Transcontinental Inc.

Mesdames et messieurs, merci d'avoir patienté et bienvenue à la conférence téléphonique concernant les résultats du quatrième trimestre et de l'exercice 2023 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 13 décembre 2023. Welcome to the TC Transcontinental 4th Quarter and Fiscal Year 2023 Results Conference Call. 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. As a reminder, this conference is being recorded today, December 13, 2023. I would like to turn the conference over to Yann Lapointe, Director, Investor Relations and Treasury. I would now like to give the floor to Yann Lapointe. LaPointe, Director Relations with Investors and Treasury. Mr. LaPointe, please go ahead.

Thank you, Joël, and good morning, everyone. Welcome to Transcontinental's fourth quarter and fiscal year 2023 earnings call. Before we begin, please note that the press release, the MD&A, along with financial statements and related notes, as well as slides supporting management's remarks, are all available on our website at www.tc.tc under the Investor Relations section. 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 Nathalie St-Jean, 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. 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&E 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, and they involve numerous risks and uncertainties, known and unknown. The risks, uncertainties, and other factors that could influence actual results are described in the fiscal 2023 annual MD&A and in the annual information form. With that, I would like to turn the call over to our President and CEO, Tom Amorex.

Thank you, Yann, and very good morning to everyone. Thank you for joining this quite early call, I must say. I'm pleased to be here with you to discuss IQ4 results, my first full quarter as a CEO. First, on safety, we improved again this year as a fiscal 2023 incident rate dropped by another 17%, following an improvement of 23% last year. We still have work to do to achieve an injury-free workplace, and yet we are moving in the right direction. Turning to Q4, we have continued to focus on our four key priorities. Number one, growing organically and profitably. We are pleased with our growth of 3% in adjusted EBITDA despite a decline in our volume. Number two, delivering a strong return on assets. In line with our new program to improve our profitability and our balance sheet, to which I will come back later, we have announced the closing of Atoma Wisconsin Packaging Plant and the transfer of its activities within our network. I also mentioned during a Q3 call the closing of a Montreal recycling facility with the integration of our plastic recycling activities directly into our team production plants. And we have announced in early November the end of Publisac and its gradual replacement by Radar throughout Quebec, as well as the rollout of Radar in Ontario and British Columbia. On the third, certainly a major highlight of the quarter, We've made great strides on the reduction of our net debt thanks to improved working capital for the third consecutive quarter, and to a lesser extent, the monetization of one of our buildings in Quebec City. This led to a very solid performance in terms of cash flows. Fourth, commercializing sustainable products. We're progressing well with the installation of our BEOPE line in our Spartanburg facility, and we continue to expect a start of production at the back end of spring early next summer. Now let's turn to our sectors. The packaging group ended the fiscal year on a strong note in Q4, concluding a year of growth. Lower volumes in the quarter were caused by lower demand, certainly due to the economic context, particularly impacting some non-food segments. And second by the end of this talking, which we could see early in the quarter. In our printing sector, we continue to face challenges in our book printing operations and our second steps to mitigate their impact in 2024. On the other hand, we are encouraged by the favorable opportunities in our retail service businesses, as well as the rollout of radar. And last, our media sector posted a strong performance in the fourth quarter. So altogether, we're satisfied with these results, given the current economic context, which may continue into the new year. Looking forward, we all agree that we need to do more to deliver higher profitability, and we need to generate better returns on what we've got. Decisive actions are necessary. This is why I've put in place an ambitious program to improve the company's earnings per share, as well as a balance sheet. This two-year program is expected to deliver early impacts in the second half of fiscal 2024 and recurring savings between $20 and $40 million in fiscal 2025. We have four main categories of actions. The first is to reduce addressable fixed costs across the organization. The second is to make decisions on less profitable activities with two options, either a quick turnaround or a consolidation. The third is to target a reduction of the cost of goods sold, basically leveraging members of our operational excellence, procurement, and R&D teams combined into one project team to deliver savings. And fourth, sell real estate assets which we anticipate to be approximately worth $100 million, and this is a first step. as this is part of a program which can continue beyond the first two years. With increased profitability and a stronger balance sheet, we will be better positioned to grow in per share. This program is perfectly aligned with our four key priorities, and it is the right thing to do at this point in time, especially in the current macroeconomic context. I strongly believe in it, and our team is fully mobilized to execute it smartly and diligently. Now, over to you, Donald.