Q4 2024 Cascades Inc Earnings Call
Yeah.
[music].
It tends to be should be relatively cough at all they're usually soft you know since you're getting them too much to me then get their cash cat. So about the C V. It just doesn't look hoping that this was all three.
Took leading something they love my all my question.
Smith will come up out there.
You do a hunter you've got the casino.
Sylvie: Morning, My name is Sylvie and I will be your conference operator today at this time I would like to welcome everyone to the Cascade fourth quarter 2024 financial results Conference call.
Speaker Change: Note that all lines are currently in listen only mode. After the Speakers' remarks, there will be a question and answer session. I will now pass the call to Jennifer Aitken director of Investor Relations for Gosh, Scott. Please go ahead mistaken.
Speaker Change: Thank you Cindy.
Jennifer Aitken: Everyone and thank you for joining our fourth quarter 2024 conference call.
Jennifer Aitken: He will begin with an overview of our operational and financial results followed by some concluding remarks, after which we will begin the question period.
Today's speakers will be it small president and CEO and Allan Hogg CFO.
Speaker Change: Also joining us for the question period at the end of the call are Sean does it tell this executive Vice President and packaging and as your hometown Gate Executive Vice President tissue.
Before I turn the call over to my colleagues I would like to highlight that certain statements made during this call will discuss historical and forward looking matters.
Speaker Change: Accuracy of these statements are subject to risk factors that could have a material impact on actual results. These risks are listed in our public filings. These.
Speaker Change: These statements the Investor presentation and the press release also include data that are not measures measures of performance under all forest. Please refer to our Q4 2024 investor presentation for details this.
Speaker Change: This presentation, along with our fourth quarter press release can be found in the investors section of our website.
Speaker Change: If you have any questions. Please feel free to contact us after the session I will now turn the call over to I C. E O Simo, who will begin with a review of a Q4 performance it.
Simo: Thank you Jennifer and good morning, everyone.
Simo: Our fourth quarter performance was in line with our expectations sales.
Simo: Sales levels were stable versus Q3, and increased 6% year over year sequentially favorable average selling prices and exchange rate.
Simo: Get softer seasonal volume and a slightly negative sales mix.
Simo: Year over year, selling prices volume and exchange rates were all tailwind in our packaging businesses.
Simo: Consolidated EBITDA of $146 million increased 4% from Q3, mainly reflecting lower raw material costs and our container Board segment.
Simo: Consolidated EBITDA increased 20% due to a stronger contribution from our packaging activities.
Simo: On the raw materials side highlighted on slide five and six.
Simo: The Q4 average index price for OCC decreased 23% from Q3 and was stable year over year.
Simo: Library availability was good with strong season on generation.
Simo: And overall export activity, leading to a 20% per short ton $20 per short ton excuse me a reduction in October and a further five dollar reductions in November and December.
Simo: We don't expect any major change in these market conditions in the coming months the.
Simo: The exception to this would be the potential disruption related to tariffs, which I will touch on later.
Simo: Average fourth quarter index prices for white recycled paper grades decreased 7% from Q3 and 14% from last year.
Simo: The market remained balanced with readily available volumes of fiber is translating into a small decrease in pricing in the quarter.
Simo: We began to see tighter supply in late December on stronger demand from tissue mills conditions that have continued into January which led to a $10 increase recently.
Simo: Pulp prices were lower sequentially down 4% in the case of softwood and 12% for hardwood.
Simo: Year over year prices remain higher up 29% and 20% respectively.
Simo: Market conditions improved in Q4, with an abundant supply of eucalyptus leading to decreases in index prices.
Simo: We expect stable market conditions for these grades in the coming months softwood grades saw more stability in Q4, but continued concern about wood supply support for more present market environment tons are readily available and our mills are well supplied.
Simo: Lumber tariffs imposed in the future may impact Canadian pulp mills, and we're making necessary plans in the event. This occurs.
Turning now to the results of each of our business segments as highlighted on page seven through 12 of the presentation.
Beginning with containerboard containerboard Q4 sales were stable sequentially with ire average selling prices offsetting lower seasonal volumes sequentially shipments decreased 1% from Q3.
Simo: This reflects a 1% decrease in the parent roll side, and a 2% decrease in shipment levels of converted products.
Simo: Converting shipments decreased two 7% in Canada.
Simo: One 7% decrease in the Canadian market U S converting shipments increased three 7% outperforming the one 1% market decrease.
Simo: EBITDA in Q4 was $104 million or 17% on a margin basis.
Simo: This represents a 16, 16% increase from Q3 and is the fourth consecutive EBITDA improvements.
Simo: Our results benefited from lower raw material costs recent market price increases and beneficial exchange rates.
Simo: These benefits were partially offset by lower volumes.
Simo: Year over year sales increased by 9% with benefits from higher selling prices and volumes and more favorable exchange rates offsetting a sales mix impact EBIT.
Simo: EBITDA levels increased 55% from a year ago period.
Simo: Year over year shipments increased by 3% in Q4. This reflects an eight 5% increase in parent roll shipments, reflecting the growing production at the bear Island facility and a one 5% decrease in shipments of converted products.
Simo: Converting shipments decreased by one 5% and Canada below the four 8% increase in the Canadian market U S. Converting shipments decreased one 4% below the 2% U S market decrease.
Simo: Full year 2020 for converting shipments increased three 7% in Canada.
Simo: Below the industry's five 1% in the U S shipments increased by three 6% outperforming the industry, 0.1% increase.
Simo: The specialty product business continue to deliver solid results Q4 sales increased 4% from Q3 on improved selling price sales mix and exchange rate EBITDA was up 4% or 1 million from Q3, driven by higher realized spreads.
Simo: And a margin of 16% remained solid year over year sales increased 9% in Q4 with higher selling prices in certain products stronger volume and a favorable exchange rate driving this growth.
Simo: <unk> grew by 47% or $9 million on higher realized spreads.
Simo: Moving now to our tissue business fourth quarter sales increased 1% sequentially as higher average selling price offset lower seasonal volume.
Converted product shipments decreased 2% in away from home and 1% in the retail market.
Simo: EBITDA of $45 million increased 5% from Q3 and is in line with expectation driven by selling prices and lower raw material costs.
Simo: Sales also increased 1% year over year.
Simo: This reflected favorable exchange rate offset by a slightly negative average selling price shipments were stable year over year on the converting side shipments were stable. The result of a 0.8% increase in retail and a one 9% decrease in away from home.
Simo: The average selling price increased by 1% year over year, reflecting sales mix and the beneficial exchange rate.
Simo: Year over year, EBITDA decreased by $16 million, reflecting mainly the outcome of higher raw material costs.
Simo: Corporate activities contribution was $11 million lower this quarter compared to the third quarter due to an unfavorable exchange rate variation in working capital and treasury items and higher costs related to health insurance for U S employees.
Simo: I'll now pass the call to Allan who will briefly discuss some of the financial highlights.
Allan: Yes, Thank you <unk> and good morning, everyone. So slide 12, and 13 illustrate the specific items recorded during the quarter. The main items that impacted EBITDA were $8 million of restructuring costs and $55 million of impairment charges, resulting from our previous.
Allan: The closed plant in the U S and from a decision to discontinue some production lines in the U S. These.
Allan: These were offset by a net gain of $8 million related to the disposition of assets.
Allan: Slide 14, and 15 illustrate the yogurt <unk> sequential volumes of our Q4 adjusted earnings per share and the reconciliation with the specific items that affected our quarterly results as reported Q4 net loss per share was <unk> 13.
Allan: This compared to a net loss of 57.
Allan: Last year and net earnings per share of <unk> <unk> in Q3.
Allan: On an adjusted basis net earnings per share were <unk> 25 cents in the current quarter. This compared to net earnings per share of <unk> <unk> in last year's results and 2007 in the third quarter of this year Youll.
Allan: Year over year. This variance mainly reflects stronger EBITDA why sequential variance reflects higher EBITDA levels offset by higher depreciation and amortization expense.
Allan: As highlighted on slide 16 fourth quarter adjusted cash flow from operations was.
Allan: 102000, 9 million up from $103 million in the year ago period and from $86 million in Q3.
Allan: Adjusted cash flow generated in the fourth quarter improved year over year, largely reflecting stronger cash flow farm operations and the higher level of capital investments in the year ago period.
Allan: Sequentially adjusted cash flow generated increased.
Allan: With stronger.
Allan: Adjusted cash flow generated increased with stronger cash flow from operations and lower financing expenses paid.
Allan: Slide 17 provides detail about our capital investments new investments for the full year total of $148 million slightly below the previously disclosed forecasted level of approximately $160 million.
Allan: For 2025, we are forecasting approximately $175 million of capital expenditures.
Allan: Moving now to our net debt reconciliation as detailed on slide 18 sequentially, our net debt increased by $57 million in the fourth quarter. This reflects a negative $140 million.
Allan: In fact related to exchange rate.
Allan: These agreements renewal or additions and paid capital investments these were partially offset by positive impacts.
Allan: Cash flow from operations working capital variances and proceeds from the disposal of assets.
Allan: Higher level of net debt and lower EBITDA levels on a full year basis increased leverage to four two times. This compares to four three times at the end of Q3 and three four times at the end of 2023.
Allan: Also note that on January 15, 2025, we repaid our Canadian senior notes coming to maturity with funds funds from our revolving facility.
Allan: Also in January we made some amendments to the delayed draw unsecured term loan facility put in place earlier this year to convert it to a 121 million U S. Dollar facility maturing in December 2026.
Allan: Financial ratios and information about maturities are detailed on slide 21, and other information in that.
Speaker Change: Analysis can be found on slides 23 through 30 of the deck I will now pass the call back to <unk>, who will conclude with some brief comments before we begin the questions.
Speaker Change: Thank you Ireland Cascade has always driven to be transparent a key part of which is included providing a near term financial and operational outlook with our quarterly results. Unfortunately, the high level of continued uncertainty surrounding the macroeconomic and political environment is such that we'll pass this practice.
Speaker Change: For now there.
Speaker Change: The risk of bilateral tariffs being implemented has the potential to have broader implications on the economy and is difficult to predict.
Speaker Change: While we will not be providing business specific details. We believe it's important to convey that we continue to expect that raw material prices will be a tailwind pharma businesses in Q1, and we're currently seeing steady seasonal demand volumes.
Speaker Change: Before opening the call to questions I'd like to elaborate on the potential impact that <unk> may have on our company specifically.
Speaker Change: On the proactive and the proactive measures that we're taking to prepare for their eventual possibility.
Speaker Change: Annually, we would generate approximately 11% of our sales from products, we make in Canada and sell into the U S Cross border intercompany transfers, including raw material used in our operations increased this tariff exposure to roughly 15% of our revenues.
Speaker Change: We've begun to implement a variety of initiatives to mitigate this risk. These.
Speaker Change: These include changes to our raw material sourcing relocating production where possible to minimize the need for cross border trends and implementing commercial strategies with suppliers and our customers.
Speaker Change: In addition to these processes we have in place we are in place to monitor and minimize the potential impacts on our operations will also are actively engaging with governments along with numerous other Canadian companies, we explore ways that Canadian manufacturers can maintain competitive position.
Speaker Change: Notwithstanding the risks associated with the broader economic and political environment, we're sharing our strategic focus areas for the next 24 months on slide 20.
Speaker Change: The first of our three main priorities is to build and solidify our culture of excellence throughout the organization to drive sustainable profitability growth. The second focus area is on improving operational and commercial alignment, which includes optimizing our commercial approach and reinforcing our positioning as a partner of choice.
Speaker Change: Our customers.
Speaker Change: The third and final cornerstone of just 24 months strategy is to prioritize the deployment of the resulting higher free cash flow levels towards debt reduction will.
Speaker Change: We believe that by achieving these objectives over the next 24 months will support the future growth of gas gas and create value for all of our shareholders.
Speaker Change: With that we can now open the call to questions.
Speaker Change: Operator.
Speaker Change: Super Bowl imposing guess steel play Composedly quite CV, so looks like like telephony.
Speaker Change: We'll leave with Chile combo with <unk> Suisse.
Speaker Change: Thank you.
Speaker Change: Like to ask a question. Please press Star then number one on your telephone keypad and if you would like to withdraw from the question queue. Please press Star then the number two again if you have a question. Please press Star then one on your telephone keypad.
Speaker Change: And your first question will be from Nikolaj Globus.
Speaker Change: CIBC capital markets. Please go ahead Nikolai.
Speaker Change: Hi, I hope Youre doing well.
Speaker Change: You saw international paper announced containerboard mill closure do you expect to see any other high cost mills closing, an additional capacity exiting the market going forward.
Speaker Change: Thank you for your question that we will not comment with our competitions are doing but it's.
Speaker Change: It's something that we look at supply and demand all the time and then what we're seeing right now.
Speaker Change: Our order file is steady given the seasonal volumes that.
Speaker Change: Being said the risk of tariffs, we might see some different behaviors, but we're tracking that situation closely.
Speaker Change: Okay, ICSC and <unk>.
Speaker Change: On tariffs and the scenario tariffs are implemented do you see any demand destruction from Canadian customers.
Speaker Change: What do you see as downside to industry shipment volumes.
Speaker Change: But when we look at the.
Speaker Change: Specifically basically like from linerboard medium positioning about two thirds of our war room production is in the U S. But as you mentioned the key risk is really a slowdown of the economy in Canada. So again, it's not material from Canada going to U S. But it's the Canadian economy overall, so that's definitive.
Speaker Change: Something that we're tracking does the slowdown in the economy will mean less shipments every kind of projects, whether it's ship in the U S are within Canada.
Speaker Change: Okay.
Speaker Change: That's it for me.
Speaker Change: Thank you.
Sean Stewart: Next question will be from Sean Stewart of TD Cowen. Please go ahead.
Sean Stewart: Thank you good morning.
Speaker Change: Two questions.
Speaker Change: I want to revisit the tariffs.
Speaker Change: The detail you've given and I'm wondering if you can give a little bit of a nuance of the Canadian.
Speaker Change: Sales exposure to the U S broken down between containerboard tissue and specialty packaging.
And I guess more broadly thoughts on your ability to pass tariffs onto customers and I imagine that with decker across product lines, but any.
Speaker Change: Nuanced commentary you can provide on that front.
Speaker Change: Yes. Thank you for your question.
We've been we've been working on potential tariff since at the four quarter of 2020 for having some more extreme to make sure that not only with 100% understand our exposure, but we are looking at alternatives. So between tissue packaging, we're not going to disclose any.
Speaker Change: Specific information, but it is something that we track and also a variety of.
Speaker Change: Of activities to make sure that we mitigate those those potential impacts.
Speaker Change: Work stream, we have been working for quite a while now.
Speaker Change: So we have a plan when the government of Canada also announced its <unk>.
Speaker Change: This list of projects that would be part of a potential reaction from Canada to the U S.
Speaker Change: So it's something that is changing daily.
Speaker Change: The Devil is in the details, but we have some pretty good action plans to mitigate as much as possible.
Speaker Change: Some of the projects that we manufacturer like tissue basic care projects have a different behavior in.
Speaker Change: Context of tariff, so that <unk> really going to be in the details, but definitely a slowdown in the Kenyan economy.
Speaker Change: Is something that would have an impact on any any companies in Canada.
Speaker Change: Okay, Thanks for that detail.
Speaker Change: Next question there as mentioned in the strategic priorities of noncore asset sales potentially targeting $80 million in proceeds. This year can you give us a sense of what spin.
Speaker Change: Specific assets you are looking at as a part of that program.
Speaker Change: Yes, so without going to specifics because.
Therefore, the sensitivity of some of the assets, we're looking at where we.
Speaker Change: Really looking at non core some of their real estate that we have that is not radio operating so we're not looking at anything that has a significant impact on our operational cash flow generation, but really when you look at the.
Speaker Change: Our portfolio of assets that we have.
Speaker Change: There is a there are areas, where we can monetize some of the asset whether we continue to to operate them in a different pattern is one option, but definitly trying to monetize to reduce our debt level and remember Shaun that we sold assets in tissue last couple of quarters.
Speaker Change: These are part of this target.
Speaker Change: Got it okay.
Speaker Change: Last one for me any updates on bear island ramp up.
Speaker Change: Youre uptime targets being met.
Speaker Change: Any context, you can give us on where we are with respect to operating rates there.
Speaker Change: Yes.
Speaker Change: <unk> when we had the last discussion in the third quarter results. We stated that we had the gaslog, 20% versus where we wanted to be when we look at the month of October and November and December all three months and improvements from previous months with the month of December being roughly like.
Speaker Change: Basically covering off of that gap, so roughly between <unk> 10 and 11%.
Speaker Change: Being said, it's a start up so I expect we'll continue to have some some hiccups, but were fixing stuff and we're fixing them permanently so very pleased with the improvement in Q4.
Speaker Change: The plan is for the end of this year too.
Speaker Change: Meet our production target in 2025.
Speaker Change: Yes, so I guess, that's the update I can I can give you.
Speaker Change: And half the gap.
Speaker Change: At closing half of the 20th gap that doesn't mean.
Speaker Change: Getting to 90% operating rates it means.
Speaker Change: Closing half the gap of where you plan to be at this point is that the right yes exactly.
Speaker Change: Okay, yes, exactly with.
Speaker Change: Our ramp up curve opening throughout 2025.
Speaker Change: Got it.
Okay. That's all I have for now thanks very much.
Speaker Change: Welcome.
Speaker Change: Next question will be from Jonathan Goldman at Scotia Bank. Please go ahead.
Jonathan Goldman: Hi, good morning, and thanks for taking my questions.
Speaker Change: In the release I, just wanted to clarify something in the prepared remarks as well. You noted you are currently seeing steady seasonal demand levels are you, referring to year over year or quarter over quarter levels and is that across all of your segments.
Jonathan Goldman: Well.
Jonathan Goldman: That's basically.
Jonathan Goldman: Year over year from a seasonal standpoint, right because there are some of the demand levels vary depending of the.
Jonathan Goldman: What quarter we're in.
Jonathan Goldman: I mean, the one theres some few exceptions, but overall I mean in packaging.
Jonathan Goldman: As a as a business, we're seeing pretty steady demand levels versus seasonality so from from last year.
Jonathan Goldman: And tissue on the away from home, we see some movement between the away from home and retail which is.
Jonathan Goldman: Very normal at this time of the year.
But overall it is pretty steady.
Jonathan Goldman: Okay interesting you did provide a lot of color around tariffs and potential actions, but have you seen any change customer behavior.
Jonathan Goldman: So far whether thats pulling forward.
Jonathan Goldman: Demand stocking up maybe dialing back demand anything of that relations.
Jonathan Goldman: Yes, it's great question and it's something that their sales teams are looking at on a daily basis second.
Jonathan Goldman: The biggest thing that we see so far.
Jonathan Goldman: Is there a lot of good discussion between our sales team and customers on together finding ways to mitigate any potential impact.
Jonathan Goldman: I mean, it's a potential impact for Cascade, but also.
Jonathan Goldman: I think customers realize that at 25% tariffs will mean that.
Jonathan Goldman: Pricing will be somehow different.
Jonathan Goldman: So theyre looking at actions to mitigate on their part we see whether they can.
Jonathan Goldman: <unk> moved from one place to another and make sure that.
Jonathan Goldman: Our trucks come back for this so there's a lot of discussions about trying to mitigate and there's also a lot of discussions about alternatives outside of the U S.
With the political positioning in the U S that we see it's not just Canada right. So it's other countries as well so we really see customers overall trying to work with us to find some solution to mitigate.
Jonathan Goldman: Interesting.
And maybe if I can squeeze one more in maybe for you Alan on the working capital.
Jonathan Goldman: I think we typically see a bigger release in Q4 than we saw this quarter are there any unusual dynamics, there, maybe specifically around the inventories or receivables.
Jonathan Goldman: No no.
Jonathan Goldman: There was no specific.
Jonathan Goldman: Specific items that comes to mind.
Jonathan Goldman: There was I think inventory flush of inventory are up at the end of the year, we produce well.
Jonathan Goldman: Lets in containerboard in the last couple of weeks of December. So obviously inventory are higher at the end of the year.
Speaker Change: Okay perfect. Thanks for taking my questions.
Speaker Change: Thank you next question will be from Matthew Mackellar at RBC capital markets. Please go ahead.
Matthew Mackellar: Good morning, and thanks for taking my questions.
Matthew Mackellar: I'd like to ask first about your efforts to mitigate the impact of potential tariffs.
Matthew Mackellar: You mentioned changes to raw material sourcing reallocation of production to minimize inter country shipping and adapting our commercial strategies with your customers and suppliers.
Matthew Mackellar: How much of what you mentioned here has already been implemented today versus really just planning and actions.
Matthew Mackellar: Essentially plan to take <unk> tariffs occur.
Matthew Mackellar: And with that how would you estimate.
Matthew Mackellar: Financial impact of those changes you made so far to be on the next couple of quarters.
Matthew Mackellar: Assuming that we ultimately do not see tariffs implemented.
Speaker Change: Yes, great question.
Matthew Mackellar: We're not going to put some numbers.
Matthew Mackellar: <unk> into all of the actions that we're taking as far as implementation, we're not re implementing anything that would have a negative cost.
Matthew Mackellar: Cascade.
Matthew Mackellar: But we're getting ready so that the implementation phase would be as quick as possible understanding that is a threat of tariffs right now and the devil is going to be in the details depending.
Matthew Mackellar: What you read and when you read it.
Matthew Mackellar: The number of products differ so we're taking the worst case scenario to prepare which means all of their projects from Canada to the U S.
Matthew Mackellar: Theyre very specific actions and when we talk about to.
Matthew Mackellar: To give you an example.
Matthew Mackellar: The company is very integrated.
Matthew Mackellar: From the South part of Canada to the North part of the U S with operations in Ontario in the Northern U S. So we part of our day to day logistics is to do some cross border of some items.
Matthew Mackellar: We have ways to mitigate that we were doing that because it was the most efficient way with the actual rules, but if the rules change I mean, there are many things that we can do to mitigate that so we're getting ready for that we're getting ready to make sure that if it means to have some approval of specification.
Matthew Mackellar: We're ready for that but as far as incurring significant additional costs, we're not doing that right now.
Speaker Change: Okay. Thanks for that color.
Next to me just focusing on a couple of items from your strategic priorities.
Speaker Change: Maybe first around profitability.
Speaker Change: What kind of improvements can you ultimately achieve here.
Speaker Change: I mean.
Speaker Change: Activity initiatives, optimizing our logistics and cost structure.
Speaker Change: And if we assume the threat of tariffs stayed away can we.
Speaker Change: Can we quantify what you aim to achieve here and then second question would just be around the recalibration of your product offering.
Speaker Change: Was that a comment on both the packaging and tissue businesses and again, how meaningful could this be for you financially.
Speaker Change: Yes, so I mean, we took the position not to quantify whether we guide for the next quarter or some of the initiative and I am sure you understand because of all of this.
Speaker Change: Unknown in the tariff and the terrorists one thing the impact on global economies in both U S and Canada is probably drives the.
Speaker Change: Cascade not to to put some specific numbers.
Speaker Change: Prior to those tariff discussions I mean, we have internal numbers, we have specific targets to all of their work stream of what we're doing but there's so much unknown in the economy right now that we felt we didn't add much value to just throw a number out there and we're going to wait and see.
Speaker Change: The bilateral discussions and negotiations between both Canada and the U S and when we will feel that the stability is.
Speaker Change: Back in good enough so that our level of comfort with looking ahead is as is acceptable then we'll go back to two guiding I think guiding us there.
Speaker Change: It's a good thing, but right now I mean, there is so I mean, there's so much clouds on this guy.
Speaker Change: Got it.
Speaker Change: Pause on on sharing some of the target, but it doesn't mean that we don't have internal targets.
Speaker Change: As far as product lines that you talked about if you recall last quarter, we we stopped producing some of the skus in the tissue I mean, we're optimizing project offering based on what.
Speaker Change: Customers are looking for making sure that we see.
Speaker Change: Very close to what they need because it does change that at some point.
Speaker Change: So it's both for tissue and packaging.
Speaker Change: And two last part of your question. It is significant enough that it's a big component of our strategy is to optimize the assets that we have.
Speaker Change: To us this is a low capex cost and very fast return. So just to make sure that we organize in a very very efficient way the way we go to market the way, we produce and the way we prioritize our production runs there is enough cash on there to make it a priority for Cascade.
Speaker Change: For the next 24 months.
Speaker Change: Great. Thanks, very much for the help I'll turn it back.
Speaker Change: Thank you next.
Speaker Change: Next question will be from Zachary <unk> with National Bank financial. Please go ahead.
Good morning, everyone and thanks for taking my questions.
Speaker Change: Good morning, good morning.
Speaker Change: Could you give us more color on what's driving the higher corporate costs. Please.
Speaker Change: Yes.
Speaker Change: As Ed mentioned in his comments there was two items during the quarter.
Speaker Change: Exchange rates.
Speaker Change: Loss on that working capital a treasury items at the end of the year. So.
Speaker Change: Everything is centralized and also we take we take all the volumes in corporate and there was additional costs.
Speaker Change: For U S helped.
Speaker Change: <unk> for the our U S employees so.
Speaker Change: Couple of events that happen and unfortunate events. So we had to incur some additional costs.
Speaker Change: In Q4.
Speaker Change: And no contribution from severance or layoffs or anything like that.
Speaker Change: Contribution from severance there was no.
Speaker Change: Couple of severance its all in specific items under restructuring.
Speaker Change: That's helpful. Thanks.
Speaker Change: And then you also mentioned you'll come back to providing short term guidance. Once there is a little more certainty and then geopolitical outlook are you also going to release more specific details on the two year strategic plan.
Speaker Change: Yes, we will for sure that was the initial intent was to share more information that.
Speaker Change: We're sharing today, but again when we get more clarity, we will that will come back to that.
Speaker Change: Thank you and just one last one on the packaging segment unification.
Speaker Change: Can you give us an update on the progress there and when we should expect benefits from cross selling for example.
Speaker Change: We're very satisfied with what we're seeing so far.
Speaker Change: Benefits from.
Speaker Change: All of the reasoning behind putting the two businesses together, we're already seeing some of the results.
Speaker Change: It's something that I think quarter over quarter for the next 24 months, we're going to see more and more.
Speaker Change: We've made some changes to <unk>.
Speaker Change: Some of the teams whether it's in sales in operation as well and.
Speaker Change: Making sure that we're more agile.
Speaker Change: Speed to decision is faster.
Speaker Change: We're really.
Speaker Change: Simplify our business model.
Speaker Change: Very happy with what I see so far and I say that already see some of the benefits.
Speaker Change: That's great. Thank you I'll turn it over.
Speaker Change: Thank you.
Speaker Change: Again, if you would like to ask a question. Please press Star then the number one on your telephone keypad.
Speaker Change: Next question will be from further take probably at the Shanghai. Please go ahead.
Speaker Change: Thank you and good morning.
Speaker Change: Quick question on capacity in tissue, we found that it's approaching 100% in Q4 was 98% just wanted to get your thoughts on potential for increasing that capacity.
Speaker Change: Whether it's from internal efficiency gains are your equipment, how are you thinking about.
Speaker Change: Your demand and capacity to meet that demand in tissue.
Speaker Change: Demand remains as you said the demand is very strong.
Speaker Change: We've repositioned some some asset in converting last year. So we're optimizing those.
Speaker Change: We have specific work stream on the paper machines as well to make sure that the output.
Speaker Change: Continues to improve in.
Speaker Change: It's exactly one of that.
Speaker Change: I'll circle back to our strategies optimizing the assets that we have is that quick payback low capex.
Speaker Change: And you know.
Speaker Change: What you're asking on the tissue business is a good example of that where speeding up improvement of efficiencies getting more out of every equipment. We're in a situation where for many of our project offering.
Speaker Change: The demand is very strong. So every time, we can capitalize and producing more.
Speaker Change: We can sell it and we can send it right away. So it's very positive good outlook gets a basic care product right. So we're going to see some switch between the away from home and retail depending on the economies.
Speaker Change: But I mean, we're producing both so we're making sure that we build some flexibility to switch from one to the other when we can.
Speaker Change: <unk>.
Speaker Change: Having more than usual discussions probably with customers gearing the potential <unk> tariffs. So we're making sure that we stay very close to our partners on that front as well.
Speaker Change: That's great very helpful.
Speaker Change: Apologies if I missed it earlier, but did you comment on your thoughts on.
Speaker Change: Containerboard prices moving forward given the current context that we're in.
Speaker Change: The price increase thats been announced but not yet reflected in the.
Speaker Change: Industry index prices.
Speaker Change: No you didn't miss anything, but I will I will.
Speaker Change: Few comments first I mean, as you know the index coming out tomorrow. So I mean, we'll see what the results are.
Speaker Change: We are heavily based on an index, but we've started to invoice under non indexed shrimp prices some of our customers. So we'll wait and see and we will comment once we see what the.
Speaker Change: Electrification is tomorrow.
Speaker Change: Great. That's all I had thanks for taking the questions.
Speaker Change: Thank you.
Speaker Change: Thank you.
Speaker Change: There are no further questions at this time Mr. <unk>. Please proceed.
Speaker Change: Well. Thank you everyone for taking the time as you know these are at pretty interesting times.
Speaker Change: Given all of the actions between Canada, and the U S and quite honestly the rest of the world. So we're going to continue as a company need to strive for excellence, making sure that we make the best out of what we have and focus on our debt reduction. Thank you for the call.
Speaker Change: My name is I Miss you still are Mr. Alex Xu.
Speaker Change: Thank you ladies and gentlemen, this does conclude your conference call for today you may now disconnect your lines.
Speaker Change: Yes.