Q4 2025 Transcontinental Inc Earnings Call
Speaker #1: Pendant la discussion seulement, une période de conférence où tous les participants seront en mode questions suivra la présentation des directives. Vous serez informés à ce moment.
Speaker #1: Nous désirons vous rappeler que cette conférence est enregistrée aujourd'hui, le 11 décembre 2025. Welcome to the TC Transcontinental fourth quarter and fiscal year 2025 results conference call.
Speaker #1: 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.
Speaker #1: As a reminder, this conference is being recorded today, December 11, 2025. I would like to turn the conference over to Yan Lapointe, Senior Director, Investor Relations and Treasury.
Speaker #1: J'aimerais maintenant céder la parole à Yan Lapointe, Directeur Principal, Relations avec les Investisseurs et Trésorerie. Monsieur Lapointe, please go ahead.
Yan Lapointe: J'aimerais maintenant céder la parole à Yan Lapointe, Directeur Principal, Relations avec les Investisseurs et Trésorerie. Mr. Lapointe, please go ahead. Thank you, Joanne, and good morning, everyone on the call. Welcome to Transcontinental's Fourth Quarter and Fiscal 2025 Earnings Call. Before we begin, please note that you can find on our website our quarterly report, including financial statements and related notes, as well as the slides supporting management's remarks. A replay of this conference call will also be available on our website shortly after the call. Please note that this conference call is intended for the financial community. Media are in listen-only mode and should contact Laurence Boucicault, Senior Advisor, Corporate Communications, for more information. We have with us today our President and Chief Executive Officer, Thomas Morin, and our Executive Vice President and Chief Financial Officer, Donald LeCavalier.
Yan Lapointe: J'aimerais maintenant céder la parole à Yan Lapointe, Directeur Principal, Relations avec les Investisseurs et Trésorerie. Mr. Lapointe, please go ahead.
Yan Lapointe: Thank you, Joanne, and good morning, everyone on the call. Welcome to Transcontinental's Fourth Quarter and Fiscal 2025 Earnings Call. Before we begin, please note that you can find on our website our quarterly report, including financial statements and related notes, as well as the slides supporting management's remarks. A replay of this conference call will also be available on our website shortly after the call. Please note that this conference call is intended for the financial community. Media are in listen-only mode and should contact Laurence Boucicault, Senior Advisor, Corporate Communications, for more information. 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 #2: Good morning, everyone on the call. Welcome to Transcontinental's fourth quarter and fiscal 2025 earnings call. Thank you, Joelle. Before we begin, please note that you can find on our website our quarterly report, including financial statements and related remarks.
Speaker #2: Good morning, everyone on the call. Welcome to Transcontinental's fourth quarter and fiscal 2025 earnings call. Thank you, Joelle. Before we begin, please note that you can find our quarterly report, including financial statements and related remarks, on our website. The slides supporting management's remarks will also be available on our website, as well as the notes. A replay of this conference call will be available shortly after the call.
Speaker #2: Please note that this conference call is intended for the financial community. Media are in listen-only mode and should contact Laurence Boussicaut, Senior Advisor, Corporate Communications, for more information.
Speaker #2: We have with us today our President and Chief Executive Officer, Thomas Morin, and our Executive Vice President and Chief Financial Officer, Donald LeCavalier. As referenced on slide two, some of the financial measures discussed over the course of this conference call are non-IFRS.
Yan Lapointe: As referenced on Slide 2, some of the financial measures discussed over the course of this conference call are non-IFRS. You can refer to the MD&A for a complete definition and reconciliation of these measures to IFRS. In addition, this conference call might also contain forward-looking statements. These statements are based on the current expectations of management and information available as of today. Forward-looking statements also involve numerous risks and uncertainties, known and unknown. The risks, uncertainties, and other factors that could influence the actual results are described in the Fiscal 2025 Annual MD&A released yesterday and in the latest Annual Information Form. With that, I would turn the call over to our President and CEO, Thomas Morin. Thank you, Yan, and good morning to everyone. We spoke only a few days ago, so welcome again.
As referenced on Slide 2, some of the financial measures discussed over the course of this conference call are non-IFRS. You can refer to the MD&A for a complete definition and reconciliation of these measures to IFRS. In addition, this conference call might also contain forward-looking statements. These statements are based on the current expectations of management and information available as of today. Forward-looking statements also involve numerous risks and uncertainties, known and unknown. The risks, uncertainties, and other factors that could influence the actual results are described in the Fiscal 2025 Annual MD&A released yesterday and in the latest Annual Information Form. With that, I would turn the call over to our President and CEO, Thomas Morin.
Speaker #2: To the MD&A for a complete definition and reconciliation of these measures to IFRS. In addition, this conference call might also contain forward-looking statements.
Speaker #2: These statements are based on the current expectations of management and information available as of today. Forward-looking statements also involve numerous risks and uncertainties, known and unknown.
Speaker #2: The risks, uncertainties, and other factors that could influence the actual results are described in the fiscal 2025 annual MD&A released yesterday and in the latest annual information form.
Speaker #2: With that, I would turn the call over to our President and CEO.
Thomas Morin: Thank you, Yan, and good morning to everyone. We spoke only a few days ago, so welcome again.
Speaker #3: Thank you, Yan, and good morning to everyone. We spoke only a few days ago, so welcome again. This morning, we will review our Q4 and year-end results and provide an outlook for the new TC Transcontinental following the announcement of the sale of our packaging business, which is expected to close in the first quarter of calendar 2026.
Yan Lapointe: This morning, we will review our Q4 and year-end results and provide an outlook for the new TC Transcontinental following the announcement of the sale of our packaging business, which is expected to close in the first quarter of calendar 2026. 2025 was a year of tremendous progress on safety. The improved processes we put in place enabled us to reduce the number of accidents by an outstanding 39% year over year after a reduction of 9% between 2024 and 2023. I'm very proud of the work our packaging, retail services, and printing teams are getting us closer to our zero-injury vision. Once more, I'm pleased to report an improvement in our adjusted net earnings per share for the fourth consecutive quarter, resulting in a significant growth in net earnings per share of 10.7% for the fiscal year 2025.
This morning, we will review our Q4 and year-end results and provide an outlook for the new TC Transcontinental following the announcement of the sale of our packaging business, which is expected to close in the first quarter of calendar 2026. 2025 was a year of tremendous progress on safety. The improved processes we put in place enabled us to reduce the number of accidents by an outstanding 39% year over year after a reduction of 9% between 2024 and 2023. I'm very proud of the work our packaging, retail services, and printing teams are getting us closer to our zero-injury vision. Once more, I'm pleased to report an improvement in our adjusted net earnings per share for the fourth consecutive quarter, resulting in a significant growth in net earnings per share of 10.7% for the fiscal year 2025.
Speaker #3: 2025 was a year of tremendous progress on safety. The improved processes we put in place enabled us to reduce the number of accidents by an outstanding 39% year over year, following a reduction of 9% between 2024 and 2023.
Speaker #3: I'm very proud of the work our packaging, retail services, and printing teams have done in getting us closer to our zero-injury vision. Once more, I am pleased to report an improvement in our adjusted net earnings per share for the fourth consecutive quarter, resulting in a significant growth in net earnings per share of 10.7% for fiscal year 2025.
Speaker #3: The packaging sector's organic top-line growth in the fourth quarter is primarily driven by higher volumes. For the full year, packaging's adjusted EBITDA was up 3.7% over the previous year, when excluding the effect of the sale of industrial businesses.
Yan Lapointe: The packaging sector's organic top-line growth in the fourth quarter is primarily driven by higher volumes. For the full year, packaging's Adjusted EBITDA was up 3.7% over the previous year when excluding the effect of the sale of industrial businesses. In a weak demand environment, this result is primarily due to our cost-reduction initiatives and a favorable exchange rate. Turning to retail services and printing, after an excellent performance in the first nine months of the fiscal year, Q4 was a difficult quarter as a direct consequence of the labor conflict of Canada Post. Since last week, we're back to 4.8 million weekly copies of raddar distributed by Canada Post across Quebec and British Columbia, and we're exploring opportunities for our customers to expand raddar's geographical footprint this fiscal year 2026.
The packaging sector's organic top-line growth in the fourth quarter is primarily driven by higher volumes. For the full year, packaging's Adjusted EBITDA was up 3.7% over the previous year when excluding the effect of the sale of industrial businesses. In a weak demand environment, this result is primarily due to our cost-reduction initiatives and a favorable exchange rate. Turning to retail services and printing, after an excellent performance in the first nine months of the fiscal year, Q4 was a difficult quarter as a direct consequence of the labor conflict of Canada Post. Since last week, we're back to 4.8 million weekly copies of raddar distributed by Canada Post across Quebec and British Columbia, and we're exploring opportunities for our customers to expand raddar's geographical footprint this fiscal year 2026.
Speaker #3: In a weak demand environment, this result is primarily due to our cost reduction initiatives and a favorable exchange rate. Turning to retail services and printing, after an excellent performance in the first nine months of the fiscal year, Q4 was a difficult quarter as a direct consequence of the labor conflict of Canada Post.
Speaker #3: Since last week, we backed to 4.8 million weekly copies of Radar distributed by Canada Post across Quebec and British Columbia, and we're exploring opportunities for our customers to expand Radar's geographical footprint.
Speaker #3: Fiscal Year 2026. Turning to our newspaper printing business, we're pleased with the 10-year extension of our printing agreement with The Globe and Mail, announced yesterday.
Yan Lapointe: Turning to our newspaper printing business, we're pleased with the 10-year extension of our printing agreement with The Globe and Mail, announced yesterday. Our partnership with The Globe and Mail is the longest-standing partnership in Canadian newspaper printing, with a collaboration that spans 40 years. Through four decades, both organizations have consistently invested in improving capabilities and expertise to maintain exceptional performance. And as mentioned by Andrew Saunders, the Globe's CEO, print is viewed today as a powerful and trusted medium in the media landscape. In Q4, we've also been able to renew multi-year contracts with major retailers for an expanded range of services, from flyers to in-store marketing to content solutions. Q4 was also marked by the acquisitions of Mirazed and Intergraphics, right on the heels of the acquisition of Middleton in Q3.
Turning to our newspaper printing business, we're pleased with the 10-year extension of our printing agreement with The Globe and Mail, announced yesterday. Our partnership with The Globe and Mail is the longest-standing partnership in Canadian newspaper printing, with a collaboration that spans 40 years. Through four decades, both organizations have consistently invested in improving capabilities and expertise to maintain exceptional performance. And as mentioned by Andrew Saunders, the Globe's CEO, print is viewed today as a powerful and trusted medium in the media landscape. In Q4, we've also been able to renew multi-year contracts with major retailers for an expanded range of services, from flyers to in-store marketing to content solutions. Q4 was also marked by the acquisitions of Mirazed and Intergraphics, right on the heels of the acquisition of Middleton in Q3.
Speaker #3: Our partnership with the Globe and Mail is the longest-standing partnership in Canadian newspaper printing, with a collaboration that spans 40 years. Through four decades, both organizations have consistently invested in improving capabilities and expertise to maintain exceptional performance.
Speaker #3: Mentioned by Andrew Sanders, the Globe's as a powerful and trusted medium in the media landscape. In Q4, we've also been able to renew multi-year contracts with major retailers for an expanded range of services, from flyers to install marketing to content solutions.
Speaker #3: Q4 was also marked by the acquisitions of Mirazel and Intergraphics, right on the heels of the acquisition of Middleton in Q3. We are pleased with this achievement, which brings our ISM business close to $300 million in revenue.
Yan Lapointe: We are pleased with this achievement, which brings our ISM business close to $300 million in revenue. For the full year, our Adjusted EBITDA for the sector was stable compared to the previous year, despite the Canada Post situation. In summary, we delivered a solid financial performance in 2025. This was largely due to our discipline in implementing our priorities and controlling our costs. As discussed on Monday, our robust financials put us in a favorable position to begin an exciting new chapter in the history of TC Transcontinental. Over to you, Donald. Thank you, Thomas, and good morning, everyone. Moving to Slide 5 of the earnings call presentation. For the fourth quarter, we reported revenues of $732.4 million, a 2.3% decrease versus last year. This decline was caused by lower volume in the retail services and printing sector and the impact of the sale of the industrial packaging operations.
We are pleased with this achievement, which brings our ISM business close to $300 million in revenue. For the full year, our Adjusted EBITDA for the sector was stable compared to the previous year, despite the Canada Post situation. In summary, we delivered a solid financial performance in 2025. This was largely due to our discipline in implementing our priorities and controlling our costs. As discussed on Monday, our robust financials put us in a favorable position to begin an exciting new chapter in the history of TC Transcontinental. Over to you, Donald.
Speaker #3: For the full year, our adjusted EBITDA for the sector was stable compared to the previous year, despite the Canada Post situation. In summary, we delivered a solid financial performance in 2025.
Speaker #3: This was our priority, largely due to our discipline in implementing costs. As discussed on Monday, our robust financials put us in a favorable position to begin an exciting new chapter in the history of TC Transcontinental.
Speaker #3: Over to you, Donald.
Donald LeCavalier: Thank you, Thomas, and good morning, everyone. Moving to Slide 5 of the earnings call presentation. For the fourth quarter, we reported revenues of $732.4 million, a 2.3% decrease versus last year. This decline was caused by lower volume in the retail services and printing sector and the impact of the sale of the industrial packaging operations.
Speaker #4: You, Thomas, and good morning, everyone. Moving to slide five of the Q4 2025 earnings call presentation. For the fourth quarter, we reported revenues of $732.4 million, a 2.3% decrease versus last year.
Speaker #4: was caused by lower volume in the retail services and printing sector. This decline impacted the sale of the industrial packaging operations.
Speaker #4: It was partially offset by the recent acquisitions in ISM, higher volume in the packaging sector, and a positive exchange rate impact. Regarding profitability, adjusted EBITDA decreased by 3.2% to $137.6 million.
Yan Lapointe: It was partially offset by the recent acquisitions in ISM, higher volume in the packaging sector, and a positive exchange rate impact. Regarding profitability, Adjusted EBITDA decreased by 3.2% to CAD 137.6 million. This decrease is mainly due to lower volume in the retail services and printing sector, caused in part by the effect of the labor conflict at Canada Post. Financial expense decreased by CAD 3.1 million, mainly due to a lower debt level following strong cash flow generation in the last 12 months. Adjusted income tax decreased by CAD 2.2 million to CAD 19.4 million and represented an effective rate of 22%. This led to an Adjusted earnings per share of CAD 0.82, a 3.8% improvement compared to CAD 0.78 for the same quarter last year. On a full-year basis, Adjusted earnings per share grew by 10.7%, mainly due to improved profitability and lower share count.
It was partially offset by the recent acquisitions in ISM, higher volume in the packaging sector, and a positive exchange rate impact. Regarding profitability, Adjusted EBITDA decreased by 3.2% to CAD 137.6 million. This decrease is mainly due to lower volume in the retail services and printing sector, caused in part by the effect of the labor conflict at Canada Post. Financial expense decreased by CAD 3.1 million, mainly due to a lower debt level following strong cash flow generation in the last 12 months. Adjusted income tax decreased by CAD 2.2 million to CAD 19.4 million and represented an effective rate of 22%. This led to an Adjusted earnings per share of CAD 0.82, a 3.8% improvement compared to CAD 0.78 for the same quarter last year. On a full-year basis, Adjusted earnings per share grew by 10.7%, mainly due to improved profitability and lower share count.
Speaker #4: This decrease is mainly due to lower volume in the retail services and printing sector, caused in part by the effect of the labor conflict at Canada Post.
Speaker #4: Million mainly due to a lower debt financial level following strong cash flow generation in the last 12 months. Income tax decreased by $2.2 million, adjusted to $19.4 million, and represented an effective rate of 22%.
Speaker #4: Earnings per share of $0.82 at a 3.8% improvement led to an adjusted $0.82 compared to $0.78 for the same quarter last year. On a full-year basis, adjusted earnings per share grew by 10.7% mainly due to improved profitability and lower share compensation.
Speaker #4: Now moving to slide six for the sector review. In packaging, we generated organic revenue growth of 2.8%, mainly due to volume, and this was more than offset by the impact of the sale of the industrial packaging activities in November 2024.
Yan Lapointe: Now, moving to Slide 6 for the sector review. In packaging, we generated organic revenue growth of 2.8% in the quarter. This was mainly due to volume and was more than offset by the impact of the sale of the industrial packaging activities in November 2024. In terms of profitability, adjusted EBITDA in packaging grew by 3.3% to CAD 67.9 million. Margins increased by 60 basis points to 16.4%. Following the announcement of the sale of the packaging sector earlier this week, we will disclose the sector as discontinued operations in the first quarter of fiscal 26. Moving to retail services and printing sector on Slide 7. After a solid performance for the first three quarters of fiscal 25, the results of the fourth quarter were significantly impacted by the Canada Post labor conflict. Revenues decreased by 4.3% to CAD 275.9 million.
Now, moving to Slide 6 for the sector review. In packaging, we generated organic revenue growth of 2.8% in the quarter. This was mainly due to volume and was more than offset by the impact of the sale of the industrial packaging activities in November 2024. In terms of profitability, adjusted EBITDA in packaging grew by 3.3% to CAD 67.9 million. Margins increased by 60 basis points to 16.4%. Following the announcement of the sale of the packaging sector earlier this week, we will disclose the sector as discontinued operations in the first quarter of fiscal 26. Moving to retail services and printing sector on Slide 7. After a solid performance for the first three quarters of fiscal 25, the results of the fourth quarter were significantly impacted by the Canada Post labor conflict. Revenues decreased by 4.3% to CAD 275.9 million.
Speaker #4: In terms of profitability, adjusted EBITDA in packaging grew by 3.3% to $67.9 million. Margins increased by 60 basis points to 16.4%. Following the announcement of the sale of the packaging sector earlier this week, we will disclose the sector as discontinued operations in the first quarter of fiscal 2026.
Speaker #4: Moving to retail services and the printing sector on slide seven. After a solid performance for the first three quarters of fiscal 2025, the results of the fourth quarter were significantly impacted by the Canada Post labor conflict.
Speaker #4: Revenues decreased by 4.3% to $275.9 million. Adjusted EBITDA decreased by $9.5 million, or 14.9%, to $54.1 million. The decrease in revenues and adjusted EBITDA is mainly due to lower volumes from flyer printing activities, as they were impacted by Canada Post's disruption.
Yan Lapointe: Adjusted EBITDA decreased by 9.5 million, or 14.9%, to $54.1 million. The decrease in revenues and adjusted EBITDA are mainly due to lower volumes for flyer printing activities as they were impacted by Canada Post disruption. Now, turning to cash flow. As expected and in line with normal seasonality, the fourth quarter of Fiscal 2025 was a strong quarter. We generated $172.5 million from operating activities compared to $185 million in the previous year. We had a positive working capital of $64.9 million, offsetting a large portion of the working capital usage of the first nine months of the year. Our CapEx at $23.3 million were in line with last year to bring us to a full-year total close to $100 million, a $22 million reduction versus last year.
Adjusted EBITDA decreased by 9.5 million, or 14.9%, to $54.1 million. The decrease in revenues and adjusted EBITDA are mainly due to lower volumes for flyer printing activities as they were impacted by Canada Post disruption. Now, turning to cash flow. As expected and in line with normal seasonality, the fourth quarter of Fiscal 2025 was a strong quarter. We generated $172.5 million from operating activities compared to $185 million in the previous year. We had a positive working capital of $64.9 million, offsetting a large portion of the working capital usage of the first nine months of the year. Our CapEx at $23.3 million were in line with last year to bring us to a full-year total close to $100 million, a $22 million reduction versus last year.
Speaker #4: Now turning to cash flow. As expected, and in line with normal seasonalities, the fourth quarter of fiscal 2025 was a strong quarter. We generated $172.5 million from operating activities, compared to $185 million in the previous year.
Speaker #4: We had a positive working capital of $64.9 million, offsetting a large portion of the working capital usage for the first nine months of the year.
Speaker #4: Our CAPEX of $23.3 million was in line with last year, bringing us to a full-year total close to $100 million, reflecting a $22 million reduction versus last year.
Speaker #4: Despite our recent acquisitions in ISM, we continue to improve our net debt ratio to reach 1.59 times at the end of the fiscal year, compared to 1.68 times three months ago.
Yan Lapointe: Despite our recent acquisitions in ISM, we continue to improve our net debt ratio to reach 1.59 times at the end of fiscal year compared to 1.68 times three months ago. Moving to the sale of our packaging assets, we expect the transaction to close in the first quarter of calendar 2026. We plan to use the proceeds from the transaction for an approximately CAD 20 per share distribution to shareholders. In addition, net of transaction fees, we will use the majority of the remaining proceeds to reduce our net debt. We expect a pro forma net debt of about 1.7 times post-transaction. In terms of outlook for 2026, on the upside, we expect growth in our ISM activities organically and with the impact of our acquisitions. Also, the impact of the Canada Post labor conflict should be limited to our first five weeks of the first quarter of fiscal 2026.
Despite our recent acquisitions in ISM, we continue to improve our net debt ratio to reach 1.59 times at the end of fiscal year compared to 1.68 times three months ago. Moving to the sale of our packaging assets, we expect the transaction to close in the first quarter of calendar 2026. We plan to use the proceeds from the transaction for an approximately CAD 20 per share distribution to shareholders. In addition, net of transaction fees, we will use the majority of the remaining proceeds to reduce our net debt. We expect a pro forma net debt of about 1.7 times post-transaction. In terms of outlook for 2026, on the upside, we expect growth in our ISM activities organically and with the impact of our acquisitions. Also, the impact of the Canada Post labor conflict should be limited to our first five weeks of the first quarter of fiscal 2026.
Speaker #4: Moving to the sale of our packaging assets, we expect the quarter of calendar transaction to close in the first quarter of 2026. We plan to use the proceeds from the transaction for an approximately $20 per share distribution to shareholders.
Speaker #4: In addition, net of transaction fees, we will use the majority of the remaining proceeds to reduce our net debt. We expect a pro forma net debt of about 1.7 times post-transaction.
Speaker #4: In terms of outlook for 2026, on the upside, we expect growth in our ISM activities, organically, and with the impact of our acquisitions. Also, the impact of the Canada Post labor conflict should be limited to our first five weeks of the first quarter of fiscal 2026.
Speaker #4: We also expect growth in our media business. We will align our corporate costs with the size of our business, as we have always done. We have always done.
Yan Lapointe: We also expect growth in our media business. We will align our corporate costs with the size of our business, as we have always done. The 2026 corporate expenses will depend on the date of closing. While we expect to reach a lower run rate in the second half of fiscal year, you can expect to see the full impact of the cost reduction in Fiscal 2027. On the downside, we expect lower volume in our traditional activities, including book printing, that add a very strong Fiscal 2025. As a result of these considerations, we expect to deliver a stable Adjusted EBITDA in Fiscal 2026 compared to 2025. In terms of capital allocation, we expect CapEx for remaining business to be around CAD 60 million in Fiscal 2026. As for cash taxes, they should be around CAD 30 million in Fiscal 2026.
We also expect growth in our media business. We will align our corporate costs with the size of our business, as we have always done. The 2026 corporate expenses will depend on the date of closing. While we expect to reach a lower run rate in the second half of fiscal year, you can expect to see the full impact of the cost reduction in Fiscal 2027. On the downside, we expect lower volume in our traditional activities, including book printing, that add a very strong Fiscal 2025. As a result of these considerations, we expect to deliver a stable Adjusted EBITDA in Fiscal 2026 compared to 2025. In terms of capital allocation, we expect CapEx for remaining business to be around CAD 60 million in Fiscal 2026. As for cash taxes, they should be around CAD 30 million in Fiscal 2026.
Speaker #4: The 2026 corporate expenses will depend on the date of closing. While we expect to reach a lower run rate in the second half of fiscal year, you can expect to see the full impact of the cost reduction in fiscal 2027.
Speaker #4: On the downside, we expect lower volume in our traditional activities, including book printing, which had a very strong fiscal 2025. As a result of these considerations, we expect to deliver a stable adjusted EBITDA in fiscal 2026 compared to 2025.
Speaker #4: In terms of capital allocation, we expect CAPEX for the remaining business to be around $60 million in fiscal year 2026. As for cash taxes, they should be around $30 million in fiscal year 2026.
Speaker #4: On that note, we will now proceed with the question period.
Yan Lapointe: On that note, we will now proceed with the question period. Merci, Mesdames et Messieurs. Nous allons maintenant procéder à la période de questions et réponses. Si vous avez une question, veuillez appuyer sur les touches étoilées suivies du 1 sur votre téléphone à clavier. Une tonalité se fera entendre confirmant votre demande. Les questions seront prises dans l'ordre qu'elles auront été acheminées. Veuillez également vous assurer de décrocher le récepteur de votre appareil téléphonique si vous utilisez la fonction main libre avant d'appuyer sur les touches. Un moment s'il vous plaît pour la première question. Thank you. One moment, please. Ladies and gentlemen, we will now conduct the 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.
On that note, we will now proceed with the question period.
Operator: Merci, Mesdames et Messieurs. Nous allons maintenant procéder à la période de questions et réponses. Si vous avez une question, veuillez appuyer sur les touches étoilées suivies du 1 sur votre téléphone à clavier. Une tonalité se fera entendre confirmant votre demande. Les questions seront prises dans l'ordre qu'elles auront été acheminées. Veuillez également vous assurer de décrocher le récepteur de votre appareil téléphonique si vous utilisez la fonction main libre avant d'appuyer sur les touches. Un moment s'il vous plaît pour la première question. Thank you. One moment, please. Ladies and gentlemen, we will now conduct the 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.
Speaker #1: Merci, Madame et Monsieur. Nous allons maintenant procéder à la période de questions et réponses. Si vous avez une question, veuillez appuyer sur les touches étoilées suivies du 1 sur votre téléphone à clavier.
Speaker #1: Une tonalité se fera entendre confirmant votre demande. Les questions seront prises dans l'ordre qu'elles auront été acheminées. Veuillez également vous assurer de décrocher le récepteur de votre appareil téléphonique si vous utilisez la fonction « mains libres » avant d'appuyer sur les touches.
Speaker #1: Un moment, s'il vous plaît pour la première question. Thank you. One moment, please. Ladies and gentlemen, we will now conduct the question-and-answer session.
Speaker #1: If you have a question, please press star followed by the one on your touchtone phone. You will hear a tone acknowledging your request. Your questions will be pulled in the order they are received.
Speaker #1: Please ensure you lift a hand up before using your speakerphone before pressing any keys. One moment, please, for your first question. Your first question comes from Adam Shinewood, National Bank Financial.
Yan Lapointe: Please ensure you lift the handset up before using your speakerphone before pressing any keys. One moment, please, for your first question. Your first question comes from Adam Shine with National Bank Financial. Votre première question vient de Monsieur Adam Shine avec National Bank Financial. Okay, good morning. Maybe let's start with Thomas. On book printing, the indication in Q4 was that it was just slightly lower. So can you maybe speak to whether you were still seeing volumes from that US outsourcing customer? And as much as the outlook, as Donald referenced, suggests that book printing does face a tough comp and could be lower, any particular optimism in regards to how that particular customer continues with you and/or opportunities, given where FX continues to stand to pursue other outsourcing opportunities in book? And then I'll just follow up with another question. Sure. Good morning, Adam.
Please ensure you lift the handset up before using your speakerphone before pressing any keys. One moment, please, for your first question. Your first question comes from Adam Shine with National Bank Financial. Votre première question vient de Monsieur Adam Shine avec National Bank Financial.
Speaker #1: Votre première question vient de M. Adam Shine avec la Banque Nationale.
Speaker #1: Financial. Okay, good morning.
Adam Shine: Okay, good morning. Maybe let's start with Thomas. On book printing, the indication in Q4 was that it was just slightly lower. So can you maybe speak to whether you were still seeing volumes from that US outsourcing customer? And as much as the outlook, as Donald referenced, suggests that book printing does face a tough comp and could be lower, any particular optimism in regards to how that particular customer continues with you and/or opportunities, given where FX continues to stand to pursue other outsourcing opportunities in book? And then I'll just follow up with another question.
Speaker #2: Maybe let's start with Tamar on book printing. The indication in Q4 was that it was just slightly lower, so can you maybe speak to whether you were still seeing volumes from that U.S.
Speaker #2: Outsourcing customer, and you know, in as much as the outlook as Donald referenced, you know, suggests that book printing does face a tough comp and, you know, could be lower. Any particular optimism in regards to how that particular customer continues with you and/or opportunities given where FX continues to stand to pursue, you know, other outsourcing opportunities in book?
Speaker #2: And then I'll just follow up with another question.
Thomas Morin: Sure. Good morning, Adam.
Speaker #3: Sure, and good morning, Adam. So we had, as you know, a pretty good year in 2025 in book, and this was mainly due to what you mentioned.
Yan Lapointe: So we had, as you know, a pretty good year 2025 in book. This was mainly due to what you mentioned. In other words, getting shares and getting businesses in the United States, leveraging on the exchange rate. This is unwinding as we speak. We had a couple of nice good contracts which are coming to an end. That's explaining why the volumes start to go down and why the outlook for next year is not as good as this one. Now, that being said, the team has started already and early on this year to develop a long list of prospection and business development in the United States. So it's a bit too early to say, but what I can tell you is that the team has been extremely active in identifying leads, and we expect some of these leads to unwind in 2026. Yeah.
So we had, as you know, a pretty good year 2025 in book. This was mainly due to what you mentioned. In other words, getting shares and getting businesses in the United States, leveraging on the exchange rate. This is unwinding as we speak. We had a couple of nice good contracts which are coming to an end. That's explaining why the volumes start to go down and why the outlook for next year is not as good as this one. Now, that being said, the team has started already and early on this year to develop a long list of prospection and business development in the United States. So it's a bit too early to say, but what I can tell you is that the team has been extremely active in identifying leads, and we expect some of these leads to unwind in 2026. Yeah.
Speaker #3: In other words, gaining shares and acquiring businesses in the United States, leveraging the exchange rate. This is unwinding as we speak. We had a couple of nice contracts that are coming to an end.
Speaker #3: What that explains is why the volumes start to go down and why the outlook for next year is not as good as this one.
Speaker #3: Now, that being said, the team has already started, and earlier on this year, to develop a long list of prospection and business development in the United States.
Speaker #3: So, it's a bit too early to say, but what I can tell you is that the team has been extremely active in identifying leads, and we expect some of these leads to unwind in.
Speaker #3: 2026. Yeah, and just
Yan Lapointe: Just to add on Thomas' comments regarding your question, I think what's linked for us, Adam, as you know, is we're still close, well, this morning at 138. One of the reasons we were able to gain new business last year was the fact that about the same time last year, we were at 140. And actually, the big contract that we won was in that period last year, early 2025. So therefore, we're confident, but we said it in a couple of calls earlier. That was a big one-timer, very positive for us. So this is why in the forecast, we remain confident, but we say it might be a decrease. Okay. Pivoting to in-store marketing, obviously, you guys have been pretty excited about this, not just in F25, but in prior years. Can you maybe talk, Thomas, to the scope of the opportunity?
Speaker #4: To add on to Thomas's comments regarding your question, I think what's playing for us, Adam, as you know, is we're still closed while this morning at 1:38. One of the reasons we were able to gain new business last year was the fact that about the same time last year, we were at 1:40.
Donald LeCavalier: Just to add on Thomas' comments regarding your question, I think what's linked for us, Adam, as you know, is we're still close, well, this morning at 138. One of the reasons we were able to gain new business last year was the fact that about the same time last year, we were at 140. And actually, the big contract that we won was in that period last year, early 2025. So therefore, we're confident, but we said it in a couple of calls earlier. That was a big one-timer, very positive for us. So this is why in the forecast, we remain confident, but we say it might be a decrease.
Speaker #4: And actually, the big contract that we won was in that period last year, early 2025. Therefore, we're confident, but we said it in a couple of calls earlier that it was a big one-timer, very positive for us.
Speaker #4: So this is why, in the forecast, we remain confident, but we say it might be a decrease.
Adam Shine: Okay. Pivoting to in-store marketing, obviously, you guys have been pretty excited about this, not just in F25, but in prior years. Can you maybe talk, Thomas, to the scope of the opportunity?
Speaker #2: Okay, and then pivoting to in-store marketing, obviously, you guys have been pretty excited about this, not just in Q4 2025, but in prior years. Can you maybe talk, Tamar, to the scope of the opportunity?
Yan Lapointe: I think you're continuing to look at strategic acquisitions in ISM. Is there a particular objective in mind in terms of level of sales by the end of this year or perhaps over the course of the next two, three years? Yeah. So ISM had actually a pretty good Q4. I think the top line grew organically by 1.8%, and on top of which comes the acquisitions. This segment is still extremely fragmented, Adam. So there are a lot of small companies we have identified who have a long pipeline of opportunities. There is, as we speak, two acquisitions ongoing, and we expect to close one and maybe two within the next two quarters. We don't have yet a full target for this segment. I mean, I think we need to continue to integrate those businesses and deliver the value from these acquisitions.
I think you're continuing to look at strategic acquisitions in ISM. Is there a particular objective in mind in terms of level of sales by the end of this year or perhaps over the course of the next two, three years?
Speaker #2: At, you know, strategic acquisitions in, I think you're continuing to look, ISM. Is there a particular objective in mind in terms of, you know, level of sales by the end of this year or perhaps over the course of the next two, three?
Speaker #4: Yeah, so ISM had
Thomas Morin: Yeah. So ISM had actually a pretty good Q4. I think the top line grew organically by 1.8%, and on top of which comes the acquisitions. This segment is still extremely fragmented, Adam. So there are a lot of small companies we have identified who have a long pipeline of opportunities. There is, as we speak, two acquisitions ongoing, and we expect to close one and maybe two within the next two quarters. We don't have yet a full target for this segment. I mean, I think we need to continue to integrate those businesses and deliver the value from these acquisitions.
Speaker #4: Actually, a pretty good Q4. I think the top line grew organically by 1.8%, and on top of which come the acquisitions. The segment is still extremely fragmented, Adam.
Speaker #4: So, there are a lot of small companies we have identified that have a long pipeline of opportunities. There are, as we speak, two acquisitions ongoing, and we expect to close one and maybe two within the next two quarters.
Speaker #4: We don't have yet a full target for this segment. I mean, I think we need to continue integrating those businesses and deliver the value from these acquisitions, but definitely, there are a lot of opportunities from coast to coast in this segment.
Yan Lapointe: But definitely, there are a lot of opportunities from coast to coast in this segment. Okay. Thank you very much. I'll leave it at that. Thank you. La prochaine question vient de Sean Stewart avec TD Cowen. Your next question comes from Sean Stewart with TD Cowen. Your line is now open. Thank you. Good morning. Question pulling apart the 2026 guidance for flat EBITDA for the continuing operations. And you addressed some of it in your comments in the previous question. But buried within the flat EBITDA guidance, can you speak to organic revenue growth expectations for ISM and some of the other bespoke growth businesses versus what you would expect in the legacy printing? Just trying to understand some of the puts and takes and overall organic growth expectations. Yeah. In terms of organic growth in fiscal 2026, we definitely see ISM.
But definitely, there are a lot of opportunities from coast to coast in this segment. Okay. Thank you very much. I'll leave it at that.
Speaker #2: Okay, thank you very much. I'll leave it at that.
Operator: Thank you. La prochaine question vient de Sean Stewart avec TD Cowen. Your next question comes from Sean Stewart with TD Cowen. Your line is now open.
Speaker #4: Thank you.
Speaker #1: La prochaine question
Speaker #1: vient de Sean Stewart avec TD Cowan. Your next question comes from Sean Stewart with TD Cowan. Your line is now
Speaker #1: open. Thank
Sean Steuart: Thank you. Good morning. Question pulling apart the 2026 guidance for flat EBITDA for the continuing operations. And you addressed some of it in your comments in the previous question. But buried within the flat EBITDA guidance, can you speak to organic revenue growth expectations for ISM and some of the other bespoke growth businesses versus what you would expect in the legacy printing? Just trying to understand some of the puts and takes and overall organic growth expectations
Speaker #5: You, good morning. Question pulling apart the 2026 guidance for flat EBITDA for the continuing operations. Can you address some of it in your comments in the previous question?
Speaker #5: But buried within the flat EBITDA guidance, can you speak to organic revenue growth expectations for ISM and some of the other bespoke growth businesses versus what you would expect in the legacy printing? I'm just trying to understand some of the puts and takes and overall organic growth expectations.
Thomas Morin: . Yeah. In terms of organic growth in fiscal 2026, we definitely see ISM.
Speaker #4: Yeah, we could, you know, in terms of organic growth and fiscal 2026, we definitely see ISM. Obviously, the impact of acquisition will bring growth for sure.
Yan Lapointe: Obviously, the impact of acquisition will bring growth for sure. And we see this growth bring this group still continues to bring organic growth. We see opportunities with the acquisition we have done to even increase the product that we sell to our current clients. But that will be impacted by what we call the traditional. So, raddar is being stabilized, the flyer market in Quebec, but we need to stabilize the rest of Canada. Raddar right now is in Quebec and BC. And we're right now facing some decrease in the flyer market in the rest of Canada. And also, there's the book impact we just mentioned.
Obviously, the impact of acquisition will bring growth for sure. And we see this growth bring this group still continues to bring organic growth. We see opportunities with the acquisition we have done to even increase the product that we sell to our current clients. But that will be impacted by what we call the traditional. So, raddar is being stabilized, the flyer market in Quebec, but we need to stabilize the rest of Canada. Raddar right now is in Quebec and BC. And we're right now facing some decrease in the flyer market in the rest of Canada. And also, there's the book impact we just mentioned.
Speaker #4: And we see this growth bringing, you know, this group still continuing to bring organic growth. We see opportunities with the acquisition we have done to even increase the product that we sell to our current clients.
Speaker #4: But that will be impacted, you know, by what we call the traditional. So, radar is being stabilized, the flyer market in Quebec, but we need to stabilize the rest of Canada. Radar right now is in Quebec and BC.
Speaker #4: And we're currently facing a decrease in the flyer market in the rest of Canada. Additionally, there's the book impact we just mentioned.
Speaker #4: So, as we said in the call on Monday, we're still, you know, slightly decreasing if you look at net organic growth, but we're getting closer to where the groups that are growing, either ISM or even compensating for the decrease of the more book, that we think might be an opportunity with traditional.
Yan Lapointe: So as we said in the call on Monday, we're still; it's slightly decreasing if you look at net net organic growth, but we're getting closer where the group that are growing either ISM or even book that we think that might be opportunity will compensate for the decrease of the more traditional activities. Okay. And with respect to the corporate cost savings, if this transaction closes calendar Q1, I think the indication was you expect corporate costs to be halved over time. Can we assume sort of half of that half is in fiscal 2026? What's reflected in the overall EBITDA guide with respect to corporate cost reduction? Yeah. We've been prudent regarding the guidance.
So as we said in the call on Monday, we're still; it's slightly decreasing if you look at net net organic growth, but we're getting closer where the group that are growing either ISM or even book that we think that might be opportunity will compensate for the decrease of the more traditional activities.
Speaker #4: activities. Okay.
Sean Steuart: Okay. And with respect to the corporate cost savings, if this transaction closes calendar Q1, I think the indication was you expect corporate costs to be halved over time. Can we assume sort of half of that half is in fiscal 2026? What's reflected in the overall EBITDA guide with respect to corporate cost reduction?
Speaker #2: And with respect to the corporate cost savings, you know, if this transaction closes in calendar Q1, I think the indication was you expect corporate costs to be halved over time.
Speaker #2: Can we assume sort of half of that half is in fiscal 2026? What's reflected in the overall EBITDA guide with respect to corporate cost reduction?
Thomas Morin: Yeah. We've been prudent regarding the guidance.
Speaker #4: Yeah, we've been prudent regarding the guidance when we say we should remain flat is that, you know, the RSNP will probably, because of what I said, you know, net of acquisition might be negative because of this decrease in book and book for following a very strong year.
Yan Lapointe: When we say we should remain flat, is that the RS&P will probably, because of what I said, net of acquisition might be negative because of this decrease in book and book for following a very strong year. But we're proactive as we speak. We're always being proactive, obviously, as to let go cost to adjust the structure. But too early to tell because there's timing, but we're confident that at the end of fiscal year, we will be able to remain flat and we will take all the action to protect that. Okay. Okay. That's all I have for now. Thank you. Thank you. La prochaine question vient de Stephen MacLeod avec BMO Capital Markets. Your next question comes from Stephen MacLeod with BMO Capital Markets. Your line is now open. Thank you. Good morning. Morning, everyone.
When we say we should remain flat, is that the RS&P will probably, because of what I said, net of acquisition might be negative because of this decrease in book and book for following a very strong year. But we're proactive as we speak. We're always being proactive, obviously, as to let go cost to adjust the structure. But too early to tell because there's timing, but we're confident that at the end of fiscal year, we will be able to remain flat and we will take all the action to protect that.
Speaker #4: But we're proactive as we speak. We've always been proactive; obviously, you know, it's about letting go costs to adjust the structure. But it's too early to tell because there's timing involved. However, we're confident that at the end of the fiscal year, we will be able to remain flat, and we will take all the actions necessary to protect that.
Sean Steuart: Okay. Okay. That's all I have for now. Thank you.
Speaker #2: Okay. Okay, that's all I have for now. Thank you.
Thomas Morin: Thank you.
Speaker #4: Thank
Operator: La prochaine question vient de Stephen MacLeod avec BMO Capital Markets. Your next question comes from Stephen MacLeod with BMO Capital Markets. Your line is now open.
Speaker #1: La, you. La prochaine question vient de Steven McLeod avec BMO Capital Markets. Your next question comes from Steven McLeod with BMO Capital Markets. Your line is now.
Speaker #1: open. Thank you, good
Stephen MacLeod: Thank you. Good morning. Morning, everyone.
Speaker #6: Morning, morning everyone. Just wanted to drill down a little bit on ISM and maybe the outlook for 2026 and beyond. Can you just remind us kind of what the underlying organic growth rate is within that business?
Yan Lapointe: Just wanted to drill down a little bit on ISM and maybe the outlook for 2026 and beyond. Can you just remind us kind of what the underlying growth rate, organic growth rate is within that business? And do you have an estimate of what your market share might be in that segment? And then, I guess, thirdly, are there any other, I know it's very fragmented, but are there any other sort of larger or medium-sized players that were you to do an acquisition, it would be more additive to sales than perhaps a tuck-in or something like that? Yeah. So the organic growth for ISM is around 2% if we look at it from a 12-month standpoint. As I said, there is a long list of small businesses. I'm talking about businesses about CAD 20 to 40 million altogether.
Just wanted to drill down a little bit on ISM and maybe the outlook for 2026 and beyond. Can you just remind us kind of what the underlying growth rate, organic growth rate is within that business? And do you have an estimate of what your market share might be in that segment? And then, I guess, thirdly, are there any other, I know it's very fragmented, but are there any other sort of larger or medium-sized players that were you to do an acquisition, it would be more additive to sales than perhaps a tuck-in or something like that?
Speaker #6: And do you have an estimate of what your market share might be in that segment? And then I guess, thirdly, are there any other, I know it's very fragmented, but are there any other sort of larger or medium-sized players that, you know, were you to do an acquisition, it would, you know, be more additive to sales than perhaps a tuck-in or something like that?
Thomas Morin: Yeah. So the organic growth for ISM is around 2% if we look at it from a 12-month standpoint. As I said, there is a long list of small businesses. I'm talking about businesses about CAD 20 to 40 million altogether.
Speaker #4: Yeah, so the organic growth for ISM is around 2% if we look at it from a 12-month standpoint. As I said, there is a long, long list of small businesses.
Speaker #4: I'm talking about businesses worth $20 million to maybe $40 million altogether. There are a couple of larger players in Canada, but there is a long, long, long tail, obviously.
Yan Lapointe: There are a couple of larger players in Canada, but there is a long, long tail, obviously. I think your question is around what is the overall target of the share of wallet we would have. Difficult to say given this fragmentation of the market, but I would say it's probably in the 20-ish% max at this point in time. Okay. That's good color. Thank you, Thomas. And then maybe just more of like a housekeeping question, but once the packaging sale is done, completed in Q1, will you be breaking out corporate costs from within your other segments so we can see how that moves in isolation? Yeah. That's a very good question. Actually, something that we're working on, and we will be proactive to update the market regarding that.
There are a couple of larger players in Canada, but there is a long, long tail, obviously. I think your question is around what is the overall target of the share of wallet we would have. Difficult to say given this fragmentation of the market, but I would say it's probably in the 20-ish% max at this point in time.
Speaker #4: I think your question is around what the overall target of the share of wallet we would have. It's difficult to say given this fragmentation of the market, but I would say it's probably in the 20% range.
Speaker #4: Max, at this point in time.
Stephen MacLeod: Okay. That's good color. Thank you, Thomas. And then maybe just more of like a housekeeping question, but once the packaging sale is done, completed in Q1, will you be breaking out corporate costs from within your other segments so we can see how that moves in isolation?
Speaker #6: You, Thomas. And then maybe just more of like a housekeeping question. Okay, that's good color. Thank you. But once the packaging sale is done, completed in Q1, will you be breaking out corporate costs from within your other segments?
Speaker #6: So we can see how that moves in.
Speaker #6: isolation?
Thomas Morin: Yeah. That's a very good question. Actually, something that we're working on, and we will be proactive to update the market regarding that.
Speaker #4: Yeah, that's a very good question.
Speaker #4: And actually, something that we're working on, and we will be proactive in updating the market regarding that. But we're not done yet with how we will present the results, but you can expect that we will certainly present it in a different way.
Yan Lapointe: But we're not done yet how we will present the result, but you can expect that we will certainly present it a different way. The corporate costs, if you look at what will remain as a new company, it will be probably more as a one group with different segments. So that's something that we're working on as we speak. Yeah. Yeah. Okay. Okay. That's great. And then I just wanted to—I just wanted to ask about corporate costs just with respect to the previous question. I guess, I mean, I know it's—I know that there are some moving parts around that for Fiscal 2026 and how corporate costs decline post-sale. But I'm just curious, I mean, it would be fair to assume that you would see some reduction in Fiscal 2026. Is that correct? That's for sure. That's for sure.
But we're not done yet how we will present the result, but you can expect that we will certainly present it a different way. The corporate costs, if you look at what will remain as a new company, it will be probably more as a one group with different segments. So that's something that we're working on as we speak.
Speaker #4: The corporate costs, you know, if you look at what will remain as a new company, it will probably be more as one group with different segments.
Speaker #4: So, that's something that we're working on as we.
Speaker #4: speak. Yeah.
Stephen MacLeod: Yeah. Yeah. Okay. Okay. That's great. And then I just wanted to—I just wanted to ask about corporate costs just with respect to the previous question. I guess, I mean, I know it's—I know that there are some moving parts around that for Fiscal 2026 and how corporate costs decline post-sale. But I'm just curious, I mean, it would be fair to assume that you would see some reduction in Fiscal 2026. Is that correct?
Speaker #2: Yeah.
Speaker #6: Okay. Okay, that's great. And then I just wanted to ask about corporate costs, just with respect to the previous question.
Speaker #6: I guess, I mean, I know, I know that there are some moving parts around that for fiscal 2026 and how corporate costs decline post-sale.
Speaker #6: But I'm just curious. I mean, it would be fair to assume that you would see some reduction in fiscal 2026. Is that correct?
Thomas Morin: That's for sure. That's for sure.
Speaker #4: That's for sure. That's for sure. Unless, you know, we said we're open, we expect that the transaction will be closed in the first quarter of fiscal 2026.
Yan Lapointe: Unless we said otherwise, we expect that transaction will be closed in the first quarter of fiscal 2026. Calendar. Calendar. Thank you. And so therefore, we will be acting during the year to adjust the corporate cost structure. Yeah. Yeah. Okay. Great. Thank you, Donald. Thank you, Thomas. Appreciate it. Mesdames et messieurs, encore une fois, si vous avez des questions supplémentaires, veuillez, s'il vous plaît, appuyer sur les touches étoile 1. Si vous utilisez la fonction main libre, veuillez décrocher le récepteur avant d'appuyer sur les touches. Ladies and gentlemen, if there are any additional questions at this time, please press star followed by the one on your touch-tone phone. As a reminder, if you're using a speakerphone, please lift the handset before pressing any keys. La prochaine question vient de David McFadden avec Cormark Securities. Your next question comes from David McFadden with Cormark Securities.
Unless we said otherwise, we expect that transaction will be closed in the first quarter of fiscal 2026. Calendar. Calendar. Thank you. And so therefore, we will be acting during the year to adjust the corporate cost structure.
Speaker #4: Calendar, calendar, and I thank you. And so, therefore, we will be acting during the year to adjust the corporate cost structure.
Speaker #4: Yeah. Okay.
Stephen MacLeod: Yeah. Yeah. Okay. Great. Thank you, Donald. Thank you, Thomas. Appreciate it.
Speaker #2: Yeah.
Speaker #6: Great. Thank you, Donald. Thank you, Thomas. I appreciate it.
Operator: Mesdames et messieurs, encore une fois, si vous avez des questions supplémentaires, veuillez, s'il vous plaît, appuyer sur les touches étoile 1. Si vous utilisez la fonction main libre, veuillez décrocher le récepteur avant d'appuyer sur les touches. Ladies and gentlemen, if there are any additional questions at this time, please press star followed by the one on your touch-tone phone. As a reminder, if you're using a speakerphone, please lift the handset before pressing any keys. La prochaine question vient de David McFadden avec Cormark Securities. Your next question comes from David McFadden with Cormark Securities.
Speaker #1: Mesdames et messieurs, encore une fois, si vous avez des questions supplémentaires, veuillez s'il vous plaît appuyer sur les touches étoile 1. Si vous utilisez la fonction mains libres, veuillez décrocher le récepteur avant d'appuyer sur les touches.
Speaker #1: Ladies and gentlemen, if there are any additional questions at this time, please press star, followed by one on your touch-tone phone. As a reminder, for those using a speakerphone, please lift your hands before pressing any keys.
Speaker #1: La prochaine question vient de David McFadden avec Cormac Securities. Your next question comes from David McFadden with Cormac Securities. Your line is now open.
Yan Lapointe: Your line is now open. All right. Thank you. So a couple of questions. You talked about on your release that the retail printing or retail services and printing EBITDA was down. It seems largely due to Canada Post disruption. What would it have been excluding Canada Post? I'll say that we have about CAD 5 to 6 million negative impact from Canada Post, at least. Okay. All right. Thank you. And then in terms of the outlook, you gave us an outlook for EBITDA, but what about revenue? You've gone through some of the puts and takes here in terms of revenue, but what's your expectation for overall revenue for 2026? As I said earlier, we expect, obviously, growth in ISM for first acquisition and then organic growth. That should be, that will be negatively impacted by the rest of the business.
Your line is now open.
Speaker #1: open. All right.
David McFadgen: All right. Thank you. So a couple of questions. You talked about on your release that the retail printing or retail services and printing EBITDA was down. It seems largely due to Canada Post disruption. What would it have been excluding Canada Post?
Speaker #2: Thank you. So, a couple of questions. You talked about, in your release, that the retail printing or retail services and printing EBITDA was down.
Speaker #2: It seems largely due to Canada Post disruptions. What would it have been excluding Canada?
Speaker #2: Post?
Thomas Morin: I'll say that we have about CAD 5 to 6 million negative impact from Canada Post, at least.
Speaker #4: We have about 5 to 6 million negative impacts from Canada Post, at least.
David McFadgen: Okay. All right. Thank you. And then in terms of the outlook, you gave us an outlook for EBITDA, but what about revenue? You've gone through some of the puts and takes here in terms of revenue, but what's your expectation for overall revenue for 2026?
Speaker #2: Okay. All right. Thank you. And then, you know, in terms of the outlook, you know, you gave us an outlook for EBITDA, but what about revenue? You've gone through some of the puts and takes here in terms of revenue, but what's your expectation for overall revenue for 2026?
Thomas Morin: As I said earlier, we expect, obviously, growth in ISM for first acquisition and then organic growth. That should be, that will be negatively impacted by the rest of the business.
Speaker #4: We expect, obviously, growth in ISM for the first acquisition and then organic growth. That should be negative. That will be negatively impacted by the rest of the business, the book printing, which, as we said earlier, might have some negative following a very strong 2024.
Yan Lapointe: The book printing that, as we said earlier, might have some negative following a very strong 2024 and the flyer market for rest of Canada. So overall, as we said also Monday, I think we're getting close where the new ISM and media activities will compensate. But in 2026, we might see slightly negative in terms of organic growth on the top line. Also, important to understand, as you know, in the model, the more we switch to raddar, it does impact also our top line. Usually, not the same when it's EBITDA, but since we're using less paper, that may have an impact also. So this is something to consider in 2026, like it happened in Quebec in 2024/25. Okay. All right. That's helpful. Thank you.
The book printing that, as we said earlier, might have some negative following a very strong 2024 and the flyer market for rest of Canada. So overall, as we said also Monday, I think we're getting close where the new ISM and media activities will compensate. But in 2026, we might see slightly negative in terms of organic growth on the top line. Also, important to understand, as you know, in the model, the more we switch to raddar, it does impact also our top line. Usually, not the same when it's EBITDA, but since we're using less paper, that may have an impact also. So this is something to consider in 2026, like it happened in Quebec in 2024/25.
Speaker #4: And the flyer market for the rest of Canada. So overall, as we said also Monday, I think we're getting close where the ISM and media activities will compensate, but in 2026, we might see slightly negative in terms of organic growth on the top line.
Speaker #4: Also, important to understand, as you know, in the model, the more we switch to radar, it does impact also our top line. Usually not the same one at the top, but since we're using less paper, that may have an impact also.
Speaker #4: So this is something to consider in 2026, like it happened in Quebec in 2024/25.
David McFadgen: Okay. All right. That's helpful. Thank you.
Speaker #2: Okay. All right. That's helpful. Thank you. And then just on the dividend, I would imagine you're probably not going to raise just a normal dividend.
Yan Lapointe: And then just on the dividend, I would imagine you're probably not going to raise just a normal dividend in 2026, and you would probably wait until you see EBITDA growing or revenue growing organically. Is that a fair assumption? Well, I think the first good news for 2026 is we will, following the closure of the transaction, we will have an important distribution of cash to the shareholder. And I like to highlight that we've been very active also in our two recent years, either by buying back, or in special dividend. And we said in our presentation on the RSI that we expect to continue, obviously, to pay dividend. Obviously, smaller company, but it's still a very good yield. But this is something that will need to be approved by the board once the transaction is over to see where we're going in Fiscal 2026.
And then just on the dividend, I would imagine you're probably not going to raise just a normal dividend in 2026, and you would probably wait until you see EBITDA growing or revenue growing organically. Is that a fair assumption?
Speaker #2: In 2026, you would probably wait until you see EBITDA growing or revenue growing organically. Is that a fair assumption?
Donald LeCavalier: Well, I think the first good news for 2026 is we will, following the closure of the transaction, we will have an important distribution of cash to the shareholder. And I like to highlight that we've been very active also in our two recent years, either by buying back, or in special dividend. And we said in our presentation on the RSI that we expect to continue, obviously, to pay dividend. Obviously, smaller company, but it's still a very good yield. But this is something that will need to be approved by the board once the transaction is over to see where we're going in Fiscal 2026.
Speaker #4: Well, I think the first good news for 2026 is that, following the closure of the transaction, we will have an important distribution of cash to the shareholders.
Speaker #4: And I'd like to highlight that we've been very active also in our two recent years, either by buying back or in special dividends.
Speaker #4: And we said in our presentation on the RSI that we expect to continue, obviously, to pay dividends. Obviously, it’s a smaller company, but still a very good yield.
Speaker #4: But this is something that will need to be approved by the board once the transaction is over to see where we're going in fiscal 2026.
Speaker #4: But, as we said on Monday, this new CO, if we call it, will produce a lot of free cash flow—room for CapEx, room for M&A, and also room for paying back, you know, giving back capital to the shareholders.
Yan Lapointe: But as we said also Monday, this new CO, if we call it, will produce a lot of free cash flow, room for CapEx, room for M&A, and also room for paying back, giving back capital to the shareholders. Okay. All right. Okay. Thank you. Il ne semble plus d'avoir de questions, Mr. Lapointe. There are no further questions at this time. Thank you, everyone, for joining us on the call today, and we look forward to speaking to you soon. Mesdames et messieurs, ceci termine l'appel conférence pour aujourd'hui. Merci de votre participation. Vous pouvez maintenant raccrocher. Ladies and gentlemen, this concludes your conference call for today. Thank you for participating. Please disconnect your lines.
But as we said also Monday, this new CO, if we call it, will produce a lot of free cash flow, room for CapEx, room for M&A, and also room for paying back, giving back capital to the shareholders.
Yan Lapointe: Okay. All right. Okay. Thank you. I
Speaker #2: Okay. All right. Okay. Thank
Speaker #2: you. In this
Yan Lapointe: l ne semble plus d'avoir de questions, Mr. Lapointe. There are no further questions at this time. Thank you, everyone, for joining us on the call today, and we look forward to speaking to you soon. Mesdames et messieurs, ceci termine l'appel conférence pour aujourd'hui. Merci de votre participation. Vous pouvez maintenant raccrocher. Ladies and gentlemen, this concludes your conference call for today. Thank you for participating. Please disconnect your lines.
Speaker #1: Question, Mr. Lapointe. There are no further questions at this time.
Speaker #1: time.
Speaker #4: Thank you, everyone, for joining us.
Speaker #4: On the call today, we look forward to speaking to you.
Speaker #4: soon. Mesdames et messieurs,
Speaker #1: Ceci termine l'appel conférence pour aujourd'hui. Merci de votre participation. Vous pouvez maintenant raccrocher. Ladies and gentlemen, this concludes your conference call for today. Thank you for participating.