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spk01: Mesdames et messieurs, merci d'avoir patienté et bienvenue à la conférence téléphonique concernant les résultats du quatrième trimestre et de l'exercice financier 2021 de TC Transcontinental. Pendant la conférence, tous les participants seront en mode d'écoute seulement. Une période de questions suivra la présentation et des directives vous seront données à ce moment. Nous désirons vous rappeler que cette conférence est enregistrée aujourd'hui le 9 décembre 2021. Welcome to the TC Transcontinental 4th Quarter and Fiscal 2021 Result Conference Call. During the presentation, all participants are in a listen-only mode. Afterwards, we will conduct a question-and-answer session, and instructions will be provided at that time. As a reminder, this conference is recorded today, December 9, 2021. I'd like to turn the conference over to Yann Lapointe, Director, Investor Relations. Je voudrais maintenant céder la parole à Yann Lapointe, Directeur, Relations avec les Investisseurs. Monsieur Lapointe, please go ahead.
spk06: Thank you Juliane. Good afternoon everyone on the line and thank you for joining us on the call. Welcome to TC Transcontinental's fourth quarter and fiscal year 2021 results conference call. You can find the press release, the presentation and the annual MD&A with complete financial statements and related notes on our website at tc.tc under our investor relations section. A replay of this conference call will also be available on our website after the call. We have with us today our President and Chief Executive Officer, Francois Olivier, and our Chief Financial Officer, Donald LeCavalier. We also have with us Peter Bruce, who will succeed Francois and will officially assume the position of President and Chief Executive Officer tomorrow. Peter will also say a few words after Francois' remarks. Before I turn the call over to management, I would like to specify that this conference call is intended for the financial community. Media are in listen-only mode, and should contact Nathalie Saint-Jean, Senior Advisor, Corporate Communications, for more information or interview requests. Please be reminded that 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 such measures to IFRS. In addition, the conference call might also contain forward-looking statements. These statements are based on the current expectations of management and information available as of today, and they involve numerous risks and some certainties, known and unknown. The risks, uncertainties, and other factors that could influence actual results are described in the fiscal 2021 annual MD&A and in the latest annual information form. With that, I would now like to turn the call over to our president and CEO, François Olivier.
spk09: Thank you, Ian, and good afternoon, everyone. This is a special day for me as this is my 56th and last quarterly earnings call as President and CEO of TC Transcontinental. Working with Peter and the management team on the transition over the last couple of months has made me reflect on the strong and resilient company we have built, our agility, and the success of our transformation. We have stood the test of time, overcoming challenges and adapting to major changes in our environment and in our business. When I became CEO in 2008, almost 80% of our revenues came from our Canadian operations, with the balance coming from our printing operations in the US and in Mexico. Our media sector represented close to $700 million in revenue, and a significant portion of this came from publishing magazines and newspapers, which were dependent on advertising revenue. A lot has changed since then. To date, we are a very different and diversified company. With most of our sectors were facing Edwin's 10 years ago, to date the large majority of our revenue comes from businesses with favorable prospects. While we continue to have a North American focus, we now have operations in eight countries, with half of our revenue generated outside of Canada. TC Transcontinental has transformed from being a Canadian company to an international organization that is more resilient than ever, whether it be to economic shock or technological change. The results we released today reflect this resilience. Our 2021 performance shows that our business is solid. When excluding external factors like the Canadian wage subsidy, the price of resin and the exchange rate, we delivered a much higher consolidated EBITDA than last year. In packaging, we saw an unprecedented rise in resin prices. Almost every single month saw a new increase. In addition, the Canadian dollar declined versus the U.S. dollar, making the comparison with 2020 much harder. But we stayed focused on what we could control. we work diligently to pass through the higher resin prices as per our contractual agreements to minimize the negative impact. Looking at fiscal year 2021 as a whole, when excluding the impact of higher resin prices in the additional week, we delivered an organic revenue growth close to 2% and an EBITDA margin of over 16%, which is in line with what we have said at the beginning of the year. And printing, We suddenly lost close half of our revenues in March of 2020 when governments put in place measures to limit the spread of COVID-19. Despite the continued impact of restrictions on our customers, our revenues gradually began to recover. In fiscal year 2021, our revenues grew despite the fact that we face a tough pre-COVID comparable for the first five months. As we continue to improve our efficiencies, and benefited from a higher volume, we delivered an adjusted EBITDA margin of 21.3%, excluding the Canadian Emergency Wage Subsidy. That's an improvement of 120 basis points over fiscal year 2020 and 130 points over fiscal 2019. How did we achieve this resilience? Our decision to move into flexible packaging over seven years ago proved to be the right one. We started slowly, taking the time necessary to build our industry knowledge, build our team, while delivering great value to our customers. And then, in 2018, we took a big leap with our acquisition of Covers America, a pivotal moment for our company. And again, We took the time necessary to stabilize the business, increase margins by delivering on our synergies, and now we are seeing the results. As we continue to make acquisitions and grow organically through innovation by developing sustainable solutions for our customer, the percentage of revenue coming from a stable sector like flexible packaging will continue to rise, and this will serve to protect us in times of economic challenges. By continuing to generate strong free cash flow in the long term, our printing sector will participate in our growth and play a key role in our future. Here's why. We have seen another transformation in our printing sector portfolio. Thirteen years ago, newspapers, magazines, and catalogs printing represented a significant part of our revenue. Today, following the secular decline in those industries and our strategic portfolio management, only 15% of our printing revenue comes from these markets. Over the years, we successfully adapted our printing platform to the market and improved our cost base. We also offset some of the lost revenue by expanding into new verticals, like in-store marketing. We grew the in-store marketing business from about $12 million in revenue 10 years ago to a run rate of around $200 million today. And this is only the beginning of our ISM journey, as we have a long way to go and to grow. When we include other growing activities like book, pre-media, and also factoring our growing media revenue, These growth activities represent today around 35% of the combined revenue of our printing and media sectors. That percentage had increased significantly over the last five years, and we expect that it will continue to do so organically and through acquisitions. As they grow, these activities help stabilize print's overall revenues by offsetting the decline of other activities. Print is actually undergoing A similar successful transformation as TC Transcontinental went through with its move into flexible packaging. Finally, another important strategic shift has been in our media sector. Over the last several years, we sold almost all of the publishing assets to retain only those related to education and to the construction industry. Markets that are not dependent on advertising revenue. and these have proven to be not only resilient, but growing as well. I am proud that we have successfully transformed TC Transcontinental and each of our three sectors, and I'm equally proud that we did so while maintaining a strong balance sheet. While we always used leverage prudently, we were not afraid to take calculated risks when opportunities showed up. For example, we invested over $800 million 13 years ago, to build a state-of-the-art national print platform, a key strategic move that led to our successful consolidation of the Canadian print market. The success we have today in our print sector is, in part, a direct result of these investments. We were not afraid to do it again in 2018 when we acquired Coverse Americas for $1.7 billion, another key strategic move The cement are moved into flexible packaging. We then successfully integrated the acquisition and delivered on the plan synergies and our margin improvement objectives. And each time, we use our strong and stable cash flow from operations to bring the debt level back below two times in order to be ready for the next opportunity. This sound financial management is another one of our strengths. We can do this again given the opportunity. I am leaving today very proud of what we have accomplished as a team. Simply, we did what we say we would do. We transformed the company by divesting assets in declining markets and entered a flexible packaging space. We also built a strong printing sector with solid profitability and growth potential in a significant portion of its portfolio. I am confident that TC Transcontinental has a bright future for three simple reasons. First, our strategies are sound and have put us in a leading position in the three sectors we operate in. Second, our solid financial position gives us the means to achieve our ambitions. It allows us to continue to invest and transform our print and media portfolio and to grow our flexible packaging platform while delivering on our sustainability objective. And third, we have an experienced and talented team with Peter, a great successor, lined up the right person for the job. Unified by a strong corporate culture, the team is working together with a common long-term vision. Finally, I'd like to thank our employees for the many years of hard work and dedication, the customer for their confidence, the board of director and the Marcu family for their guidance, trust, and support over the year, and finally you, our analyst and investor, for a productive relationship over the years. As a credit to you, many of your program questions have helped us refine our thinking. Your feedback and advice over the years has been much appreciated. With that, I'll turn it over to Peter.
spk07: Thank you, Francois. Since joining the board in 2018, I've had the opportunity to watch TC develop from Canada's print leader, complemented by a solid specialty media group, into a business that is balanced by its strong packaging operation. Spending time with Monsieur Marcoux, Isabelle, and Francois, I appreciate the effort and passion that has created a successful business, driven by a strong culture and entrepreneurial spirit. Over my first six weeks, I've worked closely with Isabelle and Francois to ensure a smooth transition. I appreciate that Francois and the team positioned us to successfully transition the business's leadership by focusing on finishing the year strongly. This gave me the opportunity to spend my first weeks meeting and listening to coworkers and customers. Having had one-on-one meetings with over 70 coworkers, I can confirm the quality of the team. Our coworkers are smart, hardworking, good people who exemplify TC's values and who are determined to win. Having had the opportunity to meet many customers, I'm convinced that the team has established strong relationships. Our customers appreciate that TC is an organization that is committed to supporting their success. Francois should be extremely proud of the team he has led and the business they have built. The investments in people, innovation, and capital have been positioned us to be the leader in all our sectors. So to conclude, I appreciate the trust that the Marcoux family and the board have placed in me. I've loved my first six weeks. And as I take on the role of CEO, I'm excited by the opportunity to work with the team and build an even stronger business. And now I'll hand it over to Danelle.
spk08: Thank you, Peter, and welcome. On behalf of the management team and I, let me take a moment to thank you, François, for your many years of leadership and dedication to our customers, employees, and investors.
spk11: I know I speak for all of us when I say that we will miss you and wish you all the best. Now, turning to our results.
spk08: In terms of numbers for the fourth quarter, on slide six, We reported an increase in revenue of $120 million, or 18.3% versus last year. This was driven by higher pricing in packaging following our diligent pass-through of higher resin costs to our customers, by organic growth in packaging and print, and by the acquisition of BGI Retail in our print sector. This year, the fourth quarter also included an additional week. Excluding the extra week, both the print and packaging sectors recorded solid volume growth. As expected, the revenue growth was partially offset by a negative currency impact of $16 million, mainly in packaging due to the rise in value of the Canadian dollar versus the US dollar. On the profitability front, EBITDA was negatively impacted by the three same factors as last quarter, but to a lesser extent. First, we received a much lower Canadian wage subsidy this year. We received 3.7 million this quarter versus 14.5 million for the same quarter last year. Second, short-term contractual lags passing through higher resin prices to our customers. And third, the stronger Canadian dollar. In total, these three factors impacted EBITDA by more than $20 million in Q4. We were able to offset most of these headwinds with strong operational performance, higher volume, and with the extra week to deliver an adjusted EBITDA of $140.5 million for the quarter. Considering the business context in which we operated, inflation, labor shortage, and supply chain issues, this was a strong performance. Financial expenses increased slightly following a currency gain recorded last year and also due to the extra week this year. The tax rate was at 23.7% in the fourth quarter, in line with our mid-20s guidance. leading to adjusted net earnings of $0.81 per share for the quarter. Now, moving to slide 7 for the sector review. In our packaging sector, in the fourth quarter, we recorded organic revenue growth of $88.1 million. This was mainly due to the pass-through of higher risen prices but also included the positive impact of having an extra week and volume growth of more than 2%. I highlight the strong performance of our advanced coatings group during the quarter. Going forward, this group should also benefit from the recent acquisition of HS Crocker as one of its two plants is specialized in labels for the pharmaceutical industry. In addition, to the launch of the total medical product portfolio. We also continue to see solid performance from the rest of our packaging groups. Exchange rates, mainly the strong Canadian dollar, had a negative impact of $14.9 million, leading to packaging revenues of $417.4 million in the fourth quarter. Moving to profitability, As risen prices were still increasing in the spring and summer, we still had a negative impact in the quarter from the lack in passing through price increases, although lower than what we saw in the last two quarters. Despite this impact, we were able to deliver an EBITDA of $57.9 million. The latter was in line with last year due to good operational performance, volume growth, and the additional week. Considering that it included over 300 basis points of negative risen price impact caused by the lag in pass-through and dilution caused by a related increase in revenues, we were also pleased with the EBITDA margin of 13.9% for the quarter. Excluding the impact of risen prices, packaging margins would have been higher than last year. On slide eight, You can see that our printing sector had another very strong quarter with 14.4% of bargaining growth versus Q4 last year. The extra week was a contributor, but excluding its impact, we also saw strong business recovery with bargaining growth in the mid-single digits. It was especially high in our growth activities like in-store marketing and book printing where we saw double-digit growth. This growth was driven by existing customers spending more and by new customers. Revenues in the quarter were also positively impacted by the acquisition of BGI Retail in the in-store marketing space. As Francois mentioned earlier, our print portfolio is changing and a larger part of its revenues is coming from growth activities, both organically and through acquisitions. Printing adjusted EBITDA for the quarter was $81.1 million compared to $79.5 million in Q4 2020. This is a solid performance when we consider that the wage subsidy was $9 million lower than last year, a demonstration of our efficient operational performance. Excluding the wage subsidy, adjusted EBITDA margin in print for the quarter was at 23.3%, in line with last year. On a full year basis, it was 21.3% compared to 20.1% last year, a 120 basis point improvement. In our media business, you may recall that seasonality was more pronounced in Q4 last year. This year was back to a more normal level with approximately 38% of its annual revenues in the fourth quarter. On a full year basis, the media sector had another excellent year with close to 10% revenue and EBITDA growth when excluding the subsidy received in 2020. Corporate expenses were higher than last year, mainly due to the stock-based compensation and non-recurring costs that included the extra week and our vaccination clinic. Turning to cash flow from operating activities, we generated $92.7 million in the quarter. The variation with last year is mostly due to higher inventory, which continues to be impacted by risen prices. As we indicated last quarter, we continue to increase our investment in CapEx with a total spend of close to $34 million in the quarter, bringing us to $138 million for the year. These investments will position us well to capture growth opportunities and will help us meet our 2025 sustainability objectives. Finally, we distributed $19.6 million in dividends. Despite the investments we made during the quarter, we continue to maintain a very strong financial position with over $660 million of available liquidity at the end of the quarter. In conclusion, overall, we delivered an excellent quarter and ended the fiscal year strong. As for the outlook, in packaging, following the investments we've made in new equipment, the signing of new customer contracts, and the introduction of new products to market, we expect to generate organic growth for 2022, excluding the impact of risen prices and the 53rd week of 2021. As for profitability, we expect to grow packaging EBITDA in fiscal year 2022. Assuming no major RISN price increases, the negative impacts from the lag in RISN pass-through we experienced this year are not expected to reoccur. RISN will, however, still have an effect on margin percentage due to the higher revenues. This being said, the strong efficiency gains we made during the year across all our sectors will stay with us and should reflect it in our profitability. In print, we expect volumes to continue to recover. We also expect to see growth in our in-store marketing, book printing, and other growth activities. This gave us confidence that we should see higher revenues in fiscal 2022 when excluding the extra week of 2021. In terms of profitability, we don't expect to receive any wage subsidies in fiscal 2022, but we expect volume growth in printing to act as a partial offset to that. Therefore, excluding the impacts of the subsidy and the additional week in 2021 we expect growth in adjusted EBITDA for fiscal year 2022. Corporate costs at the EBITDA level should be around $40 million for the year. In terms of the use of cash for the year, we will continue to pursue potential acquisitions and invest in our future through our CapEx program. To that end, depending on the timing of potential key investments, CAPEX in fiscal year 2022 is likely to be similar to 2021. Our tax rate should continue to be in the mid-20s, and as for cash taxes, we estimate around $60 million for the year. On that note, we will now proceed with the question period.
spk01: Merci. Mesdames et messieurs, nous allons maintenant procéder à la période de questions et réponses. Thank you. One moment, please. Ladies and gentlemen, we will conduct the question and answer session. If you have a question, please press star followed by the number one on your touchtone phone. One moment for your first question. Your first question comes from Mark Neville from Scotiabank. Please go ahead. Your line is open.
spk12: Hi. Good afternoon. First off, Francois, congratulations and best of luck. And Peter, congratulations as well. Maybe my first question, just on pricing within packaging. At this point, have you sort of fully caught up on your pricing adjustments? If not, sort of how far are you behind? And so when can this sort of be expected to be fully caught up?
spk09: yeah we're all uh we're all almost there uh you know just a couple more months uh you know most of them is about a two to three month lag we had a few at six that are longer to caught up but they're not meaningful so i would say one or two more months and we have seen in certain grade of resin uh price decrease so it should uh and uh you know in some area uh stabilize and uh maybe even for some we are at the end of the line.
spk12: Okay. In terms of the outlook for 2022, just trying to, I guess, estimate sort of baseline. Again, you're sort of excluding shoes and a few other things you're expecting growth, but I guess my question within print is sort of the 21.3% margin, the number to think about growing off of on whatever the sales might be, and then I guess the same question within packaging. Again, just trying to find a baseline for EBITDA or EBIT, sort of X-ing out all these one-time items.
spk08: On the margin, obviously, we're very proud of the 21.3% that we delivered in fiscal 2021. I think it's our best margin going back to 2017, if I'm not wrong. And we said it for many years, the intention with print is to protect the 20% margin and to produce a lot of free cash flow. So this is the direction we're going. Obviously, we're growing in business like in-store marketing that are not the same margin that we have in the other business, but those margins are going up. So 20% is really what we're aiming for to protect in the future.
spk12: Okay. But in terms of the maybe absolute dollar figures, when you're talking about growing next year, each segment sort of excluding the wage subsidy, excluding extra week.
spk11: Is there sort of round numbers you can help us with in terms of what you're talking about?
spk08: Regarding model, you know, you may talk with Jan, but what we're certainly facing is that the first five months of fiscal 22 will have an easier comparable if we compare to last year. If you look at the The growth that we had this year first quarter were very negative compared to 2020, then almost flat second quarter and I think close to 15% in the third quarter and again, good growth in this quarter. So from what we see, and obviously I won't comment on what's going to happen with COVID in 2022, but the threat is good at least for the first half of the year. And we have good momentum with the part of the business that's growing right now. So this is where overall we're confident to deliver growth in 2022.
spk12: Maybe one last question.
spk11: Have you disclosed your purchase price for the Kroger acquisition?
spk10: No. Okay. Thanks for your time. Appreciate it.
spk01: Your next question comes from Drew McReynolds from RBC. Please go ahead. Your line is open.
spk02: Yeah, thanks very much. Good afternoon and congratulations, Francois and Peter. Francois, I just want to say it's been an absolute pleasure working with you. Just a class act all around, so just all the best in your future. Thank you. A couple of just follow-ups for me. I guess one just big picture for you, Peter. I know obviously it doesn't sound like there's really any change here in the strategy or the priorities for the company, but maybe talk to that at a high level. And then secondly, on the CapEx, a little higher in fiscal 2022 than certainly what is in our model. As we look kind of through the medium term, is this now – a new run rate for the total business, or do you still expect some ebb and flow from these levels?
spk07: Thanks, Drew. So what I'd say is first, while I'm new to the day-to-day, and there's certainly a difference between day-to-day and being a member of the board, I've been part of the board for quite a while now. So from a strategic point of view, I've been across and been part of the board team that's approved the company strategy. So for me, more than excited to take on the role, understanding that we have a print and media business that are very strongly positioned to create value for our customers. We have a print business that now has legs that have growth elements to them that I think are important and to continue on. So for me, there's a strong future for print. And from a packaging perspective, you know, I come from that part of the industry, and I'm excited by the opportunity to grow the business significantly. So I don't see a change in the strategy.
spk08: In terms of your number, Drew, for the model, as we said, you know, in 2021, we're higher than last year. We say that this year we might be close to 2021, but those are specific years where we invest in capacity growth, innovation, and sustainability, but I won't say that this amount is the new benchmark. It's specific to some investment we'll make over a two-year period, but this is not the benchmark for the long-term with the current upline the way it is right now.
spk02: Okay, super. Maybe one follow-up, and it's a little bit related to the last question. You quantified the impact of the extra week at $57 million in revenue. Can we just kind of simplistically roll that down to EBITDA to get, you know, an EBITDA impact of that extra week in the quarter? Is that kind of a fair way to do it?
spk08: Yeah, you can make some, you know, regarding the sectors, but don't forget that corporate doesn't deliver any EBITDAs without an extra cost. So it's not a question of divided, you know, by the number of weeks, but it will give you a good benchmark by doing so, but consider that we have expenses that corporate
spk11: Got it. Got it. Yeah. Thanks for that. Okay. Thank you very much.
spk01: Your next question comes from Steven McLeod from BMO Capital Markets. Please go ahead. Your line is open.
spk03: Thank you. Good evening. Good afternoon. Evening. First of all, congratulations on your long tenure and Peter, I look forward to working with you. A couple of questions here. Specifically, when you think about the packaging segment in the quarter and sort of what you've seen on the year-to-date basis, can you talk a little bit about where you're seeing the volume growth in terms of the end markets and the segments and if there's any differentiation across that spectrum?
spk09: Well, don't I mention advanced coding in the medical space? We had a good quarter last But for the most part, all the sector we operate in, whether it's the dairy, the consumer space, or the agriculture in Latham, the level of activity is pretty good. So everybody participates to the organic We expect everybody to participate in 2022. So we highlighted for Q4 the coding business around the medical space that had the best year-over-year growth. But there's not a specific sector that is overperforming or one that is underperforming. We have good loading in most of our factory. And frankly, we have more supply chain issue in terms of delivering our customer
spk11: then we have right now a problem with the loading. Great. Thank you.
spk03: And then for Peter, you know, I know you sort of addressed this in previous questions, but can you just talk a little bit about sort of where your priorities are? You know, obviously understanding that there's no necessarily change to strategy considering you've had a board oversight on that.
spk11: But can you just talk a little bit about where your priorities are over the next sort of six to 12 months?
spk07: I'd say, Stephen, is my priorities in the short term really has been around customer and coworkers. And so for me, I don't want to pretend that after six weeks I'm going to extend to telling you what my focus will be over the next year. I think the starting point is to get a strong understanding of the business. and speaking to people and customers gives me the strong understanding, and I still have a bit of work to do there. So I think when we catch up next quarter, I'll be in a better position to answer your question more fully.
spk03: That's great. Thank you. And then just finally, I was wondering if you could sort of just summarize, if you have it in front of you, just the CEWS dollar impact in both the printing segment and the packaging segment.
spk08: Well, in the packaging segment, this year, you know, didn't have any impact. We received minimum dollars. But overall, at the concept data level, you know, we received this year 50% of what we received in 2020. And obviously, as I said in my opening remarks, we don't expect to receive any dollars. So you can look at our NDNA, but it's close to 30 million of, if you want, negative coming from that index.
spk11: print level.
spk01: Okay, that's helpful. Thank you. That's it for me. Ladies and gentlemen, if there are any additional questions, please press star followed by the number one. Your next question comes from Adam Shine from National Bank. Please go ahead. Your line is open.
spk00: Thanks a lot. Good afternoon. So Francois, goodbye, at least as it relates to Transcontinental. And of course, I wish you well. And meanwhile, hello to you, Peter. Just a few questions left, I guess. You know, in packaging, something that looked interesting was that the Canada revenues doubled. Is there anything specific to that? You know, whether it's, again, the advanced codings or just general performance, but that one sort of stood out as interesting. Maybe I'll pause there and move on to the others after. I think we'll need to take that offline. I'm kind of surprised by your comment. You just mentioned that the Canadian revenue of packaging has doubled.
spk11: Yeah. Well, we'll take it offline. Okay.
spk00: It's surprising to me. Okay, fair enough. When we think about some of the disclosure around printing as it relates to Outlook, Is it fair to say that given the moving pieces and acknowledging X-ing out the 53rd week, that the level in fiscal 2022 should be ultimately slightly above that of fiscal 2020? Is that a reasonable way maybe for you, Donelt, to look at printing revenues?
spk09: It will be above, Adam, because what's happening is the things that are decreasing now in printing the most are not a significant part of the portfolio anymore. And what is growing double-digit like ISM and book is becoming to be a more significant part of the portfolio. And retail has been growing this year compared to the COVID year, and we expect especially with what's going on with the price of food going up in Canada, that the retail flyers are going to be more relevant than ever before going forward. So that's why we, Donald mentioned that excluding the 53rd week, we see growth in printing. And the transformation of the portfolio is that 35% of the And we have a view to make that, to continue to grow that. So the outlook on revenue, you know, is going to improve from what it was a couple of years ago. The only thing that we are not sure about is the impact of the COVID in 2022. And nobody could predict that. And obviously, when restrictions happen, you know, in general, retail is affected. And when retail is affected, well, a big part of the print ISM is in retail. So, yeah, that's the color I can give you.
spk00: Okay. I appreciate that. And then maybe just one last one for Danelle, just in regards to the $40 million or so of outlook and corporate cost line for fiscal 2022, sort of similar to that of the past year. Obviously, some puts and takes, some benefit perhaps earlier in the year. On the queues at the same time, you know, you did have some additional costs, as you alluded to on the vaccination front. Anything else in terms of incremental buckets of items, whether it's headcount or anything else that we should be thinking about in terms of moving forward into next year?
spk08: No, no, I think if you compare to this year, obviously this year we have some one-timer, but the share, as you know, the share units has increased, and you're aware that we hedge most of the cost impact, but volume-wise, we were hit this year, and I guess it's the new trend, because now, since the acquisition of Cobras, we have more people that are part of this program, so therefore, this is the first year where we have the full run rate of the new cost of this program. So this is why it's higher this year. It was higher for another few one-timers, but this is why we're comfortable with the $40 million for next year.
spk00: Okay. Super. Thanks a lot. Yep.
spk01: Your last question comes from David McFadgen from Cormark Securities. Please go ahead. Your line is open.
spk05: Oh, thank you. Yeah, I just want to also echo my congratulations to Francois and Peter. A couple of questions. Just on the corporate cost lines, you indicated that fiscal 22, you expect it to be about $40 million. Was it $40 million in fiscal 21? Maybe you didn't hear that.
spk11: No, it was higher than that. I'll give you the exact numbers. It was $41.
spk05: Okay. And then, you know, in your outlook, you talked about packaging. organic volume growth in fiscal 22. You thought it would grow despite the additional week, but do you think it could grow even with that additional week in fiscal 22? Or do you think that's tough to say?
spk11: For packaging?
spk05: Yeah.
spk08: Well, I think what we should be similar in terms of percentage to what we had in 2021. So that's what we're aiming.
spk05: Okay. And then I was just looking at the cash flow statement. I noticed there's a large working capital drain or investment in fiscal 21. And I'm just wondering, do you think you could recover some of that in fiscal 22? Or what's the outlook for fiscal 22 on the working capital front?
spk08: Yeah, we definitely want to have a better working gap. But what really hit us this year is the impact of the risen price. And it hit us not only in terms of inventory, which the impact was very large, but also on the AR side, because obviously your sales, you're selling to your customer, therefore the AR comes with inflation of the risen price also. And on the supplier side, we use all the discount we can use, so therefore we're less affected by that. So overall, we're very satisfied with the way we manage the receivable, the AR in Canada, past the COVID impact. but most of the impact, as I said, is related to resin price. So if you compare to next year, I won't make any prediction over where will be the resin price. If it's stable or lower, we should be in a better position, and we will make sure that we get better on the working gap overall.
spk05: So do you think it sort of sounds like you would need resin price to decline, to reverse that?
spk08: What I'm saying is that by far the biggest impact this year to explain the negative over the working gap is linked with the price of the risen. A large part of inventory, you know, the largest increase was on the inventory side and was due to the pricing. A little bit of the quantity, you know, in this time where we have issues with the supply chain, we wanted to have a little bit more in our stock. make sure that if anything happens, we have enough to cover our needs for our clients. But price had a huge impact. I'm not saying that we bet on the risen price to decrease to have a better working gap. What I'm saying regarding your question is that next year, where we will be, we will make everything to be in a better position, but that's excluding the fact that risen price may have an impact again next year.
spk05: Okay. All right.
spk01: Okay. Thank you so much. There are no further questions at this time.
spk06: Thank you all for joining us on the call today, and I look forward to speaking to you soon.
spk01: Ladies and gentlemen, this concludes the conference call for today. Thank you for participating. You may now disconnect your lines.
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