Q2 2025 Transcontinental Inc Earnings Call
Okay.
Oh.
Ladies and gentlemen, thank you for waiting and welcome to the conference call regarding the second quarter results of fiscal year 2025 for TCC Transcontinental. During the conference, all participants will be in listen-only mode. A question period will follow the presentation and instructions will be given to you at that time. We would like to remind you that this conference is being recorded today, June 5, 2025.
But definitely Miss you now see that what Paciotti. If you had been you had of course that held steady for Nick coastal 90, if doesn't touch does gypsy Mr. Like Jeff says that they think that T. C. That's called it's not that high.
The other coffeehouse till about that stuff all the time, what they could send them out and taking out the costs shell. She forgot that pays off as Joe. It did suggest chip the Sahara doesn't have some of them are.
Did you also got to take a second effect also thought there's just say o'shell Judah thanks, sure they've been saying welcome.
Speaker Change: Welcome to the TC Transcontinental Second 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, June 5, 2025. I would like to turn the conference over to Yan Lapointe, Senior Director Investor Relations and Treasury. I would like to now say the word to Yan Lapointe, Director Relations with the Investors and Treasury. Mr Lapointe, please go ahead.
Speaker Change: Welcome to the TC transcontinental second quarter of fiscal year 'twenty twenty-five 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 June 15 2025.
Speaker Change: I would like to turn the conference over to young appoint senior director Investor Relations and Treasury shall I say, they're not back where they ended up point, Jack talk or that service because I just thought it shows up as he Mr that point. Please go ahead.
Speaker Change: Thank you, Israel, and good morning everyone on the call. Welcome to Transcontinental, second quarter of this called 2025 Earnings Call.
Speaker Change: Thank you Ed and good morning, everyone on the call welcome to cough cold snap had its second quarter of fiscal 2025 earnings call.
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 slide supporting management remarks.
Speaker Change: Before we begin please note that you can find on our website at Www Dot P. C. P C. Our quarterly 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 thereafter a 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 listen-only mode and should contact Jean-État-Pavache, Senior Manager of Corporate Communication for more and for me.
Speaker Change: If you are in listen only mode and should contact Jonathan for Bacci Senior manager corporate communications for more information.
Speaker Change: Yeah.
Speaker Change: We have with us today our President and Chief Executive Officer, Thomas Morin, and our Executive Vice President and Chief Financial Officer, Donald LeCavalier.
Speaker Change: We have with US today are president and Chief Executive Officer, Tom I'm, Okay, and our executive Vice President and Chief Financial Officer.
Speaker Change: Okay got you.
Speaker Change: As referenced on slide two, some of the financial measures discussed over the course of this conference call are non-ISR.
Speaker Change: As referenced on slide two some of the financial measures discussed over the course of this conference call are non ifr at it.
Speaker Change: You can refer to the MDNA for complete definition and your conciliation of these measures to
Speaker Change: Can refer to the MD&A for complete definition and reconciliation of these measures to ifr.
Speaker Change: In addition, this conference call might also contain forward-looking states
Speaker Change: In addition, this conference call also contains forward looking statements.
Speaker Change: These statements are based on the current expectations of management and information available as of today, and our outlook does not include the impact on our operations of potential tariffs or the labor conflict at Kandapot.
Speaker Change: These statements are based on the current expectations of management and information available as of today and our outlook does not include the impact on our operations potential terrorists or the labor conflict at catapult.
Speaker Change: Board-looking statements also involve numerous risks and uncertainty, 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 fifth cold 2024 annual and DNA 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 2024 annual MD&A.
Speaker Change: And in the latest annual information form.
Speaker Change: With that, I would like to turn the call over to our president and CEO , Thomas Molland.
Speaker Change: With that I would like to turn the call over to our president and CEO Tom might.
Tom Might: Thank you again and a good morning all. Once again, the results for this quarter demonstrate positive effects of our three-year program to improve our profitability.
Tom Might: Thank you Jan and good morning, once again the results for this quarter demonstrate the positive effects of our two year program to it.
Speaker Change: From a profitability and financial position with a growth of 11, 5% and adjusted net earnings per share in Q2 versus Q2 last year.
Speaker Change: with a growth of 11.5% and adjusted net earnings per share.
Speaker Change: As I anticipated, a packaging sector experienced a decrease in revenues on profit. [inaudible]
Speaker Change: As anticipated our packaging sector experienced a decrease in revenues and profits in Q2 compared to the second quarter of 2024.
Speaker Change: A 3% organic decline in revenues was many. [inaudible]
Speaker Change: 3% organic decline in revenues was mainly due to lower volume.
Speaker Change: Retail services and printing sector, we had a very good quarter with significant increases in revenue and EBITDA.
Speaker Change: We had a very good quarter, with significant increases in revenue.
Speaker Change: This solid performance was driven by growth in our book printing specialty solutions and in store marketing businesses.
Speaker Change: It also benefited from reduced costs, many...
Speaker Change: It also benefited from reduced costs, mainly due to the transition to radar.
Speaker Change: 60, I'm happy to report a significant year over.
Speaker Change: On safety I'm happy to report a significant year over year improvement across the company in the first six months for this fiscal year from 46 incidents to 28% to 40% decrease.
Speaker Change: We are very encouraged by the...
Speaker Change: We are very encouraged by these results, which we should get us close to a no injuries.
Speaker Change: Now looking ahead to the rest of the year, and starting with Pat-
Speaker Change: Now looking ahead to the rest of the year and starting with packaging, we should continue to benefit from the recovery, we're seeing in medical and <unk>.
Speaker Change: We must continue to benefit from reconciliation.
Speaker Change: and overall, looking at our good sales pipeline and with our continuous efforts to close.
Speaker Change: We're all looking at a good sales pipeline and with our continuous efforts to close deals combined with the implementation of additional costs. There we remain confident to achieve both inorganic volume and profit growth in the second half of fiscal 2025.
Speaker Change: Combine with the implementation.
Speaker Change: Both, An Organic Volume, and Post.
Speaker Change: The retail services and printing we focus on closing acquisitions in semi in Q3 and sustaining our sales momentum in books and imagine cost rigorously in our radar business given its tougher comparable second half of last year.
Speaker Change: We will focus on acquiring closing locations in 5 years.
Speaker Change: Imagine cost rigorously in our with our business given it's time.
Speaker Change: All you know, as the year unfolds, we continue to be laser-focused on our four priorities of growing profits, delivering a strong return on-
Speaker Change: Well you know as the year unfolds, we continue to be laser focused on our four priorities of growing profits delivering a strong return on assets, maintaining a solid balance sheet and commercializing sustainability.
Speaker Change: Retaining a Solid Balance Sheet and Commercializing Sustainability.
Donald: Alberta, you're Donald Thank you Tamara and good morning, everyone.
Donald: Thank you, Tara, and good morning, everyone. Moving to slide five of the earnings call presentation.
Donald: Going to slide five of the earnings call presentation.
Donald: For the second quarter of 2025, we report it 0.1% increase in red news versus the same quarter last year.
Donald: For the second quarter of 2025, we reported zero point, a 1% increase in revenues versus the same quarter last year.
Donald: This increase was caused by the first volume growth.
Donald: This increase was caused by the first volume growth in our retail services printing sector. Our artisan piece since 2022, and also a favorable FX impact.
Donald: and our retail service and printing sector, our RSMP since 2022, and also a favorable SXM pack.
Donald: This growth was partially upset by the impact of the sale of our industrial packaging activities, and lower volume and package
Donald: This growth was partially offset by the impact of the sale of our industrial packaging activities and lower volume and packaging.
Donald: Regarding profitability, we delivered a strong quarter with concentrated, adjusted a bit of $108.5 million.
Donald: Regarding profitability, we delivered a strong quarter with consolidated adjusted EBITDA of $108 $5 million.
Speaker Change: If we exclude the impact of the sale of the industrial packaging activities.
Speaker Change: And if we exclude the impact of the sale of the industrial packaging activity.
Speaker Change: Adjusted at the increase by $2.1 million following a very good performance from our RSNP6.
Speaker Change: <unk> EBITDA increased by $2 $1 billion following a very good performance from our artisan piece sector.
Speaker Change: Financial expense decreased by $5.4 million to $9 million.
Speaker Change: Financial expense decreased by $5 4 million to $9 million, mainly due to a lower debt level. Following strong cash flow generation in the last 12 months and from lower interest rates.
Speaker Change: may be due to a lower debt level following strong cashflow generation in the last 12 months and from lower interest rates.
Speaker Change: Adjusted in contacts remains stable at $12.7 million and represented an effective tax rate of 20.8%.
Speaker Change: Adjusted income tax remains stable at $12 7 million and represented an effective tax rate of 28%.
Speaker Change: This led to a solid adjusted earnings per share improvement of 11.5% going from 52 cents in Q2 last year to 58 cents in Q2 this
Speaker Change: This led to a solid adjusted earnings per share improvement of 11, 5%.
Speaker Change: Going from 52 in Q2 last year to 58 in Q2 this year.
Speaker Change: Now, moving to slide 6 for a sector review.
Speaker Change: Now moving to slide six for the sector.
Speaker Change: Packaging, for a second quarter, we generated reviews of $404 million, at 2% decrease compared
Speaker Change: And packaging for the second quarter, we generated revenues of $404 million at 2% decrease compared to last year.
Speaker Change: The decrease is mainly due to the sale of our industrial activities and to lower volume across most of our markets, partially upset by favorable exchange rates.
Speaker Change: The decrease is mainly due to the sale of our industrial activities and to a lower volume across most of our markets, partially offset by favorable exchange rate.
Speaker Change: In terms of profitability adjusted EBITDA decreased by eight 1% to $65 4 million, mainly as a result of the sale of our industrial activities and lower volume, partially offset by favorable exchange rate.
Speaker Change: In terms of profitability, adjusted it does decrease by 8.1% to 65.4 million dollars, made me as a result of the sale of our industrial activities and lower volume, partially upset by favorable exchange rate.
Speaker Change: A bit that margin was solid at 16.2% as we continue to see the benefits from our cost reduction effort.
Speaker Change: EBITDA margin was solid at 16, 2% as we continue to see the benefits from our cost reduction efforts.
Speaker Change: Moving to retail services and printing on slide seven. [inaudible]
Speaker Change: Moving to retail services of printing on slide seven.
Speaker Change: Revenue increased by 5.1% to $279.9 million.
Speaker Change: Revenue revenues increased by five 1% to $279 $9 million.
Speaker Change: This was mainly due to an increase in our book printing, Specialty Solutions, and in-store marketing activities.
Speaker Change: This was mainly due to an increase in our book printing specialty solutions and in store marketing activities.
Speaker Change: Our book business sales were solid in a second quarter. They benefited from a weaker Canadian dollar, and from the impact of a US book printer, outsourcing some volume to our book platform.
Speaker Change: Our book business sales were solid in the second quarter.
Speaker Change: Benefited from a weaker Canadian dollar and the impact of our U S book printer outsourcing some volume to our book platform.
Speaker Change: Adjusted a bit that grew by 15.5% to $54.4 million. $54.4 million.
Speaker Change: Adjusted EBITDA grew by 15, 5% to $54 $4 million.
Speaker Change: This is the fourth consecutive order of profitability improvement for the sector, as we benefit from significant costs, reduction initiative, including the closure of our sentia sign plant and the rollout of radar across the province of Quebec. [inaudible]
Speaker Change: This is the fourth consecutive quarter of profitability improvement for the sector as we benefit from significant cost reduction initiative, including the closure of our century ethane plant and the rollout of <unk> across the province of Quebec.
Speaker Change: We expect a tougher comparable in the second half of the year, as most of these cost reductions already impacted favorably the second half of last year.
Speaker Change: We expect a tougher comparable in the second half of the year as most of these cost reductions already impacted favorably to second half of last year.
Speaker Change: Looking at media, Q2 performance was in line with our expectations, as a decrease in reviews and profitability was mainly due to the end of the SRO contract last year.
Speaker Change: Looking at midyear Q2 performance was in line with our expectations as the decrease in revenues and profitability was mainly due to the end of the hour contract last year.
Speaker Change: Corporate costs were slightly higher than last year and were negatively impacted by eye-assure base compensation following the payment of the special dividend in April .
Speaker Change: Corporate costs were slightly higher than last year and were negatively impacted by iOS share based compensation following the payment of the special dividend in April.
Speaker Change: Now I'm turning to cash flow. As I expected, and in line with normal seasonal-
Speaker Change: Now turning to cash flow.
Speaker Change: As expected and in line with normal seasonality, we saw small working capital usage of $39 million in the second quarter of 2025.
Speaker Change: We saw a small working capital usage of $10.9 million in the second quarter of 2025.
Speaker Change: Despite this working capital timing, we generated $80.3 million from operating activities.
Speaker Change: Despite this working capital timing, we generated $83 million from operating activities.
Speaker Change: Our Capix, at $24.5 million, worth $5.6 million lower than last year, and positions us well to finish a fiscal year in line with our guidance of $122 million.
Speaker Change: Our capex at $24 $5 million worth $5 6 million lower than last year and positions us well to finish the fiscal year in line with our guidance of $120 million.
Speaker Change: We use the cash flow from operation of the last few quarters and the proceeds from the sale of our industrial packaging activities to pay a special dividend in April 2025.
Speaker Change: We use the cash flow from operation of the last few quarters and the proceeds from the sale of our industrial packaging activities to pay a special dividend in April 2025.
Speaker Change: Despite its official dividend, our net debt ratio remained very healthy at 1.70 times at the end of 2nd quarter 2025, compared to 1.71 times 6 months ago.
Speaker Change: Despite the special dividend our net debt ratio remained very healthy at $1 70 times at the end of the second quarter of 2025 compared to 171 times six months ago.
Speaker Change: Overall, we are pleased with our solid financial position and excluding the potential impact from tariffs and the labor issues that get it up both, we remain confident in our outlook.
Speaker Change: Overall, we are pleased with our solid financial position and exploring the potential impact from tariffs and the labor issues at Canada, Bulks, we remain confident in our outlook.
Speaker Change: Packaging. We saw positive, positive volume growth in the first month of our third quarter, including a continued recovery in our medical market.
Speaker Change: In packaging, we saw positive positive volume growth in the first month of our third quarter, including a continued recovery in our medical market.
Speaker Change: This has to our confidence to generate volume growth for the sector in the second half of fiscal 2025.
Speaker Change: This adds to our confidence to generate volume growth for the sector in the second half of fiscal 2025.
Speaker Change: This volume growth should support higher profits in the second half of the fiscal year, as we remain confident to grow organically, the adjusted a bit duff again in fiscal 2025.
Speaker Change: This volume growth should support higher profits in the second half of the fiscal year as we remain confident to grow organically adjusted EBITDA again in fiscal 2025.
Speaker Change: in retail services and printing, following a solid performance in the first half of the year, and despite a more challenging comparable in the second half of the year, we are confident to deliver a stable, adjusted a bit of fiscal 2025 compared to 2024.
Speaker Change: In retail services and printing following our solid performance in the first half of the year and despite a more challenging comparable in the second half of the year. We are confident to deliver a stable adjusted EBITDA in fiscal 2025 compared to 2024.
Speaker Change: And 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: Okay.
Speaker Change: Yes.
Speaker Change: Thank you, Ladies and Gentlemen, we will now proceed to the question and answer period. 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. Please also ensure that you pick up the receiver of your telephone device if you are using the hands-free function before pressing the keys. One moment, please, for the first question. Thank you. One moment, please.
Speaker Change: Now some of them as soon as Oh man up let's say, they're not picking up the cash salaries have thoughts since that venkat somebody a piece of their tusche twice you read you all right. So let's go to the fund activity into 92, Sakai a town called cell number toward the mountains. Nick is just that Hep c's download cause only T X Germany D. A.
Speaker Change: Again that was asked you the question that I stepped out of a <unk>.
Speaker Change: My next series G that Fox show named yet about that piece of land to US and then lesson here, but let me ask questions.
Speaker Change: Thank you one moment please ladies.
Speaker Change: Ladies and gentlemen, we will now conduct a question and answer session. If you have a question, please press star followed by the one on your touch-tone phone. You will hear a tone acknowledging your request. Your questions will be pulled in the order they are received. Please ensure you lift the handset if you are using a speakerphone before pressing any keys. One moment, please for your first question. Thank you very much.
Speaker Change: Ladies and gentlemen, we will now conduct a question and answer session. If you have a question. Please press star followed by the wondering your Touchtone phone you will hear a tour acknowledging your request.
Speaker Change: So we pulled it 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.
Ami: Nuzavomet Nain Cassandre Amia Patel, avec CIBC Capital Markets. Your first question is from Amia Patel with CIBC Capital Markets. Please go ahead.
Ami: This is have them at nine capstone to Ami pertinent havoc CIBC capital markets. Your first question is from.
Ami: Amir Patel with CIBC capital markets. Please go ahead.
Amir Patel: Good morning. Thomas, you pointed to lower volumes in the quarter across most packaging and markets. Can you give us some more color there on what you were seeing across the different categories? And if you have a sense as to how your market share position has evolved? Yeah.
Amir Patel: Hi, good morning.
Amir Patel: So once you've pointed to lower volumes in the quarter across most packaging end markets can you give us some more color there on what you were seeing across the different categories and if you have a sense as to how your market share position has evolved.
Amir Patel: Thank you, and thank you for the good questions here. So as we said, the medical is actually going up. There was something we anticipated when we spoke last time, and of Q1.
Amir Patel: Yes, Thank you and thank you for the good questions here, so as we as we said the.
Amir Patel: Medical is actually going up.
Amir Patel: Something we are we anticipated when we spoke last time end of Q1, so we could see an increase in demand in the medical segment.
Amir Patel: An increased in-demand. [inaudible]
Amir Patel: For transcontinental on the other hand, we continue to see some weakness in Latam.
Amir Patel: On the other hand, we continue to see some weakness in Latam. The crops are not high as we speak lower than last year. And these are the negative impact on our Latam year-over-year sales.
Amir Patel: Crops are not high as we speak lower than last year, and this had decided and it gets even in fact on our Latam year over year sales.
Amir Patel: Comment there, like-
Amir Patel: Comment I'd like to make third the rest of the business recovers, but not at the pace. We wanted so to sum actually you have ups and downs, but to southern remains a remiss and they get to doses. So it's really a bit across the board, we see we see softness.
Amir Patel: Transcription by SousTitreurs.com
Amir Patel: It's really a bit across the board.
Amir Patel: Great. And I understand some of your US packaging peers have come out with price increase announcements citing tariff headwinds for some of their input costs. Have you also announced similar increases? And maybe if you could break down for us, how much of the organic sales decline in packaging in the second quarter was priced versus volume?
Amir Patel: Okay, great and I understand some of your U S packaging peers have.
Amir Patel: <unk> come out with price increase announcements, citing a tariff headwinds for some of their input cost have you also announced similar increases and maybe if you could break break down for us how much of the organic sales decline in packaging.
Amir Patel: In the second quarter was price versus our versus volume.
Amir Patel: Well, yeah, we had some increase for some of the rematerials, but as we said, also beginning of the year, we were at the price transition. So overall, it's almost netting flat regarding pricing.
Amir Patel: Well, yes, we had some increase for some of the raw material, but as we said also beginning of the year, we will have a price concession. So overall, it's almost netting flat regarding pricing. So you can.
Amir Patel: It's mostly volume.
Amir Patel: Okay, that's all I have for now. I'll turn it over. Thanks.
Amir Patel: Okay fair enough.
Amir Patel: That's all I have for now I'll turn it over thanks.
Jeremy: And Jeremy.
Amir Patel: Yeah.
Nash: For question, can you see Adam Shine of Ignatio Bank Financial? Your next question comes from Adam Shine with Ignatio Bank Financial.
Amir Patel: That's a question I guess jumping into that.
Nash: Adam Shine of National Bank Financial Your next question comes from Nash, Adam Shine with National Bank financial.
Nash: Thanks a lot, good morning. So Tomo, just continuing on the packaging theme, as you look to the start of the first month of Q3, you're seeing growth besides medical, where are some of the pockets of potential improvement.
Nash: Thanks, a lot good morning, so just continuing on the packaging theme.
Nash: As you look to the start of.
Amir Patel: The first month of Q3, you talked your seat growth.
Amir Patel: Besides medical where are some of the pockets of potential improvement.
Speaker Change: Thank you Adam. We see indeed a continuous positive trend in medical weather.
Speaker Change: Yeah. Thank you Adam we seen this continues a positive trend in medical with a descent Q2, and we start stronger Q3 altogether. It's overall at them. We had a we had a good first period of Q3.
Speaker Change: It's the first time we're starting strong.
Speaker Change: All together, it's overall, Adam, we had a good first period of...
Amir Patel: with a net positive growth in line with what we actually said.
Amir Patel: With a net positive growth in line with what we actually are set and announced its a nice recovery in our in our beverage segments, we start to seeing some some good momentum here and we should enter in the second part of the year and the better seasonality for both Latam.
Amir Patel: It's a nice recovery, not in a beverage segment. We start to see some of...
Amir Patel: and we should enter in the second part of the year in a better seasonality for both latins.
Amir Patel: given the weather.
Amir Patel: Given the weather we.
Amir Patel: We talked about as well as our protein business.
Amir Patel: as well as up.
Amir Patel: Yeah.
Amir Patel: Okay, and if we turn to the impact of tariffs, I think on the last call, you talked about maybe six, seven percent sort of level. Maybe you didn't talk about it. Maybe we talked about that post facto, but I think when thinking about USMCA considerations, I think the actual impact potentially is significantly lower, maybe Toma or Danelle can just elaborate on that. Yeah, I agree. It is significantly lower. The only one now that we'll have in back, but not material is the new increase for this week of 25 percent. It will have some in back over our ISM business that we ship in the US, but nothing material of that.
Amir Patel: Okay, and if we turn to the <unk>.
Amir Patel: Pat dose of tariffs I think on the last call.
Amir Patel: You talked about maybe <unk>.
Amir Patel: 7% sort of level, maybe you can talk about it maybe we talked about that post facto but I think it takes you about U S. MCA considerations I think the actual impact potentially is significantly lower maybe.
Amir Patel: Tomorrow.
Amir Patel: Elaborate on that yes.
Amir Patel: Yes.
Amir Patel: Great.
Amir Patel: It is significantly lower.
Amir Patel: On the one now that will happen back, but nothing material has been new increase for this.
Amir Patel: This week of 25% it will have some add back over our ISR business that we shipped in the U S. But.
Amir Patel: I think material that we're talking to steel is steel, yes, sorry.
Amir Patel: TRANSMISSION
Amir Patel: OK.
Amir Patel: Okay.
Amir Patel: Packaging per se on them.
Amir Patel: Okay, no, I appreciate that. And just lastly, on the buyback, I mean, you took a pause in Q2 after being active in Q1, of course, we saw a special dividend getting paid out in April . Is that still a key element of capital allocation priorities going forward or do we need to start reflecting on where the share price is for maybe a slowdown in that area?
Amir Patel: Okay, No I appreciate that and just lastly on NAV on the buyback I mean.
Amir Patel: You took a pause in Q2 after being active in Q1 of course.
Amir Patel: We saw a special dividend getting paid out in April.
Amir Patel: Is that still you know a key element of our.
Amir Patel: Capital allocation priorities going forward or do we need to start reflecting on where the share prices for may be a slowdown in that area.
Amir Patel: Well, it's still an element. We were quite happy with the return. We gave the last 12 months to the shareholders, including part of it from the buyback, coming from the buyback, and also, as you mentioned, the special dividend. And it's still part of our plan, but sometimes we're working also on MNA that will put us aside regarding the NCIB, but it's still part of the plan.
Amir Patel: Well, it's still it's still and then I met we were quite.
Amir Patel: With the return we gave the last 12 months to the shareholders, including part of it from the buyback coming from the buyback and also as you mentioned the special dividend.
Amir Patel: And it's still part of our plan, but some time ago.
Amir Patel: We're working also on M&A that will put us aside regarding the in CIB, so, but it's still part of the plan.
Amir Patel: Okay, and sorry, just one point clarification. Thomas, did you say something about ISM and PAC and acquisitions? Did I mishear that? We mentioned that actually and I'm in Q1 as well. We have a strong pipeline of acquisitions for ISM, and I expect some...
Amir Patel: Okay, and sorry, just one point of clarification.
Amir Patel: Did you say something about I S salmon.
Amir Patel: And acquisitions.
Amir Patel: Mishear that.
Amir Patel: Yes, we are.
Amir Patel: And that extra yet.
Amir Patel: Q1 as well.
Amir Patel: We have a strong pipeline of acquisitions for ASM.
Amir Patel: Expect some announcements to be made in Q3 perfect. Okay. Thank you very much.
Amir Patel: Perfect. Okay. Thank you very much.
Amir Patel: Yeah.
Speaker Change: The next question comes from Kasia Kopytek with TD Cowan.
Speaker Change: No question Castillo can't catch Yeah, coffee checkout Vic TD Cowen. Your next question comes from Kashi I could protect with TD Cowen.
Cash: Thank you. Bonjour tout le monde. Hi, it's passion on the line for Sean. I have a couple questions.
Marshall: Thank you Marshall.
Cash: Cash on the line for Sean I have a couple of questions.
Speaker Change: I'm sticking with the packaging theme a little bit. You gave some good color around medical and Latin America. Just on Latin America. So with the destocking that looks like it's essentially complete. Our last quarter you talked about. Basically the ability to convert your backlogs just being limited by how quickly you can manufacture or convert that. Is that still the case and how do you see that pace in the second half?
Speaker Change: Sticking with the packaging theme a little bit you gave some good color around medical and Latam.
Speaker Change: Latin America, so with the Destocking that looks like it's essentially complete I last quarter you talked about.
Amir Patel: Basically the ability to convert your backlog just being limited by how quickly you can manufacture convert Todd is that still the case and how do you see that pace in the second half.
Amir Patel: So, thank you, Kasia, for your question. Two things on that. The backlog is mainly medical. We saw the recovery in demand, starting back end of Q1 and Q2 demonstrated that. So, we continue to have a strong backlog, we conferred in sales in medical. So, that's really...
Amir Patel: So.
Amir Patel: Thank you for your question two things on that the backlog is that many medical.
Amir Patel: We saw the recovery in demand starting back end of Q1 and Q2 demonstrated that so we continue to have a strong backlog we convert into sales in the medical so thats really truly the case for medical in Latam.
Amir Patel: The case from medical. In late time, it's not backlog-related nor destocking. It is really weather. It's a agriculture.
Amir Patel: It is not backlog related norges stocking it is really weather.
Amir Patel: Agriculture based business and depending on the size of the crops, we sell more or less.
Amir Patel: depending on the size of the props we sell more.
Amir Patel: We had a weak first half of the year.
Amir Patel: We had a weak first half of the year crop related.
Amir Patel: Seasonality should push this up.
Amir Patel: Isn't that a tissue would push us up in the second half.
Amir Patel: Thank you for clarifying. I appreciate that. And I think last quarter you mentioned also something in Ecuador and just the electricity there being a problem. Is that you think you can get that back in the second half as well? That's a good point. Thank you for remembering this actually. We have some electricity shortages in Q2 in Ecuador. That's very true. That has just happened.
Amir Patel: Gotcha, Thanks for clarifying I appreciate that.
Amir Patel: And I think last quarter, you mentioned also something in Ecuador and.
Amir Patel: Just the the electricity there being a problem that is that do you think you can get that back in the second half as well that's a good point that thank you for it for remembering this actually we have some.
Amir Patel: Electricity shortages in Q2, and the corridor, that's very true that is disruptive to their business.
Amir Patel: More from a profitability standpoint than a volume standpoint, we had to experience some plant shutdowns.
Amir Patel: More from a profitability standpoint than a volume standpoint.
Amir Patel: <unk> experienced some some comps shutdowns because of this electricity shortages impacting bottom line not too much different.
Amir Patel: And just switching gears a little bit, your competitor, Amp, or recently referenced lower demand and North America for flexible. I mean, sounds like you're experiencing similar things. They also mentioned weaker beverage volumes. Are you seeing anything there? I mean, there's, I guess, some debate around whether beverages are cyclical or seasonal, but any context you can provide around that sub segment. [inaudible]
Amir Patel: Got it.
Amir Patel: And just switching gears, a little bit your compare and poor recently referenced lower demand in North America, it's flexible and it sounds like you are experiencing similar things. They also mentioned weaker beverage volumes are you seeing anything there I mean, there's some debate around whether it's beverages or our cyclical or seasonal but any context, you can provide around that sub segment.
Amir Patel: The beverages by definition is indeed seasonal. I wouldn't say cyclical, but I would say seasonal, obviously as the weather turns out warmer people end.
Amir Patel: For beverages by definition is indeed, a seasonal I wouldn't say cyclical, but I would say is seasonal obviously as the weather turns out warmer people into a two drink more.
Amir Patel: More. Apart from that, we don't see any change. We don't see any change.
Amir Patel: Apart from that we don't see any change.
Amir Patel: Don't see any weakness in the beverage segment.
Amir Patel: Average Segment, maybe this is specific to the portfolio.
Amir Patel: Maybe this disposition.
Amir Patel: So the portfolio of our competitors are working on it but we don't see that.
Amir Patel: Gotcha. Switching gears to retail services and printing segment. In the MDNA, you talked about higher book printing volumes, and that being enabled by just some competitive pricing on contracts were able to secure because of FX tailwind. Am I right in thinking that this is sort of more of a one-time volume bump just given that the US dollars depreciating here? How should I think about that?
Amir Patel: Gotcha.
Amir Patel: Switching gears to retail services and printing segment in the MD&A, you talked about higher book printing volumes and that being enabled by just some competitive pricing on contracts were able to secure because of FX tailwind.
Amir Patel: Am I right in thinking that this is sort of more of a one time volume bump just given that the U S. Dollar depreciating here, how should I think about that.
Amir Patel: Well, obviously the currency has helped us becoming even more competitive. That's a fact. That being said, we report last year some high level of perception and business development in Boop to grow the business.
Amir Patel: Well obviously.
Amir Patel: Currency has helped us becoming even more competitive.
Amir Patel: That being said that we reported last year's some some high level of prospecting and business development and book to grow their business, which has paid off in Q1 and continues to pay off in Q2.
Amir Patel: and the P.A. in the end.
Amir Patel: and on our pipeline of opportunities and business.
Amir Patel: Our pipeline of opportunities and business development remains remained strong for the remainder of the year. So I wouldn't consider this as a as one timers.
Amir Patel: So I wouldn't consider this as a...
Speaker Change: Okay, I was just thinking maybe because of the stronger or the weaker Canadian dollar you were able to make some competitive pricing, but now that...
Speaker Change: Okay I was just thinking maybe because of the stronger the weaker Canadian dollar are you able to make some competitive pricing, but now that.
Speaker Change: We're a reversing course, maybe you're not able to offer that competitive price and it sounds like that's not the case.
Speaker Change: We're reversing course, maybe you're not able to offer that competitive pricing.
Speaker Change: That's not the case.
Amir Patel: Yeah, now Donald's speaking. Obviously, the weaker it can be $1.4 T.C. is good for our book business. So, second quarter, we're close to $1.40, but we still are on $1.35 one.
Amir Patel: Donald speaking obviously the weaker Canadian dollar is for TC is good for our business.
Amir Patel: So second quarter, we were close to $140, we're still around $135 36, which is with overall earnings.
Amir Patel: Transcontinental Inc.
Amir Patel: In exchange rate.
Amir Patel: That's one thing and second thing is our book business kind of slowdown I would say 18 months ago. Following a strong push.
Amir Patel: kind of slowed down. I will say 18 months ago following a strong push during the COVID period. And we think this is also more normal business right now. I think said that we do have some one timer and I mentioned it in my comment. There were some some of the business from a US printer that we gave. We don't expect to let the entire business next year, but they will be a little bit less from that client. But overall
Amir Patel: The Covid period, and we think this is also more normal business right now I think I said that we do have somewhat fiber and I mentioned it in my comments there were some some of the business from a use for it.
Amir Patel: We don't expect to launch the <unk> business next year, but there will be a little bit less from that client, but overall.
Amir Patel: Transcription by SousTitreurs.com
Amir Patel: Strong currency help us, but the U S. Dollar is still at 135 is still good for us.
Amir Patel: Yeah, that makes sense. Thank you for that context. Just aside for book printing, there were some encouraging comps for your specialty printing and ISM, and I appreciate some of that was just from an easier comp versus last year. But Nidhi, can you parse out? Is there some favorable kind of underlying growth happening beneath the surface for those particular areas? Any context you can provide? I would say I agree with you for the book business. Actually, it was an easier comp, but we do have a very strong quarter. But ISM has been growing for us, either by position or strong, and are getting growth over the last few years. Actually, more than that. So it's not an easy comp on that side of us.
Amir Patel: Yeah that makes sense. Thank you for that context.
Amir Patel: Aside from the printing theres, some encouraging comps for your specialty printing than I am and I. Appreciate some of that was just from an easier comp versus last year, but maybe can you parse out was there some favorable kind of underlying growth's happening beneath the surface for those particular.
Amir Patel: Are there areas any context, you can provide.
Amir Patel: I will say.
Amir Patel: I agree with you for the book business actually it was an easier comp, but we do have a very strong quarter, but <unk> been growing for us either by acquisition or strong organic growth over the last three or four years actually more than that so it's not an easy comp on that side of the business specialty I agree also because specialty which is that.
Amir Patel: Specialty, I agree also, because Specialty, which is not as big for us as being suffering a little bit like the book post-COVID impact, but overall ISM.
Amir Patel: As big for US has been suffering a little bit like the book post Covid impact, but overall ISF is keeping a very great momentum of organic growth for us over the last few years.
Amir Patel: It is a great development movement of the organization for us in recent years.
Amir Patel: And every quarter.
Amir Patel: I'm going to turn over the line shortly, but just the last question on monetization of your non-core real estate assets. It's a bit of a tougher market. I appreciate you probably want a way to get full value. I think you have two buildings left for 60 to 80 million. How are you thinking about the timing of that?
Amir Patel: I'm going to turn over the line shortly but just the last question on monetization of your non core real estate assets, it's a bit of a tougher market. I. Appreciate you probably want to wait to get full value. I think you have two buildings left for $60 million to $80 million. How are you thinking about the timing of that.
Amir Patel: Well, that's certainly, as we said earlier, the chariff don't impact us that much on the PNS side of the business, but I would say that the uncertainty coming from the tariff and back announcement has created a very slower market. So we were hoping to do those transactions in this fiscal year. I'm not saying it's impossible, but we definitely see it slowed down in the market and we will wait for the right price.
Amir Patel: Well, that's certainly as we said earlier the charter if don't impact us that much on the P&L side of the business, but I will say that.
Amir Patel: Incidentally coming from the tariff at back announcements as create a very a slower market. So we were hoping to.
Amir Patel: Do those transaction in this fiscal year I would say, it's impossible, but we definitely see a slowdown in the market.
Amir Patel: And we will wait for the right pricing.
Amir Patel: More to come, but it's slower than it was a couple months ago.
Amir Patel: Arctic cat, but its slower than it was couple of months ago.
Amir Patel: Makes sense. McC, I'll turn the line over. Take it.
Amir Patel: It makes sense next I will turn the line over.
Speaker Change: The question question comes from Stephen MacLeod with DMO Capital Markets, your next question comes from Stephen MacLeod with DMO Capital Markets.
Speaker Change: Next question comes Joe at the end of season that cloud <unk> BMO capital markets. Your next question comes from Stephen Macleod with BMO capital markets.
Amir Patel: Great. Thanks. Good morning, guys.
Amir Patel: Great. Thanks, Good morning, guys.
Amir Patel: Well, it's a great color so far, so I just wanted to follow up on a couple of things. Just with respect to, with respect to the Canada Post situation, if we do see a, if we do see strike action being implemented, is the impact sort of similar to what it would have been in terms of the magnitude back in the summer or is there something that's has anything changed in the business that might change, you know, something else changed into this is that might change with the potential strike impact to look like.
Amir Patel: Lots of great color. So far so I just wanted to follow up on a couple of things.
Amir Patel: Just with respect to.
Amir Patel: With respect to the Canada post situation.
Amir Patel: If we do see is if we do see strike action being implemented.
Amir Patel: Is the impact sort of similar to what it would've been a in terms of the magnitude back in December or is there something or is there anything changed in the business that might change.
Amir Patel: Something else changed in the business that might change, what's the potential strike impact look like.
Amir Patel: Yeah, so thank you for the question. The answer is no. We had to make it to make it short. We don't expect.
Amir Patel: Yes. So thank you for the question.
Amir Patel: The answer is no we have to make it to make it short we don't expect to see.
Amir Patel: As a big and impact, as we had last year in November , several reasons for that. Number one, we anticipated on that. So we...
Amir Patel: As big an impact as we had last year in November.
Amir Patel: Several reasons for that number one we anticipated on that so we obviously could put an attendance of distribution network earlier.
Amir Patel: Alternative Distribution at work earlier with more preparation.
Amir Patel: With more preparation and as a consequence less expensive moving forward. The second thing is the distribution hasnt stopped as we speak as you know and there's ongoing negotiations between the unions in Canada post under the supervision of the government. So we don't expect to see any major disruption moving forward at this stage.
Amir Patel: Forward. The second thing is the distribution hasn't stopped. [inaudible]
Amir Patel: And there is an ongoing negotiations.
Amir Patel: Canada Post under the supervision of the government. So we don't expect to see any major disruption moving forward.
Amir Patel: But the quick answer is
Amir Patel: But the quick answer is no we do not expect to see as big of an impact.
Amir Patel: Q3.
Amir Patel: Okay, that's helpful. Thank you, Tomah. Just digging in a little bit on the packaging space. So it sounds like, you know, obviously you're maintaining a guidance for a stronger back half of the year. On the volume side, you've talked about a few places where you've seen scenes and strength. I'm just curious if you can give some color on how that translates into margins in the back half of the year.
Amir Patel: Okay. That's that's helpful. Thank you Tamara.
Amir Patel: Just digging a little bit on the packaging space. So it sounds like.
Amir Patel: You're maintaining your guidance for AR.
Amir Patel: Stronger back half of the year.
Speaker Change: On the volume side, and you've talked about a few places where you've seen some strength I'm. Just curious if you can give some color on how that translates into margins in the back half of the year.
Speaker Change: While we combine, we combine both things and it's growing organically and continuing to be frugal and cost conscious. So the two agendas continue to run in parallel. So we don't expect to see a significant or a big impact on our minds.
Speaker Change: While we combine we combine both things.
Amir Patel: It's growing organically and continuing to be frugal and cost conscious. So the two agenda continue to run in parallel. So we don't expect to see a significant or a big impact on our margin percentage levels.
Amir Patel: Does that mean, meaning on a year-over-year basis, respect on to see much margin expansion? Is that how you mean that?
Amir Patel: Does that mean, meaning.
Amir Patel: Meaning on a year over year basis, do you expect that Youll see much margin expansion is not.
Amir Patel: Well, if you look at like this quarter, last, last second quarter, as we mentioned, it was a very strong quarter for 14.
Amir Patel: Well if you look at this quarter last plastic in quarter as we mentioned it was a very strong quarter for <unk>.
Amir Patel: We're about 17% and we're under, but Q1, we were, you know, you're over here equal. And last year the sick and half margin wise was down, so we expect to be at least better than last year or the margin with the forecast we gave in the person. Yeah. [inaudible]
Amir Patel: We're above was above 17% and were under but Q1, we were year over year and call. It last year that second half margin wise was down so we expect to be at least better than last year or the margin with the forecast we gave in the first yeah.
Amir Patel: The outlook.
Amir Patel: Okay. Okay. Now that's that's helpful. Thanks, Donald. And then maybe just finally on on the research services and printing sector, and you gave some good color around the books business, and kind of the outlook there. You know, can you just talk a little bit about on ISM sort of, where are you seeing pockets of strength in that business? Is it across the border or there's specific areas where you're seeing incremental, incremental strength? And I guess related to that, did you see anyone kind of pull back on ISM spending with reflected to reflect tariffs, or, or is that not helpful?
Amir Patel: Okay. Okay. No. That's that's helpful. Thanks Bill.
Speaker Change: And then maybe just finally on <unk>.
Speaker Change: The recent retail services and printing sector again, you gave some good color around around the books business.
Speaker Change: And in kind of the outlook there.
Speaker Change: Can you just talk a bit about on sort.
Speaker Change: Sort of where are you seeing.
Speaker Change: Pockets of strength in that business is it across the board or are there specific areas, where you're seeing incremental incremental strength and I guess related to that did you see any one kind of pull back on some spending with reflect to reflect tariffs or or or has that not happened.
Speaker Change: The answer is no, we do not see any customers pulling back.
Speaker Change: John says no we do not see any customers pulling back pulling back.
Speaker Change: Projects for that. We continue, we grow the business, again, and cleanize. We continue, we continue, we continue.
Speaker Change: My budget for that we continue as we grow the business organically and ISR.
Speaker Change: Project Based Business and Revenue Active Prospects.
Speaker Change: The project based business and we have an active prospect shown activity, which goes from coast to coast now, we also expand our footprint and I assume so so in organic growth across the country no sign of.
Speaker Change: Transcription par SousTitreur.com
Speaker Change: So not getting growth across. [inaudible]
Speaker Change: customer is putting back.
Speaker Change: Customers pulling back or reducing our expenses.
Speaker Change: Okay, that's, that's great. Thanks guys, appreciate the color.
Speaker Change: Okay. That's great. Thanks, guys I appreciate the color.
Speaker Change: Thank you.
Speaker Change: The next question comes from Maher Yaghi with Scotiabank.
Speaker Change: That question I guess, you'll get down there you know again Scotiabank. Your next question comes from mere Yaghi with Scotiabank.
Speaker Change: Good morning. My first question I wanted to ask you is on the M&A. You mentioned you are looking to undertake one in your ISM business.
Speaker Change: Pretty much yes. Good morning, I wanted my first question I wanted to ask is on the M&A M&A you mentioned youre looking to undertake one.
Speaker Change: I assume business.
Speaker Change: Just wanted to ask you your current leverage is 1.7. What do you feel you can be comfortable taking that up to in the current environment under, you know, with inside and emanate transaction and also on the packaging side. Can you discuss your emanate funnel and if it's expanding or getting smaller and how do you feel about the opportunities for emanate in that segment. Thank you.
Speaker Change: Just wanted to ask you. Your current leverage is one seven what do you feel you can be comfortable taking that up to.
Speaker Change: In the current environment there.
Speaker Change: With.
Speaker Change: In fact, an M&A transaction and also on the packaging side can you discuss your M&A funnel and it's expanding or.
Speaker Change: Smaller.
Speaker Change: And how do you feel about the opportunities for M&A in that segment. Thank you.
Speaker Change: I can take the Love Registration, where, as you said, 171, and we will generate a lot of cash flow till the rest of the year, so we should get better if there's no-
Speaker Change: I can take the leverage ratio, whereas you said 170, and we will generate a lot of free cash flow as the rest of the year. So we should get better Theres no acquisition having.
Speaker Change: Having said that, we always said that we don't have a specific target. We're comfortable under two. Why we're comfortable to be under two? Give us a lot of opportunity to either be active like we did on a special dividend on NCI.
Speaker Change: Having said that we always said that we don't have a specific target we're comfortable out there to why we're comfortable together to give us a lot of the above.
Speaker Change: So you can either be active but like we did on a special dividend on that in CIB in the past when we did Congress we were up 335, because we were aware.
Speaker Change: In the past, when we did COVID-19, we were up at 3.5 because we were very confident to get back to 2 over the next 2 years, which we did. So give you a range of possible acquisition, I think said that. Yes, we do have ISM transaction in a pipeline, but nothing major that will push us at a very high level of the...
Speaker Change: So debt to get back to over the next two years, which we did but give you a range of possible acquisition I think I said that.
Speaker Change: Yes, we do have ISF transaction in the pipeline, but nothing major that will push us at a very high level of debt ratio.
Speaker Change: I'll take a question on the packaging, M&A, so two things to say here. First, remember we've been investing a lot in our capex to a vogue.
Speaker Change: Yeah I'll take the question on the packaging M&A, so two things to say here first.
Speaker Change: Remember, we've been investing in capex to grow organically, so capacity wise technology wise I think we're in a good spot to be.
Speaker Change: Capacity-wise and technology-wise, I think we're in a good spot to look and clear packaging with us.
Speaker Change: Our organic packaging without M&A first thing second thing is the activity in M&A as in packaging is limited as we see.
Speaker Change: Second thing, the activity in a magazine packaging is limited.
Speaker Change: We receive from time to time some...
Speaker Change: We receive from time to time, some some opportunities to go get but they are very minor and there is nothing really that would make a huge difference for us strategically so very very quiet Victor it's an imminent as basic package.
Speaker Change: You get, but they're very minor, and there is nothing really different.
Speaker Change: Very, very quiet.
Speaker Change: Okay, great. So, just Donald wanted to ask you, I know it's still not close. I mean, the Senate...
Speaker Change: Okay, Great. So just Donald I wanted to ask you I know.
Speaker Change: So.
Speaker Change: Not not close.
Speaker Change: The Senate.
Speaker Change: The House has approved the budget reconciliation bill in the US, and now it's up going to the Senate. But a lot of discussion I've been getting is on section 899. I mean, it is focused on asset management entities, but is there anything in section 899 that could increase your tax bill in the US? [inaudible]
Speaker Change: The house has approved the budget reconciliation bill in the U S and now it's going to defend that but a lot of discussion I've been getting is on section 899.
Speaker Change: <unk>.
Speaker Change: Focused on asset management entities, but is there anything in.
Speaker Change: Section 899 that could increase your tax bill in the U S.
Speaker Change: I don't know, you know, what's 899, but what I do know about this new project is that it may, it may have an impact or heard a free cash flow that we generate in the US and that we want to bring back in Canada either by loans or dividend. This is something that they're being working around for. [inaudible]
Speaker Change: I don't know whats 899, but what I do know about this new project is that it may it may even in fact over the free cash flow that we generated in the U S and that we want to bring back in Canada, either by loans or dividend.
Speaker Change: This is something that they're being working around for many.
Speaker Change: That's what we're talking about, but the way we're writing it right now with our tax specialists is that first, it has to be approved, which can be a long process. Secondly, it's going to be, you know, next year, it's not like it's going to happen in 24 months, it's a longer period where we think we can find ways to adapt.
Speaker Change: Talking about but the way we read it right now with our tax specialists, it's going to be first it needs to be approved with might be a long process circuit.
Speaker Change: It will be over the next year, it's not like it will add but.
Speaker Change: At 24 months, it's a longer period, where we think we can find ways to adjust ourselves. So there is eight or you finance director at the U S. So we're following that but I don't see on the short term any material impact on the free cash flow coming out of the U S. But this is something that we will follow for sure.
Speaker Change: Transcription par SousTitreur.com
Speaker Change: Yes, there are ways around it in terms of how you finance the operations, financing in the U.S. directly instead of Canada. It's the withholding tax application that is problematic, but I understand what you're saying. It's still very new and it will take time to get implemented, so you can work around it. One last question I had is on volume. On the packaging side, you seem to have a positive outlook in the second half. Apart from the increase that you're seeing in the short term on the medical side,
Speaker Change: Yes, there are ways around it from in terms of how you finance the operations side.
Speaker Change: In the U S directly instead of Canada.
Speaker Change: It's the withholding tax application.
Speaker Change: But I understand what youre, saying its still very.
Speaker Change: Very new and it will take time to get implemented so you could have that work quite well.
Speaker Change: Okay great.
Speaker Change: One last question I had is on volume.
Speaker Change: As seen on the packaging side, you seem to have a positive outlook on the second half.
Speaker Change: From the increase that Youre seeing.
Speaker Change: In the short term on the medical side.
Speaker Change: What gives you confidence that the growth in volume is going to continue for the next couple of quarters?
Speaker Change: What gives you confidence that the growth in volume is going to continue.
Speaker Change: For the next couple of quarters.
Speaker Change: You have that kind of visibility out into your Q4 in terms of the volume.
Speaker Change: Yes so.
Speaker Change: So sorry, but do you have do you have that kind of visibility out into the into your Q4.
Speaker Change: In terms of the volume.
Speaker Change: We do.
Speaker Change: So, starting with where from the medical continues to be strong and will be strong.
Speaker Change: So starting with the where from the medical continues to be strong and we have a strong Q2 Q3 Q4, I remind you that last year Q3, Q4 for medical were very weak.
Speaker Change: Q4, I remind you that last. [inaudible]
Speaker Change: It's a bit the same as the book story we had a year.
Speaker Change: It's a bit the same as the group story, we had a year before so the year over year.
Speaker Change: So the year over year, we'll show a very strong...
Speaker Change: So a very strong uninteresting growth in medical.
Speaker Change: All in all, we are also having a very strong pipeline of...
Speaker Change: All in all we also having a very strong pipeline of opportunities we're focusing on.
Speaker Change: Focusing on the...
Speaker Change: Distances and efficiency of our of our closing ratios. So all in all a good.
Speaker Change: of our closing ratios. So all in all, we have a good line of sight.
Speaker Change: Good line of sight on the on our stronger it's through them.
Speaker Change: Yes, we do.
Speaker Change: Okay great.
Speaker Change: Ok, great, thank you very much.
Speaker Change: Okay.
Speaker Change: The next question comes from Drew McReynolds with RBC Capital Markets.
Speaker Change: No question, Sylvia and then drew Mcreynolds RBC capital markets. Your next question comes from drew Mcreynolds with RBC capital markets.
Speaker Change: Thanks very much. Good morning. Do for me Thomas said on your comments around the good sales pipeline within packaging and all the commentaries.
Speaker Change: Thanks, very much good morning.
Speaker Change: Two for me Thomas.
Speaker Change: On your comments around the good sales pipeline within packaging and all the commentary.
Speaker Change: just said about volume and the visibility on volume. I know internally there's a little bit of a bigger focus on the failside and replenishing the pipeline and getting the funnel. Stronger, can you talk to, you know, those internal initiatives that are incremental that are being put into place? And is this kind of allowing you to gain share in terms of that volume or is the improvement sales pipeline, you know, more more an industry dynamic. And then secondly, for you, Donald, just on the remaining cost savings, I think there's a target of 40 million last quarter, you're at 30, you're probably still realizing ongoing cost savings. Just where are we with respect to realizing the remaining 10. Thank you.
Speaker Change: Just sort of a volume and the visibility on volume I know internally there is a little bit of a bigger focus on the sales side.
Speaker Change: And replenishing the pipeline and getting the funnel stronger can you talk to.
Speaker Change: Those internal initiatives that are incremental that are.
Speaker Change: Being put into place.
Speaker Change: Is this kind of allowing you to gain share.
Speaker Change: In terms of that volume or is.
Speaker Change: It is the improving sales pipeline more more more.
Speaker Change: Industry dynamics and then secondly, after you Donald just on the remaining cost savings I think there was a target of $40 million last quarter you were at 30.
Speaker Change: You probably.
Speaker Change: Still realizing ongoing cost savings just where are we with respect to realizing the remaining 10. Thank you.
Speaker Change: Alright, so I'll take the first one that only take a second. In terms of the sales pipeline, we have a strong process, and I'm focusing a lot on making sure this process.
Speaker Change: Alright, So I will take the first one you take the second.
Speaker Change: In terms of.
Speaker Change: Our sales pipeline, we have a strong process.
Speaker Change: Focusing a lot on making sure. These processes is going fine and there is a good execution, that's really what it is I'm not I'm not expecting any tailwind.
Speaker Change: That's really where it is. I'm not expecting any tailwind, if you will, from the industry. If there is good, if there is not, I don't think we need it. The only tailwind would come from seasonality in that time as well.
Speaker Change: Tailwind if you will from the industry. If there is good.
Speaker Change: There is not I don't think we need it.
Speaker Change: The only tailwind would come from seasonality in <unk>.
Speaker Change: Latam as we discussed so it's really around managing our process in a very efficient manner.
Speaker Change: So it's really around managing our process.
Speaker Change: Very efficient and...
Speaker Change: Manor targets are well identified, opportunities are known, it's
Speaker Change: Manner targets or where that amplified opportunities are known.
Speaker Change: It's closing them.
Speaker Change: I want to take that for a while we will.
Speaker Change: Yeah, yeah. While we will, we, we will achieve this safe, this cost saving.
Speaker Change: We will achieve this safety discussed saving in <unk>.
Speaker Change: Even in the opening comments by Thomas, we did mention that we're confident regarding the sale outlook for packaging for the second half, but we'll still be pushing, we're still pushing for a constitution.
Speaker Change: You've been in the opening comments by Thomas We did mentioned that were were confident regarding the sale outlook for packaging for is it going up but we'll still be pushing we're still pushing for cost efficiency and our comment at the beginning of the year. It was in this remained debt sales.
Speaker Change: Our comment at the beginning of the year was in this remain that sales because of the price concession we're giving right now in the market will probably be flatish for TC on the packaging side but we're remaining confident for arguing growth on it but does so this is the cost-saving program that continue to kick in to support us and obviously RSNP as a very strong first at some challenge in the second half therefore we're active also on this site so what will achieve this target at 40?
Speaker Change: Because of the price concession, we're giving right now in the market will probably be flattish for T. C. On the packaging side, but we remain confident for our getting growth on EBITDA that this is the this is the cost saving program that continue to kick it to support us and obviously.
Speaker Change: <unk> is a very strong.
Speaker Change: First off some challenge in the second half. Therefore, we're active also on this site. So we'll achieve this target of 40 million for sure.
Speaker Change: Great. Thanks for the additional cover. Thank you.
Speaker Change: Great. Thanks for the additional color. Thank you.
Speaker Change: Sure.
Speaker Change: Ladies and gentlemen, once again, if you have any additional questions, please press the star key 1.
Speaker Change: You may that May Miss Youre on a coffee question Xavier <unk> just came out Todd they used to get a piece of their tuition. It's one.
Speaker Change: If you want to use the Fox on May 11, go ahead and download the recipe before using it. Ladies and gentlemen, if there are any additional questions at this time, please press star followed by the one. As a reminder, if you are using a speakerphone, please put your hands up before pressing any...
Speaker Change: She was at Fox, so mainly because she noticed that type of event that piece of it two ish, ladies and gentlemen, if 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 speaker phone. Please lift the handset before pressing any case that question, Ken Jones Gander, David Mcfadden of at core Mark. Your next question comes from David Mcfadden with core Mark.
Speaker Change: The next question comes from David McFadgen, with Cornmark. Your next question comes from David McFadgens, with Cornmark.
Speaker Change: A very, um, yeah, a couple of questions.
Speaker Change: Okay.
Speaker Change: Couple of questions.
Speaker Change: So I think you said, you know, you have decent visibility on the volume growth for packaging in the back half of the year. So I would imagine in order to meet that either expectation of of growth and packaging packaging, you need that volume right is that true? [inaudible]
Speaker Change: So I think you said you know you have decent visibility on the volume growth for packaging in the back half of the year. So I would imagine in order to meet that expectation.
Speaker Change: Growth in packaging and packaging EBITDA, you need that volume right is that true.
Speaker Change: Despite both volume and cost, the...
Speaker Change: Well, it's both volume and cost.
Speaker Change: The answer is yes.
Speaker Change: The answer is yes, we need volume and cost at the same time.
Speaker Change: Transcription par SousTitreur.com
Speaker Change: Doctor of Medicine
Speaker Change: Hence the agenda and to brokers recruit share today.
Speaker Change: Okay, okay, and then just just switching to ISM. I mean, that there's a stippably growing at a pretty good clip. Can you give us an idea of the growth that this experience in the quarter and how much that business represents for the whole pack printing segment? [inaudible]
Speaker Change: Okay, Okay, and then just switching to RSM.
Speaker Change: That business has typically grown at a pretty good clip.
Speaker Change: Can you give us an idea of the growth that business experienced in the quarter end.
Speaker Change: That business represents.
Speaker Change: Here's a whole pack printing segment.
Speaker Change: The growth in the quarter was about 5% for the quarter for the business and the business now if we exclude the commercial part of the business, I think we disclose it.
Speaker Change: The growth in the quarter was the growth was about 5% for the quarter for the business and the business now if we exclude the commercial part of the business I think we disclosed that separately now is north of $200 million.
Speaker Change: Okay. Great. Thank you.
Speaker Change: Okay. Okay.
Speaker Change: Thank you.
Speaker Change: In the Sampli d'Ava de Castilla, Mr. Point, there are no further questions at this time.
Speaker Change: In this piece of other guests young Mr. At point there are no further questions at this time.
Speaker Change: Thank you, Dryad, and thank you everyone for joining us on the call today, looking forward to speaking to you soon.
Speaker Change: Thank you Joanna and thank you everyone for joining us on the call today looking forward to speaking to you soon.
Speaker Change: Okay.
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 concludes today's conference. Thank you for participating. Please disconnect your lines.
Speaker Change: And then Mitch just to tell them in the past.
Speaker Change: Coffeehouse pillows Yahtzee now stood up with her pets that you haven't seen it not that question, ladies and gentlemen. This concludes the conference call for today. Thank you for participating please disconnect your lines.
Speaker Change: Okay.
Speaker Change: [music].
Speaker Change: Okay.
Speaker Change: [music].