around and find another local supplier.
Speaker Change: Turnaround.
Speaker Change: Another local supplier.
Speaker Change: for the product that are in question.
Speaker Change: For the products that are in question here.
Speaker Change: IE, if let's say tariffs are implemented in the beginning of April , how quickly do you think that 10% can be affected?
Speaker Change: I E.
Speaker Change: Let's say tariffs are implemented in the beginning of April.
Speaker Change: How quickly you think that 10% can.
Speaker Change: Can be affected.
Speaker Change: Well, the 10% impact is right here. I mean, these tires are happening every one, only for one, there is an impact.
Speaker Change: The 10% and infected right here I mean these tires are up in April one on April one there's a there's an impact that is for sure now the question is more on the mitigation.
Speaker Change: Now, the question is more on the mitigation side of...
Speaker Change: <unk> side of the process, we have a strong supply chain.
Speaker Change: We have a strong supply chain bed based on both sides of the border, so we have a reliable both in Canada and in
Speaker Change: So on both sides of the border. So we have a reliable.
Speaker Change: Both in Canada, and in the United States and we generated.
Speaker Change: Wiz Khalifa
Speaker Change: and both of these supply sources. [inaudible]
Speaker Change: Engage with both of these supply sources.
Speaker Change: For the most part, not for everything, but for the most...
Speaker Change: <unk> solutions for the most part everything but for the most for the most part so a quick.
Speaker Change: So, as quickly as we can, we can engage, we are already engaging with our suppliers.
Speaker Change: Quickly can we can we are engaged we already engaging with our with our suppliers as we speak we've been engaged with them for them for the last two months I would say.
Speaker Change: Trying to find ways in case...
Speaker Change: I'm trying to find ways NK cells, which is where we are today.
Speaker Change: So, the 10% is just, I just want to make sure I get this. The 10% is the final sales that you make.
Speaker Change: So the 10% is just.
Speaker Change: Just wanted to make sure I get.
Speaker Change: The 10% is the final sales that you make.
Speaker Change: that are affected potentially by cross-border tariffs, all right?
Speaker Change: That are affected potentially by cross border tariffs right.
Speaker Change: Alright.
Speaker Change: It's not the input cost. It's not 10% of the input cost. It's 10% of top line. And this is why, you know, the details regarding the input cost came out recently. We're working on it with the military to understand the details. [inaudible]
Speaker Change: Yes, yes, yes, either its not the input cost, it's not 10% of the input cost, it's 10% of top line.
Speaker Change: This is why you know the details regarding the input cost came out recently, we're working on it with <unk> to understand the details and to see where it could affect us but there is there is too much still to understand what will be the potential impact for us in Canada. This is.
Speaker Change: We can see where it could affect us, but there's too much still to understand what will be the potential impact for us in Canada. This is why there's a lot of volatility in this market right now, so art for us to see this is the impact. [inaudible]
Speaker Change: Why there is a lot of volatility in this market right now so hard for us to see this is the impact.
Speaker Change: Yeah, no, I mean, I think every day you wake up with a different answer. So maybe one last question, and that's related to the special dividend. In the context of a possible recession, either both in the US or in Canada. And, and you know, a weakening dollar, et cetera. Even with that, you still felt your balance sheet is strong enough to support a special dividend. Can you maybe talk a little bit about the, you know, that view that you have that got you to decide to pay the dividend now, instead of waiting a couple of months to see what tariffs could mean to the economy.
Speaker Change: Yes.
Speaker Change: I mean, I think every day, you wake up with a different answer.
Speaker Change: So maybe one last question and that's related to the.
Speaker Change: The special dividend.
Speaker Change: The context of a.
Speaker Change: A possible recession, either both in the U S or in Canada.
Speaker Change: And and.
Speaker Change: A weakening dollar and et cetera.
Speaker Change: Even with that you still felt your balance sheet is strong enough to support a special dividend.
Speaker Change: Can you maybe talk a little bit about.
Speaker Change: You know that.
Speaker Change: That view that you have that.
Speaker Change: Got you to decide to pay the dividend now instead of waiting a couple of months.
Speaker Change: See.
Speaker Change: What.
Speaker Change: Paris could mean to the economy.
Speaker Change: Well. First of all, you mentioned accuracy and US dollars. There are many different aspects, but I would say first that the US dollars, being at 1.45, well, 1.44, 1.45, are very positive for us. In fact, you can see it in our door, in our first quarter, the impact of having a dollar, probably, on average, at 1.40, gave us 2 million more in profits on packaging. So, if it's 1.45, it's important for us. So, that's one thing. Secondly, yes, we have a good turnover. We are at 1.53. If we realize the impact of paying a dividend, we are back to where we were at the beginning of the year, which is around 1.70. So, in general, I will not comment on the impact of the recession, but when we take all these aspects, the Assembly and the government are confident in paying this dividend at the moment, and it is generally in the first quarter where we announce the new color against the dividend 14.
Speaker Change: Well first you did mentioned Todd risk recession.
Speaker Change: So the U S dollar so theres a lot of a.
Speaker Change: A lot of different aspect to lose that but I will say first that the U S dollar being on 145.
Speaker Change: $44 44.
Speaker Change: Is very positive for us actually you get CNR bridge in our first quarter.
Speaker Change: Back of adding $1, probably an average of four at 140 <unk> gave US 2 million more profit on the packaging. So if it's $1 45.
Speaker Change: That's important for us. So that's one thing second thing, yes, we do have a strong balance sheet. We're at $1 53, if we pro forma the impact of paying a dividend we're back where we were at the beginning of this year, which is roughly one <unk>.
Speaker Change: We see that we have a strong forecasted free cash flow as you're aware we have.
Speaker Change: Have limited need in Capex. So we're really confident about the future of our balance sheet.
Speaker Change: Too hard right now to see if the recession, what's the impact, but as Thomas mentioned, usually on the retail services side.
Speaker Change: As a resilient business on the recession and on the packaging side, we're doing packaging for food for retail food. So overall I won't comment on what would be the type of recession, but when we take all of those I expect the board and the management, Wisconsin to pay that dividend right now and it's usually at this first quarter, where we announce.
Speaker Change: The new color versus the dividend for Tc.
Speaker Change: One last question about M&A. There are voices saying that if Canada has tariffs, there could be an increase in M&A in Canada.
Speaker Change: I see maybe.
Maybe sorry, one last question on M&A, because there's there's voices out there saying that.
Speaker Change:
Speaker Change: If we do have Ken.
Speaker Change: Canada has to face certain tariffs that could be.
Speaker Change: Increase in potential M&A within Canada within Canadian firms.
Speaker Change: What's your view on that? Is there a potential for-
Speaker Change: What's your view on that.
Speaker Change: There are potential for.
Speaker Change: increased opportunity to transact in the coming months, months given also your strength and your balance sheets.
Speaker Change: Increased opportunities.
Speaker Change: <unk>.
Speaker Change: In the coming months.
Speaker Change: Given also use trucks that youre strengthening your balance sheet.
Speaker Change: Well, I think we mentioned already the last call that we were...
Speaker Change: Well I think we mentioned already on the last call that we were actively looking at complementing our footprint, notably in Canada.
Speaker Change: Nota Blinke
Speaker Change: And in the ISM segment.
Speaker Change: And in the <unk> segment.
Speaker Change: What I can tell you today is that we don't change our length. And we are actively pursuing in this direction.
Speaker Change: What I can tell you today is that we don't change our plan.
Speaker Change: And we come and we are actively pursuing it.
Speaker Change: The direction.
Speaker Change: Now we also remain opportunistic if there is something of any interest.
Speaker Change: If there is something of any interest, you can laugh at me, or why not.
Speaker Change: Hale wind up for the time being to focus remains executive same as it was three months ago.
Speaker Change: The focus remains exactly the same.
Speaker Change: We have a strategy and an action.
Speaker Change: Have a strategy and an action plan, which has been delivered as we speak.
Speaker Change: Okay. Thank you very much. Thank you.
Speaker Change: Okay. Thank you very much.
Speaker Change: SMA.
Speaker Change: The next question comes from Stephen MacLeod with BMO Capital Markets. Your next question comes from Stephen MacLeod with BMO Capital Mark. This question comes from Stephen MacLeod with BMO Capital Markets.
Speaker Change: That question Joe.
Speaker Change: Stephen Macleod of BMO capital markets. Your next question comes from Stephen Macleod with BMO capital markets.
Speaker Change: Great. Thank you. Good evening, everyone. I just wanted to follow up on a couple of things. One was just with respect to, you know, just the cost savings and the initiatives that you have, you've implemented and we're obviously seeing the benefits of just could you just give us some understanding or some update as to where you stand in terms of, you know, recognizing the full percentage of the expected savings that that you had laid out. Thank you very much.
Speaker Change: Great. Thank you good evening everyone.
Speaker Change: I just wanted to follow up on a couple of things.
Speaker Change: One was just with respect to.
Speaker Change: The cost savings and the and the initiatives that you have.
Speaker Change: You've implemented and we're obviously seeing the benefits of.
Speaker Change: Can you just give us some some understanding or some update as to where you stand in terms of.
Speaker Change: Recognizing the full percentage off of the expected savings that you had laid out.
Speaker Change: Thank you for the question. We said that I think last time that we had achieved 30 million out of 40 million programs, so we still have time to go. That's what I mean.
Speaker Change: Yes. Thank you for the question, we said that last time that we had to achieve I think $30 million.
Speaker Change: 40 million program. So we see that's going to grow that's what I would say in the short short answer yes.
Speaker Change: And as we said, also when we spoke about the outlook for fiscal 25, we expect applying for price pressure to be relatively flat on the packaging size. Obviously, printing is going to a transition, but we were and we remain confident to see growth. So obviously the cost, the cost program will...
Speaker Change: As we said also when we spoke about the outlook for fiscal 'twenty five.
Speaker Change: We expect topline.
Speaker Change: Core price pressure to be relatively flat on the packaging side and obviously the thing is going through a transition, but we were we were and we remain confident to see growth. So obviously the cost.
Speaker Change: US program will be totally we will achieve the remaining $10 million that we're proactive on many other issues too.
Speaker Change: Only we will achieve the remaining 10 million, but we're proactive on many other issues to be even better to achieve more in this body.
Speaker Change: To be even better to achieve more than this $40 million.
Speaker Change: Oh, great. Okay. That's good. Thank you.
Speaker Change: Oh, great. Okay. That's good thank you.
Speaker Change: And then maybe just turning to, you know, that the impact on the retail services and printing business. I mean, do you see a scenario where the long-term run rate on margins in that business is now north of 19 percent. That's right.
Speaker Change: And then maybe just turning to <unk>.
Speaker Change: The impact on the retail services and printing business.
Speaker Change: Do you see a scenario where long.
Speaker Change: The long term run rate on margins in that business is now north of 19%.
Speaker Change: The text is already in English.
Speaker Change: Well if you if you obviously as we said and we're still in transition.
Speaker Change: The full full impact will be at the end of second quarter, but because of using less paper papers a pass through so we always say that roughly paper represent that.
Speaker Change: 50% of the Flyer products with radar, we use we less paper. So just mathematically it help us to have better margins. So I will say that that margin will make over the last 12 months do represent the new base.
Up to us to get to be better.
Speaker Change: Radar can expand across Canada create more fortunate to be even better on the margin side, but we're differently.
Speaker Change: Hi, Glaude with the margin increase that we got in this group for the last five quarter, which is going.
Speaker Change: Going back up.
Speaker Change: Close to 20% margin that we used to have in the back.
Speaker Change: Close to 20% margin that we used to have in the past.
Speaker Change: Yeah. Okay. Okay, great.
Speaker Change: Yes.
Speaker Change: Okay, Okay great.
Speaker Change: Yeah.
Speaker Change: One other question I had was just on the CapEx Outlook for 2025, where you still kind of in that I think it was $120 million range. And then maybe could you just give us some color on how to think about the tax rate for the years as well. [inaudible]
Speaker Change: One other question I had was just on the Capex outlook for 2025 are you still kind of in that.
Speaker Change: It was 101 hundred $20 million range and then maybe could you just give us some color on how to think about the tax rate for the year as well.
Speaker Change: Yes, we're confident with the 120 million. We do have discussion internally and Thomas spoke to it in his opening remarks to maybe use some Cap X to mitigate the impact of the tyrant, and I will say that you might see also movement on the working cap to also protect versus the tyrant impact, but the 120 should...
Speaker Change: Yes, we're confident with the 120 million, we do have discussion internally and Thomas spoke to it in his opening remarks to maybe use some capex to mitigate the impact of the tariff and I will say that you might see also movement on the working cap.
Speaker Change: To also protect versus.
Speaker Change: The tariff impact so, but the one thing you should be.
Speaker Change: The rights, but even though that now at 145, most of our Catholics at the US, but we're working out as a group to maintain at 120, and we'll see for the tax rate, we should be in the same zone as fiscal 2020.
Speaker Change: The right spot, even though thats now at 145, most of our Capex on U S. But we're working hard as a group to maintain at 120 <unk>.
Speaker Change: For the tax rate what should be in the same zone as fiscal 2024.
Speaker Change: Okay, that's that's great. Thanks for the Colorgrass. Appreciate it.
Speaker Change: Okay. That's that's great. Thanks for the color guys I appreciate it.
Speaker Change: Your question comes from Drew McReynolds with RBC. Your next question comes from Drew McReynolds with RBC.
Speaker Change: That's a question question.
Speaker Change: Drew Mcreynolds RBC. Your next question comes from drew Mcreynolds with RBC.
Drew Mcreynolds: Yeah, thanks very much. Good afternoon. A couple of clarifications for me. First on the strike impact. Go now. You referred to, I mean, I missed a three million of strike impacts, not being in either. Is that the right interpretation? I can't recall what you said. Well, it's just that those are expense that we that occur into one that we had to, you know, we put in place to protect our product and to support our clients. We put in place an infrastructure in the first quarter creating distribution and rest of Quebec. And that that that was that came with a cost and we can we can put this cost below the line. And that's the 2.9 million that I refer to. So when you go back to what we said in December say that it should be an impact of seven million. I'll say that today the global impact is crossing that region, including the 2.9 million that we were able to put below the line.
Drew Mcreynolds: Yes, thanks very much good afternoon, a couple of clarifications for me first on the strike impact I know you referred to.
Drew Mcreynolds: I may have missed it $3 million of strike impacts not being EBITDA is that right.
Speaker Change: Interpretation I can't recall, what you said.
Speaker Change: It's just that those are expense that we occur in Q1 that we add to.
Speaker Change: We put in place to protect our product to support our clients we put in place an infrastructure in the first quarter, creating distribution in rest of Quebec.
Speaker Change: That was that came with a cost that we get we can put this costs below the line. That's the $2 9 million that I referred to so when you go back to what we said in December that it should be in the back of $7 million.
Speaker Change: Say that today the global it back it's roughly in that region, including a $2 9 million that we were able to put below the line correct.
Speaker Change: Oh, yeah, that's perfect. And another point of clarification, just back to terrorists, you did mention last quarter, 10% of total revenue was cross-border sales. The language today, did I hear you correct? That's 10% in packaging, 10% in printing, is roughly that exposure? Yeah, thank you for clarifying this, it's 10% combined, so I think that.
Speaker Change: Oh, Okay, yeah that's.
Speaker Change: That's perfect and.
Another point of clarification, just back to Teri.
Speaker Change: You did mention last quarter, 10%.
Speaker Change: Of total revenue with cross border sales.
Speaker Change: The language today did I hear you correct.
Speaker Change: That's 10%.
Speaker Change: In packaging and 10% in printing is roughly that exposure.
Speaker Change: Thank you for clarifying that it's 10% combined so Bob.
Speaker Change: Sure.
Speaker Change: Yeah, okay.
Speaker Change: Okay.
Speaker Change: Thank you.
Speaker Change: Okay, so 10% combined is the exposure, and then within retail services and printing, you said a portion was below 40%, obviously the book printing is the majority. What's what was the below 40%
Speaker Change: Okay. So 10% combined is the exposure and then within retail services and <unk>.
Speaker Change: King.
Speaker Change: You said a portion was below 40%, obviously the footprint against the majority what's what was the below 40%.
Speaker Change: Well, if you take the 10% which is the console number, it's for you.
Speaker Change: Well, if you take the 10%, which is the console numbers for Tc from that 10%, there's about 40% coming from their retail servicing and Brittany.
Speaker Change: From that then percent, there's about 40 percent coming from the retail servicing and print.
Speaker Change: With that amount, a large part of it is what we call information materials that are currently excluded from the tariff.
Speaker Change: And that was that a bomb a large part of it is what we call.
Speaker Change: At formation materials that are currently excluded from the tariffs.
Speaker Change: from Canada to West, which is obviously mainly our book business, but it's also into some other business that we do on retail services services.
Speaker Change: From Canada to the West, which is obviously, mainly our book business, but its also includes some other business that we do on the retail services.
Speaker Change: Okay.
Speaker Change: Okay, thanks for that clarification. And then maybe I'll ask one here on maybe to you, Thomas, on the end market demand within packaging coming out of the last quarter. The obviously alluded to, you know, the volume and pricing put and take and it just seems like out of the gate here, as it pertains to Latin and medical, you just took a little bit longer to kind of get back to where you need to get back to, is there anything else that's kind of changed from your commentary last quarter? Or, you know, do you still see that kind of end market demand improving?
Speaker Change: Okay. Thanks.
Speaker Change: For that clarification, and then <unk>.
Maybe a last one here on maybe to you Tomas on the.
Speaker Change: End market demand within packaging coming out of last quarter.
Speaker Change: You, obviously alluded to.
Speaker Change: The volume and pricing put and take and it just seems like out of the gate here.
Speaker Change: As it pertains to Latam and medical.
Speaker Change: It just took a little bit longer to kind of get back to where you need to get back to you is is there anything else that's kind of changed from your commentary last quarter.
Speaker Change: Or do you still see that kind of end market demand improving.
Speaker Change: There is nothing really material that has changed. A large amount of my comments are driven by our own action.
Speaker Change: Yes.
Speaker Change: There is nothing really material adverse change.
Speaker Change: Our large large amounts of my comments are driven by our own actions I mean, we don't rely that much on the overall market trend in case, its a macro trend.
Speaker Change: We don't rely that much on the overall market trend in case it's a market trend.
Speaker Change: and so are a line of sight on the bike line.
Speaker Change: So our line of sight on their pipeline of opportunities and deals with closed is still the same.
Speaker Change: Got it. Got it. Okay, that's great. Thanks a lot. Thank you.
Speaker Change: Got it got it okay. That's great thanks for that.
Speaker Change: Thank you.
Speaker Change: Ladies and gentlemen, once again, if you have an additional question, please press star 1.
Speaker Change: But that may Miss your carbon flat.
Speaker Change: And cursed Joan <unk>, they used to yeah T select two ish.
Speaker Change: All right.
Speaker Change: If you want to use the functional menu, you can receive it later on. Ladies and gentlemen, there are any additional questions at the time. Please press star followed by the one. As a reminder, if you are using a speaker phone, please have the hands up before pressing any keys. The next question comes from Martin Kim with Cormac Securities. The next question comes from Martin Kim with Cormac Securities.
Speaker Change: So you will see that Fox. So mainly answer you. The question I guess, that's kind of about that useful net tuition, ladies and gentlemen, there are any additional questions. At this time. Please press star followed by the one.
Speaker Change: As a reminder, if you are using a speakerphone. Please lift the handset before pressing any keys.
Chris Jones: Chris Jones.
Martin Kim: Martin Kim I've had Cormack Securities. Your next question comes from Martin Kim with Cormack Securities.
Martin Kim: Well, thank you for taking the question. I just had a short one. Is there any long-term target
Martin Kim: Well, thank you for taking the question.
Speaker Change: Just have a short one.
Speaker Change: Is there any long term target leverage ratio youre looking at.
Speaker Change: for leverage ratio. Yeah. We don't we don't we don't establish target but we do.
Speaker Change: Our leverage ratio yes.
Speaker Change: Well, we don't we don't we don't establish target, but we do.
Speaker Change: You prefer to be under two. That's been historically the case and this is where we always push.
Speaker Change: We do prefer to be out there too.
Speaker Change: That's been historically the case that this is where we always supposed to be obviously, one came up because when we do acquisition. We will definitely go up to like we did in the past, but we're more comfortable to be able to or two this is where we can do like we did in the last 12 months the proactive either.
Speaker Change: Obviously one came, because when we do a position, we will definitely go above two, like we did in the past, but we're more comfortable to be able to do this is where we can do like we did, like in the last one, be proactive, either on NTAB, DELIDEN, or in acquisition. [inaudible]
Speaker Change: In CIB dividend or.
Speaker Change: Acquisition.
Speaker Change: I think, thank you so much.
Speaker Change: Thank you so much.
Speaker Change: In Nisham Prudawa de Castellam, Mr. Lapointe, there are no for the questions at this time.
Speaker Change: Unisom Qdoba the Quechua mission Mr. Le point, there are no further questions at this time.
Speaker Change: So thank you everyone for joining us today on the call and look forward to speaking to you soon.
Speaker Change: Thank you everyone for joining us today on the call and we look forward to speaking to you soon.
Speaker Change: Ladies and Gentlemen, this concludes the conference call for today. Thank you for your participation. You may now hang up. Ladies and Gentlemen, this is the end of the conference call for today. Thank you for participating. Please disconnect your lines.
Speaker Change: I mean that May Miss juices, She told me that pickup that hospitals.
Speaker Change: Cedar Fair.
Nicholas Joseph: Joseph we met not a question ladies and gentlemen. This concludes the conference call for today. Thank you for participating please disconnect your lines.
Speaker Change: Yeah.
Speaker Change: Okay.
Speaker Change: [music].