KP Tissue Inc.

for replay. All participants are currently in listen-only mode. Following the presentation, we will conduct a question and answer session. Instructions will be provided at that time for you to queue up for questions. If at any time you have difficulties hearing the conference, please press star followed by zero for operator assistance. I will now turn the call over to Doris Gerbeck, Director of Investor Relations. You may begin your conference.

Thank you, Operator. Good morning, everyone, and thank you for joining us to review Kruger Products' fourth quarter of 2024 financial results. With me this morning is Dino Bianco, the CEO of KP Tissue and Kruger Products, and Michael Key, the CFO of KP Tissue and Kruger Products. Today's discussion will include certain forward-looking statements. Actual results could differ materially from these forward-looking statements due to known and unknown risks and uncertainties. A list of risk factors can be found in our public filings. In addition, today's discussion will include certain non-GAAP financial measures. The reconciliation of these non-GAAP financial measures to the most comparable GAAP measure can be found in our MD&A. The press release reporting our Q4 2024 results was published this morning and will be available on our website at kptassoon.com. The financial statements and MD&A will also be posted on our website and on CDAR+. The investor presentation to accompany today's discussion can be found in the investor relations section of our website. I will now turn the call over to our CEO, Dino Bianco. Dino.

Thank you, Doris. Good morning, everyone, and thank you for joining us for our fourth quarter and full year earnings call for fiscal 2024. We are pleased with our financial performance in 2024, highlighted by record revenue of more than $2 billion and strong adjusted EBITDA in all four quarters. We are particularly proud of our profitability results, which were relatively stable in each quarter despite the volatile market and input costs. The fourth quarter culminated with double-digit revenue growth year over year and a near double-digit improvement in terms of adjusted EBITDA. Looking ahead, we are closely monitoring the evolving North American trade environment to assess its impact on our business. We have developed various scenarios and contingency plans to understand the potential impact to our company. I do believe that as we enter this period of uncertainty, our business is in a very strong position to manage any potential risk. Now let's take a look at our quarterly numbers on slide six. Revenue growth of 11.9% in the fourth quarter of 2024 was mainly driven by higher sales volume in the U.S., favorable selling prices in Canada, and a positive foreign exchange impact. Canadian revenues increased 6% in the fourth quarter, while U.S. sales grew 19.7%, on continued business growth in this market. In terms of profitability, adjusted EBITDA improved 9.2% year-over-year to $66.8 million in the fourth quarter, mainly due to higher sales volume, increased selling prices, as well as lower marketing and SG&A expenses. These factors were partially offset by a number of items, including higher pulp prices. Michael will provide you with the details in his financial review. On slide seven, we have our full year results where we delivered very strong revenue growth of 9.4% and adjusted EBITDA growth of 11% in fiscal 2024. We have reported eight consecutive quarters of strong financial results following a challenging 2022. This sustained performance reflects the adaptability and resiliency of our teams in the wake of rising inflationary pressure in recent years and the benefit of the new capacity from our recently added new assets. On slide eight, pulp average prices in Canadian dollars decreased in the fourth quarter of 2024 from the previous quarter, while year-over-year average prices for NBSK and BEK were up 32.1% and 22.9% respectively versus Q4 2023. Although market pulp prices declined sequentially in the fourth quarter, industry analysts anticipate prices will rise again in 2025. We're also keeping a close eye on the Canadian dollar since a weakened Canadian exchange rate could further increase our input costs in 2025. Let's move on to our operations on slide nine. We are pleased to report that our assets performed well across the network in 2024. At Sherbrooke, the successful startup of our new paper machine and facial tissue line exceeded production targets for the year. At Memphis, the turnaround continued to move in the right direction through increased investments in staffing, training, and maintenance spending to achieve improved performance. In summary, we delivered improved results at all our sites with ongoing production increases expected in 2025. Let me give a quick word about our capacity outlook on slide 10. Following the startup of our tissue plant in Sherbrooke last year, we are currently evaluating the construction of a new manufacturing facility that will contain a state-of-the-art TAD paper machine and converting lines. The proposed plan supports our continued focus to grow revenue, build our market share, and offer high-quality tissue products to customers across North America. The current uncertainty in the North American business environment will require us to perform additional scenario planning and due diligence on this project before we make any official announcement. Let's turn to slide 11. We continued investing and expanding our Made in Canada positioning in the fourth quarter amid an uncertain trade environment. Our latest marketing campaign is built on the renewed patronism of consumers seeking to buy products made in Canada. As a long-standing Canadian company, Kruger Products has focused on making and selling high-quality branded products from coast to coast for Canadian consumers. We also recently activated our Scotty's Tournament of Hearts campaign related to the Canadian Women's Curling Championships. Congratulations to Team Holman for repeating as Canadian champions at the 2025 Scotty's Tournament of Hearts that was held in Thunder Bay, Ontario. Early in the fourth quarter, we generated record engagement at the 21st Cashmere Collection show in Toronto. The fashion show and fundraiser, which was enhanced by nationwide live streaming and first-ever live voting, celebrated the strength, courage, and hope of breast cancer survivors in Canada. Sixteen of the country's top designers took part in creating the 2024 collection, including Shava Lindsay, who drew inspiration from her mother's journey through cancer to design the winning dress made of cashmere bathroom tissue. Over the last 20 years, the cashmere collection has raised over $5 million in support of breast cancer awareness, prevention, and treatment programs for its charitable partners, the Canadian Cancer Society, and the Quebec Breast Cancer Foundation. In addition, we continued our distribution drive behind our facial tissue business in the fourth quarter with the launch of new Scotty's Ultra Soft, Pocket Packs, and Holiday Cubes. And finally, Kruger Products was recognized for his marketing excellence in 2024 with a number of industry awards such as Strati Magazine's Brand of the Year, a Bronze Effie Award for marketing effectiveness related to Scotty's, as well as multiple national and international awards for our Cashmere Ultralux bathroom guide and our Love is Messy media campaign. Turning to slide 12, the data presented is taken from Nielsen. It shows branded market share over a 52-week period ended December 28, 2024. Our decline in bathroom tissue and paper towel share in the fourth quarter of 2024 reflects higher pricing that we took in the Canadian consumer segment, which took effect during the fourth quarter. In the facial tissue category, we continue to make incremental gains with total market share reaching 45% at the end of the year. Looking at the away from home segment on slide 13, sales volume slightly decreased year over year and sequentially in Q4 2024. Ongoing strong orders coupled with challenges on our paper supply hampered our order fulfillment. We expect that our new paper machine in Sherbrooke will provide additional internal paper in 2025 for our away-from-home business and reduce our external requirements. It should be noted that we are rebranding our away-from-home segment to Kruger Pro during Q1 2025. We intend to leverage our strong consumer brands like Scotty's, Cashmere, and White Cloud to grow this business. Finally, strong fiscal 2024 full-year results for our AFH segment, both in terms of revenue and adjusted EBITDA, will provide a solid foundation for future growth. I will now turn the call over to Michael.