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spk_0: this increase is a result of new boys to finance the company's acquisitions during the first nine months of this year and the repurchase of shares under our normal course issue a bit although the companies that dead increase the balance she closed the quarter in a strong position about she leverage ratio was one point one point four six times increasing from one point zero six at the end of december twenty twenty one liquidity was robust with almost seven hundred million of cash on hand zero point eight billion of available on drawn corporate credit capacity on a revolving bank facility the company's overall average finance rate was largely unchanged at approximately two point six seven percent of september thirtieth twenty twenty two compared to two point four to present a december thirtieth twenty twenty one rick reflecting an increase in variable interest rate on our outstanding borrowings under a revolving credit facility the company's bow she continued to june used to be well positioned to finish the year
spk_1: jeff full body of
spk_2: show good morning everybody am on flight eight hundred so i capital spending for the year two hundred ninety eight million so far that of disposals a forecasting to spend in the region in the range of three hundred and eighty to three and ninety million for the year twenty twenty two penny the slide nine highlights of or the ccl segment the is called a thirteen point two percent organic sales growth only pa the price lad her problem of majority of that thirteen point he came from price but about some volume increase to both america and asia pacific api single digit your about double digit and latin america or up for more than forty percent get a strong cauldron the personal care her health care and food and beverage businesses it was pretty good at ccl to kill be compared to have a slow tajiks period and twenty twenty one physio design was also up on recovery in automotive production volume but i was offset by modest decline in electronics on computer industry slide ten the joint ventures we have a very good quarter net earnings up considerably so set of that was very nice addition to the income stream for the cold and slot eleven hundred for every is awesome softness hear that said came as a little bit of a surprise but toby did worry about it going into the quarter back to school season started much earlier and key to this year than it's ever done deflated retailers take an end cause him with their inventory positions those supply chain disruption but that same cause and also affected us the back end of the season when know the repetitions old as which of tepid vetoed typically in on effect years in the pandemic go back to twenty nineteen just didn't happen and many retailers ended the season early we also saw some destocking and some of the channels distribution channels with a weapon reseller high margin printable media products of setting up a strong gains in a direct to consumer channels horticulture the existence of soft on slow demand for the type that exists in brazil our expectations raw materials availability especially paper and metal rings held the sales growth some month slide twelve checkpoints and sali call to and the a man's business we had a good third period and the americans but up as offset by declines in europe and asia province her down on lower volumes of jeannie volumes of i am a as business had a raise and supply blogs but i was offset by good results in the a paralyzing simon the again and double digit organic growth in our if i id and acquisitions enough space also contributed we did have an eleven point nine million gain on excess reside in china of it's drive most of the profitability improve and his here the slide five thirteen and know via her volume situation with up in america as but down in europe and all that all the down and europe at all in our plant in poland where we moved and old line of made packaging films replaced it with the aca flight line which is as teaching long term investment businesses thought of a culture that the by far the majority the problem in the cold or was ready the unprecedented summit energy costs spike in europe and fright inflation so that was really responsible for all the proper decline and for the cause of the in europe and the in and in the americas we were affected by the margin squeezed some high cost in madrid has read and indices decline reducing on separate setting prices the reverse effect of of experience in twenty twenty one i'll look for the coming colder the he's cecile business years old as takes is still remain solid in a ccl design space we we see improving automotive out of it as likely to be offset by slow conditions in a technology space i comes to see feel secure were much easier in the second half of the year than they were second of last year but a harder and keep the they were in key three had a very dread tried to consumers strength remains of many is magnificent but the distributed these targeted these talking him the call business remains potentially and offset hello he did see some improvement and that in the month of october the checkpoints a strong are if i the growth of a ls nine or that may i call centers coulda by apparel these skulking so what a bit saudi worried about the apparel supply chain and salter i may as picture in broad retail we do expect another challenging cauldron an idea for the same rate as because been through but we did see some improvement in that get in october on the better situation with the energy markets in europe we have a slight modest ethics headwind to contend with in the coming call them so that apply to be like to open up a all the questions
spk_3: burnley leans gentleman the floor is now open for question if you would like to enter the cute to ask the question at this time may prices dar one on your telephone keypad and to the queue with you ask if listening on speaker phone this morning that you pick up your hands that if with him from per phone to provide optimal sound quality why once again ladies and gentlemen battlestar one on your cell phone keypad at the time if you'd like to enter the queue to ask a question please hold the moment while we call for question and the first question this morning is coming from mark novel from scotiabank mark your line likely go ahead it's a morning jeff are more incentive morning i'm a vegan so the know you know the object is to two part question person his peers and with inventory you typically keeping his been in the us and second part of the surcharges the you can place in europe effectively is market market on energy prices
spk_2: yeah so am we that the reason we get the end it did the squeeze on the margins that i think is david and long have you question path through the of the and to see what happens on the index's his immediate so the index go double down we have an immediate path through and that benefits us and arising read in market because we have lower cost the drain the system and we get the river in fact in the in the is in the in the in a declining market and cost as a few million bucks is called and mainly mainly in the americas by the present declines have been i was the second buggy question
spk_4: volatility him commodity and bullets me sweet thinking is a better the thing mods or proper dollars in rafah present for this business
spk_2: yeah but it's a path through industry so and so we get to we get swings swings in the revenue line driven by the gym by path through so that he he appoints not the squad that of my if the answered it okay if i'm amy on in avery
spk_5: i feel like there's quite a few moving parts
spk_3: primarily and the margin that it would that be of the mix in the lower direct to consumer ah the of a they will is that than the big impact is already been a d stalking him another the margins i was in that these fucking the printable media business
spk_2: soviet a couple of as large a very large distributors the stopped in the in the colder than we've seen some reversal of that in the month of october but it's a high margin business of of that happens the that's where the impact ready comes
spk_5: i'm evidence just ask is is more broadly death i was he does touch lot of geography stepped on a markets
spk_4: ah my looking your commentary it's so fans really constructed when i was he a touch of conservatism or uncertainty but just again i just i love your your thoughts are to be broadly are what you're seeing your business and sort of higher again about twenty two i remove and twenty twenty third acts but it's a it's a mixed picture and says you have
spk_2: put he probably wouldn't be surprised to hear me say we still see some solid growth areas of growth so and southern the the the month of october was pretty much of a reflection of what happened key keith rates are the ccl business continues to they well we did suite at a much better october in the and i agree that we had and key three can some of those impacting key three rivers her checkpoints still hanging oh in their think i well and them and the and then they the commodity inflation and deflation depending on which side of the coin you're on so the navy we've got the problem of the earth of the residents going down and the impact on pricing and then you got the energy markets and know all over the place so having to get manager why true that the a month by month
spk_6: i'm sure it will
spk_7: thank you
spk_3: your next question is coming from the the mcleod from piano capital markets he then your lie that life please go ahead
spk_5: a great i think you're good morning ice say i'm marnie i just want to follow up on on avery
spk_3: you know the mart as he chocolate some of a margin impacts okay given the fact that some of those the stalking impacts of reversed in october would you expect to see margins are to reverting back to twenty percent range and every day
spk_2: well not until next year next the key for the like a local or a very say three get into next year we would certainly see expect to see that and i think you even you we might need to look at it is that the at the access margie me adding he'd say sir martin surprise on the outside in key to said he combined take key to and key three v for they got a i'm all right it's a reflection of what's really going on in the business good key to was with because of the early start to the back to school season you know really inflated key to the cause the key three thirty one one of the as well as underlying themes that avery
spk_4: alright okay okay thank you
spk_8: i'm
spk_9: and then just just as you think about that innovia and eagles gloat business
spk_3: he a couple of items one is on each offload can use given up thing as to where you stand on on those production or impacts and then he talked about that and i'll be results declining comparatively assuming on a year over year basis gloucester exiled yeah okay
spk_10: and now
spk_2: october was significantly better than any the any the months we added in key trade and ideas and aca sites where to think is a question of a building that business and scratch so we don't have any volume to load onto the line that we did the way that the qualify to each each volume but it's the the interest is very significant so be god either inside the company had ccl but also outside in the freak and or the market he got a lot of interest in the archive low product line so it'll take a cultural to the get through the thought of face while he gets weakest her qualifications and approvals but there were very pleased with the progress of making
spk_11: okay great
spk_3: and then and then just on on acquisitions are the others and backdrop arm and others been a lot of macro noise out there but i'm just curious if you're seeing any easing and and multiples or anything like that are your conversations trending
spk_2: well i would say we've all seen some contractions in the in multiples in the public space still some pretty hefty transactions hang on in the private spaces within a few public announcements about a couple of transactions in in in the industry cylinder would double digit a either damage and so we haven't seen any real change in the air in the transaction multiple that a going on how they're so so well with with with another a good a good flow both on transaction deals and in the in the in the pipeline the nothing of nothing of any major scale
spk_3: okay great and chef and shop from thank you
spk_12: and your next question is coming from on that abdullah from national bank of canada
spk_2: i made your line of life please go ahead and thanks for taking my question i'm i'm not twenty twenty three outlook commentary and acknowledging acknowledge that the lead usually between forty six week to speak meet the the magnitude of the impact comes from higher inventory level that customers i already knew the other country slide is really about the coming cold it's not funny twenty three outlook it's for outlook on the told the coming a
spk_12: so you know think it'll be in the hidden in the the in the picture looks quite similar in terms of of que three say nothing of provided some some some comments then called define those the on the other than the we be able to do fair and ah on every and
spk_2: and we look into a possible fashion and twenty three up how the performed in previous recession and in that room for you to cut costs to me or boost margin and and cases top mine pressure when it so conceive unstable so
spk_13: so it's a so
spk_2: very resilient business to and to macros macro influences so i will quite optimistic about a refund actually evidence done a few deals and it's in a in the industry that as a the gang quite well
spk_3: so
spk_14: so i think it's ready the kid the key tray performance at everybody has to be seen in the context of key train katie together could it's ready to trade driven by timing of ship and scolded and threatened by anything else thank you
spk_3: your next question is coming from david mcfadden from core marked security david your line of light please go ahead
spk_2: i'm going out a couple of percent i'm just wondering where where at return san party through all that cost and like passers scan and wondering going forward when would we expect to see that most of the organic grounds is actually line drive nurses price well it out the to be as a little while yeah turn because we the courtly comparative stoke include a fair amount of price
spk_3: but so we did see volume increase in the in the that thirteen point two percent for a difficult to measure and that says in that segment that them
spk_2: we think it's roughly two thirds price one third volume something like that and or to give you to give you a rough idea so he is sunny so uniformly the increase in the ccl segment space is colder and habit of they invaded the well into next year before we cycled through and get into put into it and the markets where the other not comparing inflation now can camp and then just on me you know in you to at was we this quarter that's the op and then que pour le sacre seen in downey and just kind of wonder what's going on there and but the a as sansa i'm yeah well it save as those it is up saw any slightly this called of it is better and he was in then in key to some without some of that was price driven price recovery driven
spk_15: so that the the profits were down the school that because it is the at the university was still below fry year so it's a server it's muslims products are sold into retail so retail the retail market so the not not strong at the moment
spk_3: the turn we expect people to look so so far as looked like it pretty much the repeat what happened and key three so far okay okay
spk_2: i think thank you your next question is coming from barrel young from tv securities barrel your line of life we'd go ahead
spk_16: take the money or on ab just too quick ones for me
spk_5: around ccl design in the release of think he made mention to some new application that were able to offset some of the yeah a weakness in the technology sector and has get a little detail all added that expected it to kerrigan the next several quarters
spk_2: yeah me neither is the that these tcl design electronics tech that the tech industry as you probably old knows this is that some will challenge to the moment that we have won some new applications may need functional parts that are used on laptop displayed screens
spk_17: had saved them a narrative game we've had will can't go into more details on that that that's been the main source of again
spk_18: and that say again as his as offset some of the decline in just the uni volume and going on in the and as he just in general
spk_3: a cagr it and then with respect to check point the the twelve million dollar gain from the china a real estate sale and in
spk_19: get you have a non aligned event number for for checkpoint that would have happened in the quarter with that
spk_2: both that taken eleven by nine million of a number that you got it pepper effects above it again
spk_19: thank you
spk_2: your next question is coming from michael glenn from raymond james michael your line of life you go ahead hey thanks at chess some of the large cpg companies that you would do business with have seen some i volume declines in the recent quarter are you not a seeing that all in terms of the a label business so far not so and i does cost me a little bit had some it's a mixed picture in the tp jays so in the be effect other than a lot of the live world's largest brewers reported pretty strong volume gain sites says and it's ready in the person who can't face a thing you're probably referring to where we saw some and some of the customers in that space rebuilding declined not all of them so
spk_20: so the ones that are more focus on the beauty care industry from some of those reported put quite nice gains so it's a i'd say it's a mixed picture in the cpg space but the with the customers we have on balance we've seen misinterpret of the so far recently recently solid old as pics of but we read the same relief is a day and i think and
spk_3: sends a either about twenty twenty three and i will see what happens and and just her understand that a bit more did that the volume of labels that you sell to save money or larger i'm home and personal care products cpg company her they largely just in time or is there any sort of inventory like to think about that
spk_5: while the revenue line is determined but more loyal than anything else by makes not by not by unit volume cause label sizes and level of complexity ready determined remy rather than the number of units the customer south
spk_21: third son is no translation relationship between a customs union volume in our revenue volume
spk_2: between sense so far we haven't seen too much salt as in the hpc space of is a strong colder air and the old a picture the still quite solid
spk_22: okay thanks for taking the question a problem
spk_2: thank you and your next question is coming from bench ethic from p i financial than your line and like please go ahead
spk_23: thanking it does have one question jeffs on a counter sales work with checkpoint in china is dad a reflection of
spk_3: sort of fish and soothing consolidating production and less real estate or or is it is it's and strategic sort of geographic repositioning toilets at the question then when it comes to your sales of accents or can can you hear me okay says of off when it comes to help deliver accents real estate in china rated real estate and get so we we we we we inherited a factory in downtown shanghai very close to the disney the disney pagans in shanghai were checkpoint used to make and assemble it's a it's i may as product line and we've we built and eat factory two or three hours outside of shanghai a much lower cost place and then a much nicer facility of the enemy sold the real estate from the original building that's what that's what happened
spk_2: or should thank you i'm thinking as a reminder ladies and gentlemen if you'd like to join the queue at the time they press star one on your telephone keypad
spk_24: and we do have a follow up question from mark novel from scotiabank
spk_3: your line of life please go ahead thanks i'm i'm just curious about the that the buybacks
spk_25: i have eaten by the you three oxy very busy for staff does does hired the game other how should think about that it did more to sort of opportunistic from price
spk_2: more sort of weighing macro just just just how you doing about an hour to think about it thanks death have having way think about it and have an ownership mentality is over if we fail the stock is is under that it so he will he began soviet abide i could an average price of fifty eight ninety five at the time the start with suddenly you know because the vog it debases probably ten dollars below either real value for the company of though that situation arrived again we be buys of the stock so well to wait and see what happens next year depending on how the hell things unfold in the markets an answer a problem
spk_26: thank you
spk_25: and your next question is coming from waters franklin from rbc water your line of life please go ahead
spk_27: i addison most on alter hijacked by shop owners
spk_2: though i'm going into a slower economic environment have are you seeing any weakening and any of the demands arguments were you have historically seen or adoption first mean competitive processes
spk_28: cracked
spk_29: ah i would say we haven't seen a lot so far from you know there's still more red thing with inflation volatility it added a than we are we use the lives that weakening demand in that respect
spk_3: so verb and way we have the same concerns everybody else has but so far the oldest pictures been decent thoughts not spectacular but it's decent and then so but we live in a we read the newspapers like either me got the same concerns as he the
spk_2: putin so far we haven't seen any early signals to the one the one area that's that's noticeably wages that city a text based computer industry laptops birthers cloud computing cell phones
spk_3: yeah that that that industry be same suddenly those and slow down but we go again share in your application so we when i was so so far and that that off against each other so far
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