CCL Industries Inc.

Good morning and welcome to CCL Industries Third Quarter Investor Update. Please note that there will be a question and answer session after the call. The moderator for today is Mr. Jeff Martin, President and Chief Executive Officer, and joining him is Mr. Sean Waschuk, Senior Vice President and Chief Financial Officer. Please go ahead, gentlemen.

Good morning, everybody, and welcome to our call. We're dialing into you today from operations in Germany and Stuttgart. We're going to hand you over right away to Mr. Sean Moschuk, who's going to take you through the numbers of the quarter.

Thank you, Jeff. Everyone can turn to slide two. I'll draw your attention to our disclaimer regarding forward-looking statements. I'll remind everyone that our business faces known and unknown risks and opportunities for further details on these key risks. please take a look at our 2022 annual report under the section, Risks and Uncertainties. Our annual and quarterly reports can be found online at the company's website or at CDAR.com. So we'll move forward to slide number three, our summary of operations for the quarter and year to date. For the third quarter, Our 2023 sales increased 2% with 2.6% acquisition-related growth, 5.4% positive impact from foreign currency translation, partially offset by 6% organic decline, resulting in sales of $1.69 billion compared to $1.66 billion in the third quarter of 2022. Operating income. was $256.1 million for the 2023 third quarter compared to $246.8 million for the third quarter of 2022, a 2% decrease excluding the impact of foreign currency translation. Jeff will expand on our segmented operating results for the CCL, Avery, Check Point, and Inovia segments momentarily. Corporate expenses were down for the quarter due to lower discretionary expenses and short-term variable compensation expense versus the prior year quarter. Consolidated EBITDA for the 2023 third quarter, excluding the impact of foreign currency translation, increased 2% compared to the same period in 2022. Net finance expense was $20.3 million for the third quarter of 2023 compared to $17.1 million in the 2022 third quarter due to an increase in interest rates on variable rate debt. The overall effective tax rate was 24.5% for the 2023 third quarter compared to an effective tax rate of 22.9% recorded for the third quarter of 2022 due to higher withholding taxes on foreign dividends. The effect of tax rate may change in future periods depending on the proportion of taxable income earned in different tax jurisdictions with different rates. Net earnings for the 2023 third quarter were $169.1 million compared to $163.9 million for the 2022 third quarter. For the nine-month period, sales and operating income decreased 1%, net earnings decreased 3%, compared to the nine-month period in 2022. 2023 included the results from 11 acquisitions completed since January 1st, 2022, delivering acquisition-related sales growth for the period of 2.2%. Foreign currency translation tailwind added 5% to sales, partially offset by a 3.2% organic sales decline. Moving to the next slide, our earnings per share. Basic earnings per Class B share were $0.95 for the third quarter of 2023 compared to $0.93 for the third quarter of 2022. Adjusted basic earnings per Class B share were $0.95 for 2023 and 2022 third quarters. We delivered this $0.95 principally attributable to a decrease in operating income of $0.03, increase in taxes of two cents, increased finance costs of one cent, offset by five cents positive foreign currency translation, and one cent improvement in our joint venture equity pickup. Moving to our next slide, free cash flow from operations. For the third quarter of 2023, free cash flow from operations was an inflow of $182.2 million compared to an inflow of $148.7 million in the 2022 third quarter. The increase in free cash flow from operations of $33.5 million is primarily due to improved working capital, higher cash earnings, slightly offset with higher net capex in the third quarter of this year compared to 2022 third quarter. For the 12 months ended September 30th, 2023, free cash flow from operations increased $58.3 million compared to 12 months ended September 30th, 2022. This comparative improvement is primarily attributable to an increased earnings, better comparative working capital management, offsetting an increase in net capital expenditures and higher taxes paid. Moving to our next slide, our cash and debt summary. Net debt as at September 30th, 2023 was 1.76 billion. an increase of $237.7 million compared to December 31st, 2022. This increase is principally a result of increased borrowings and a lower cash balance at Q3 2023 versus December 2022 to fund the eight acquisitions completed this year. Although the company's net debt increased, the balance sheet closed the quarter in a strong position. Our balance sheet leveraged a ratio was only 1.37 times up slightly from 1.24 at December 31, 2022. Liquidity was robust with $773 million of cash on hand and $0.8 billion U.S. of available undrawn credit capacity on the company's revolving bank credit facility. The company's overall average finance rate was approximately 3% at September 30, 2023, compared to 2.9% at December 31st, 2022. This reflects an increase in variable interest rates on the company's outstanding borrowings under its revolving credit facility. The company's balance sheet continues to be well-positioned to move through the end of fiscal 2023 and beyond. Jeff, over to you.