Thank you, Joelle, and good morning, everyone on the call. Welcome to TC Transcontinental's fourth-quarter and fiscal 2025 earnings call.

Before we begin, please note that you can find on our website our quarterly report, including financial statements and related notes, as well as the slides supporting management's remarks. 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 Laurence Bousicaux, 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 reference 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&A 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. Forward-looking statements also involve numerous risks and uncertainties, known and unknown.

The risks, uncertainties, and other factors that could influence the actual results are described in the fiscal 2025 annual MD&A released yesterday and in the latest annual information form. With that, I would turn the call over to our President and CEO, Thomas Morin.

Thank you, Yan, and good morning to everyone. We spoke only a few days ago, welcome again.

This morning, we will review our Q4 and year-end results, and provide an outlook for the new TC Transcontinental following the announcement of the sale of our packaging business, which is expected to close in the first quarter of calendar 2026. 2025 was a year of tremendous progress on safety.

The improved processes we put in place enabled us to reduce the number of accidents by an outstanding 39% year-over-year, after a reduction of 9% between '24 and '23. I'm very proud of the work our packaging and retail services and printing teams in getting us closer to our zero-injury vision.

Once more, I am pleased to report an improvement in our adjusted net earnings per share for the fourth consecutive quarter, resulting in a significant growth in net earnings per share of 10.7% for the fiscal year 2025. The packaging sector's organic top-line growth in the fourth quarter is primarily driven by higher volumes.

For the full year, packaging's adjusted EBITDA was up 3.7% over the previous year when excluding the effect of the sale of industrial businesses. In a weak demand environment, this result is primarily due to our cost reduction initiatives and a favorable exchange rate.

Turning to retail services and printing, after an excellent performance in the first nine months of the fiscal year, Q4 was a difficult quarter, as a direct consequence of the labor conflict of Canada Post. Since last week, we're back to 4.8 million weekly copies of raddar distributed by Canada Post across Quebec and British Columbia, and we are exploring opportunities for our customers to expand raddar's geographical footprint in fiscal year 2026.

Turning to our newspaper printing business, we're pleased with the 10-year extension of our printing agreement with The Globe and Mail announced yesterday. Our partnership with The Globe and Mail is the longest-standing partnership in Canadian newspaper printing, with a collaboration that spans 40 years.

Through four decades, both organizations have consistently invested in improving capabilities and expertise to maintain an exceptional performance. As mentioned by Andrew Saunders, the Globe's CEO, print is viewed today as a powerful and trusted medium in the media landscape.

In Q4, we've also been able to renew multi-year contracts with major retailers for an expanded range of services, from flyers to in-store marketing to content solutions. Q4 was also marked with the acquisitions of Mirazed and Inter-Graphics, right on the heels of the acquisition of Multiton in Q3.

We are pleased with this achievement, which brings our ISM business close to $300 million in revenue. For the full year, our adjusted EBITDA for the sector was stable compared to the previous year, despite the Canada Post situation.

In summary, we delivered a solid financial performance in 2025. This was largely due to our discipline in implementing our priorities and controlling our costs.

As discussed on Monday, our robust financials puts us in a favorable position to begin an exciting new chapter in the history of TC Transcontinental. Over to you, Donald.

Thank you, Thomas, and good morning, everyone. Moving to slide 5 of the earnings call presentation.

For the fourth quarter, we reported revenues of $732.4 million, a 2.3% decrease versus last year. This decline was caused by lower volume in the retail services and printing sector and the impact of the sale of the industrial packaging operations.

It was partially offset by the recent acquisitions in ISM, higher volume in the packaging sector, and a positive exchange rate impact. Regarding profitability, adjusted EBITDA decreased by 3.2% to $137.6 million.

This decrease is mainly due to lower volume in the retail services and printing sector caused, in part, by the effect of the labor conflict at Canada Post. Financial expense decreased by $3.1 million, mainly due to a lower debt level following strong cash flow generation in the last 12 months.

Adjusted income tax decreased by $2.2 million to $19.4 million and represented an effective rate of 22%. This led to an adjusted earnings per share of 82 cents, a 3.8% improvement compared to 78 cents for the same quarter last year.

On a full-year basis, adjusted earnings per share grew by 10.7%, mainly due to improved profitability and lower share count. Now moving to slide 6 for the sector review.

In packaging, we generated organic revenue growth of 2.8% in the quarter. This was mainly due to volume, and was more than offset by the impact of the sale of the industrial packaging activities in November 2024.

In terms of profitability, adjusted EBITDA in packaging grew by 3.3% to $67.9 million. Margins increased by 60 basis points to 16.4%.

Following the announcement of the sale of the packaging sector earlier this week, we will disclose this sector as discontinued operations in the first quarter of fiscal '26. Moving to retail services and printing sector on slide 7.

After a solid performance for the first three quarters of fiscal '25, the results of the fourth quarter were significantly impacted by the Canada Post labor conflict. Revenues decreased by 4.3% to $275.9 million.

Adjusted EBITDA decreased by $9.5 million, or 14.9%, to $54.1 million. The decrease in revenues and adjusted EBITDA are mainly due to lower volumes for flyer printing activities as they were impacted by Canada Post disruption.

Now turning to cash flow. As expected, and in line with normal seasonality, the fourth quarter of fiscal 2025 was a strong quarter.

We generated $172.5 million from operating activities compared to $185 million in the previous year. We had a positive working capital of $64.9 million, offsetting a large portion of the working capital usage of the first nine months of the year.

Our CAPEX, at $23.3 million, were in line with last year to bring us to a full-year total close to $100 million, a $22 million reduction versus last year. Despite our recent acquisitions in ISM, we continued to improve our net debt ratio to reach 1.59 times at the end of fiscal year compared to 1.68 times three months ago.

Moving to the sale of our packaging assets, we expect the transaction to close in the first quarter of calendar 2026. We plan to use the proceeds from the transaction for an approximately $20 per share distribution to shareholders.

In addition, net of transaction fees, we will use the majority of the remaining proceeds to reduce our net debt. We expect a pro forma net debt of about 1.7 times post-transaction.

In terms of outlook for 2026, on the upside, we expect growth in our ISM activities, organically and with the impact of our acquisitions. Also, the impact of the Canada Post labor conflict should be limited to our first five weeks of the first quarter of fiscal 2026.

We also expect growth in our media business. We will align our corporate costs with the size of our business, as we have always done.

The 2026 corporate expenses will depend on the date of closing. While we expect to reach a lower run rate in the second half of fiscal year, you can expect to see the full impact of the cost reduction in fiscal 2027.

On the downside, we expect lower volume in our traditional activities, including book printing that had a very strong fiscal 2025. As a result of these consideration, we expect to deliver a stable adjusted EBITDA in fiscal 2026 compared to 2025.

In terms of capital allocation, we expect CAPEX for remaining business to be around $60 million in fiscal year 2026. As for cash taxes, it should be around $30 million in fiscal year 2026.

On that note, we will now proceed with the question period.

Good morning. Maybe let's start with Thomas on book printing.

The indication in Q4 was that it was just slightly lower. Can you maybe speak to whether you are still seeing volumes from that US outsourcing customer, and inasmuch as the outlook, as Donald referenced, suggests that book printing does face a tough comp and could be lower, any particular optimism in regards to how that particular customer continues with you and/or opportunities, given where FX continues to stand, to pursue other outsourcing opportunities in book?

Then I'll just follow up with another question.

Sure, and good morning, Adam. We had, as a pretty good year 2025 in book, and this was mainly due to what you mentioned.

In other words, getting shares and getting businesses in the United States, leveraging on the exchange rate. This is unwinding as we speak.

We had a couple of nice, good contracts, which are coming to an end. That's explaining why the volumes start to go down, and why the outlook for next year is not as good as this one.

Now, that being said, the team has started already and earlier on this year to develop a long list of prospection and business development in the United States. It's a bit too early to say, but what I can tell you is that the team has been extremely active in identifying leads, and we expect some of these leads to unwind in 2026.

Just to add on Thomas's comments regarding your question, I think what's playing for us, Adam, as is we're still close, well, this morning at 1.38, and one of the reason we were able to gain new business last year was the fact that, about the same time last year, we were at 1.40. Actually, the big contract that we won was in that period last year, early 2025.

Therefore, we're confident, but we said it in couple calls earlier, that was a big one-timer, very positive for us. This is why in the forecast we remain confident, but we say it might be a decrease.

Okay. Then pivoting to in-store marketing, obviously you guys have been pretty excited about this not just in F '25, but in prior years.

Can you maybe talk, Thomas, to the scope of the opportunity? I think you're continuing to look at strategic acquisitions in ISM.

Is there a particular objective in mind in terms of level of sales by the end of this year or perhaps over the course of the next two, three years?

ISM had actually a pretty good Q4. I think the top line grew organically by 1.8%, and on top of which comes the acquisitions.

This segment is still extremely fragmented, Adam, there is a lot of small companies. We have a long pipeline of opportunities.

There is, as we speak, two acquisitions ongoing, and we expect to close one and maybe two within the next two quarters. We don't have yet a full target for this segment.

I think we need to continue integrate those businesses and deliver the value from these acquisitions, but definitely there is a lot of opportunities from coast to coast in this segment.

Thank you very much. I'll leave it at that.

Thank you.

Thank you. Good morning.

Question pulling apart the 2026 guidance for flat EBITDA for the continuing operations. You addressed some of it in your comments in the previous question, but buried within the flat EBITDA guidance, can you speak to organic revenue growth expectations for ISM and some of the other bespoke growth businesses versus what you would expect in the legacy printing?

Just trying to understand some of the puts and takes in overall organic growth expectations.

In terms of organic growth in fiscal 2026, we definitely see ISM, obviously, the impact of acquisition will bring growth for sure, and we see this group still continue to bring organic growth. We see opportunities with the acquisition we have done to even increase the product that we sell to our current clients.

That will be impacted by what we call the traditional. Raddar is being stabilized, the flyer market in Quebec, but we need to stabilize the rest of Canada.

raddar right now is in Quebec and BC, and we're right now facing some decrease in the flyer market in the rest of Canada. Also, there's the book impact we just mentioned.

As we said in the call Monday, it's slightly decreasing if you look at net net organic growth, but we're getting closer where the group that are growing either ISM or even book that we think there might be opportunity will compensate for the decrease of the more traditional activities.

Okay. With respect to the corporate cost savings, if this transaction closes calendar Q1, I think the indication was you expect corporate costs to be halved over time.

Could we assume sort of half of that half is in fiscal 2026 of what's reflected in the overall EBITDA guide with respect to corporate cost reduction?

We've been prudent regarding the guidance. When we say we should remain flat is that the RS&P will probably, because of what I said, net of acquisition might be negative because of this decrease in book following a very strong year.

We're proactive as we speak. We've always been proactive, obviously, you know us, to let go cost to adjust the structure.

Too early to tell because there's timing, but we're confident that at the end of fiscal year, we will be able to remain flat and we will take all the action to protect that.

Okay. That's all I have for now.

Thank you.

Thank you.

thank you. Good morning, everyone.

Just wanted to drill down a little bit on ISM and maybe the outlook for 2026 and beyond. Can you just remind us kind of what the underlying organic growth rate is within that business?

Do you have an estimate of what your market share might be in that segment? Then I guess thirdly, I know it's very fragmented, but are there any other sort of larger or medium-sized players that, were you to do an acquisition, it would be more additive to sales than perhaps a tuck-in or something like that?

The organic growth for ISM is around 2% if we look at it from a 12-month standpoint. As I said, there is a long list of small businesses.

I'm talking about businesses of about $20 to maybe $40 million altogether. There is a couple of larger players in Canada, but there is a long, long, long tail, obviously.

I think your question is around what is the overall target of the share of wallet we would have. Difficult to say given this fragmentation of the market, but I would say it's probably in the 20-ish percent max at this point in time.

That's good color. Thank you, Thomas.

Then maybe just more of a housekeeping question, but once the packaging sale is completed in Q1, will you be breaking out corporate costs from within your other segments so we can see how that moves in isolation?

That's a very good question and actually something that we're working and we will be proactive to update the market regarding that, but we're not done yet how we will present the results, but you can expect that we will certainly present it a different way. The corporate costs, if you look at what will remain as a new company, it will be probably more as a one group with different segments.

That's something that we're working on as we speak.

Yeah. That's great.

Then I just wanted to ask about corporate costs just with respect to the previous question. I know that there are some moving parts around that for fiscal 2026 and how corporate costs decline post-sale.

I'm just curious, it would be fair to assume that you would see some reduction in fiscal 2026, is that correct?

That's for sure, unless we expect that the transaction will be closed in the first quarter of fiscal '26.

Calendar.

Calendar, yeah, thank you. Therefore, we will be acting during the year to adjust the corporate cost structure.

Yeah.

Yeah. Great.

Thank you, Donald. Thank you, Thomas.

Appreciate it.

All right, thank you. A couple of questions.

You talked about in your release that the retail printing or retail services and printing EBITDA was down. It seems largely due to Canada Post disruption.

What would it have been excluding Canada Post?

I'd say that we have about $5 to $6 million negative impact from Canada Post, at least. Yeah.

Okay. All right, thank you.

Then, in terms of the outlook, you give us an outlook for EBITDA, but what about revenue? You've gone through some of the puts and takes here in terms of revenue, but what's your expectation for overall revenue for 2026?

As I said earlier, we expect, obviously, growth in ISM for first acquisition and then organic growth. That will be negatively impacted by the rest of the business, the book printing that, as we said earlier, might have some negative following a very strong 2024, and the flyer market for rest of Canada.

Overall, as we said also Monday, I think we're getting close where the ISM and media activities will compensate, but in 2026, we might see slightly negative in terms of organic growth on the top line. Also, important to understand, as you know the model, the more we switch to raddar, it does impact also our top line, usually not the same on EBITDA, but since we're using less paper, that may have an impact also.

This is something to consider in 2026, like it happened in Quebec in 2024/25.

Okay. All right, that's helpful.

Thank you. Then just on the dividend, I would imagine you're probably not going to raise just a normal dividend in 2026 and you would probably wait until you see EBITDA growing or revenue growing organically, is that a fair assumption?

I think the first good news for 2026 is, following the closure of the transaction, we will have an important distribution of cash to the shareholder, and I like to highlight that we've been very active also in the two recent years, either by buying back and dividend, special dividend. We said in our presentation on the RS side that we expect to continue, obviously, to pay dividend, obviously smaller company, but still a very good yield, but this is something that will need to be approved by the board once the transaction is over to see where we're going in fiscal '26.

As we said also Monday, this NewCo, if we call it, will produce a lot of free cash flow, room for CAPEX, room for M&A, and also room for giving back capital to the shareholders.

Okay. All right, okay, thank you.

Thank you, everyone, for joining us on the call today, and we look forward to speaking to you soon.