Intertape Polymer Group Inc.

Thank you and good morning everyone. Welcome to IPG's 2020 third quarter conference call.

Joining me is Jeff Crystal, our CFO. During the call, we will make reference to our earnings presentation that you can download from the Investor Relations section of our Web site.

It was an outstanding quarter for the business. It all starts with our team.

We supply essential packaging and protective products to our distribution and end user customers. Our employees continue to perform exceptionally well as we deal with the changes to our work and life as a result of the pandemic.

Their commitment to show up and to perform their work in a safe and professional manner makes me proud. But it doesn't end when they walk out of the plant or office.

Their safety and health outside of work is just as important at this time. And they have demonstrated respect for their colleagues and their communities in this aspect as well.

Their emphasis on working safely and servicing our customers has ensured an uninterrupted supply of the essential products we produce. This work has resulted in our strongest quarter ever.

The numbers speak for themselves when compared to the prior year's quarter, 323 million in revenue in the quarter up 10%, 64.5 million in adjusted EBITDA up 40% which translates into a 20% adjusted EBITDA margin, and 59.2 million in free cash flow generation up 52%. Over the course of the past five years, we've invested in the business to build a world-class low-cost manufacturing base, with an emphasis on our key growth markets.

We made these investments for specific purpose to be competitive regardless of the economic cycle. Those investments have set the stage for what you were seeing now.

The pandemic has impacted businesses differently depending on the markets they serve. What is becoming clear to us is the structural change underway in ecommerce which is very favorable to us.

Increased demand in this ecommerce market, as well as in building construction and a return to positive performance in most of our other end markets was an important component of the growth we're experiencing. On the other side of the equation is the performance of the business.

Our plants continue to perform extremely well. We continue to effectively manage the spread between selling prices and raw material costs.

And the cost reduction program that we implemented earlier this year is providing benefits. Each of these elements contributed to our strong results in the third quarter.

After the initial onset of the pandemic, a common question we received from investors was when would the business return to its 2019 run rate. We've now exceeded that run rate based on the third quarter.

As we open the fourth quarter, our order book to-date remains strong, and is consistent with what we saw in the third quarter. As a result, we provided an outlook for the fourth quarter across a number of key metrics this morning.

Revenue in the fourth quarter is expected to grow by 10% or more compared to the same period last year. Adjusted EBITDA is expected to be between 58 million and 63 million in the fourth quarter, and free cash flow is expected to be between 35 million to 45 million.

The free cash flow figure takes into account a planned increase in our expected capital expenditures to a more normalized range, which brings us to our capital allocation strategy. Debt repayment remains our number one priority for capital.

With the robust performance in the third quarter, we were paid more than 49 million in debt and drove down our total leverage ratio to 2.7x. As we've mentioned previously, our targeted ratio is 2x to 2.5x and we've made great progress on approaching that range in the quarter.

However, as we've said before, we need to be able to walk and chew gum at the same time, our performance has created greater flexibility than what we initially envisioned at the onset of the pandemic. This morning, we announced the Board has declared a 6.8% increase to the fourth quarter dividend to 15.75 per share, or $0.63 on an annualized basis.

This increase represents an incremental draw of approximately 2.4 million of cash on an annualized basis. The dividend increase represents our confidence in the ongoing cash flow generation of the business.

At the same time with this flexibility, we've decided to increase our capital expenditure budget for 2020 to support growth initiatives in our key verticals, primarily ecommerce. Year-to-date, we've invested 21 million in CapEx, which put us on track to meet our initial outlook of 30 million to 40 million we established in March.

Based on the growth we're experiencing in the ecommerce end market, we've adjusted our 2020 full CapEx to be between 45 million and 50 million, which is still well within the range of a normal annual investment, which we have previously stated between $40 million to $60 million. These new investments support the growth we experience in ecommerce demand by accelerating capacity expansion in product categories.

Independent research reports the major ecommerce retailers have experienced strong growth since the onset of the pandemic. The report suggests the growth is being exhibited in a couple of ways.

Number one, an increase in active customer base, bringing new participants into the market that have not used ecommerce previously. Number two, an increase in order frequency.

Customers are ordering more often across a wider range of products. Packaging products targeted at ecommerce will benefit from these growth drivers.

The demand we're experiencing water activated tape and certain protective packaging products reflect the growth experienced by the major ecommerce players. The reports highlight, the structurally higher ecommerce adoption and order frequency will remain a tailwind into 2022 and beyond.

The shift from brick and mortar to ecommerce benefits us because of our disproportionately larger market share as many ecommerce players use water activated tape as their preferred box closure method, which is not the case in brick and mortar retail. ecommerce is not only an important vertical from a volume perspective, but it is also accretive to our adjusted EBITDA margin profile of the overall business.

We also continue to see strong demand in the building construction end market, which benefits our wovens and industrial tape categories. On the wovens business, the investment we made in building capacity in India, and the acquisition of Maiweave have improved the margin profile of this category.

Historically, the wovens business underperformed the average corporate margin profile, but that is no longer the case. The investment decision to build a woven greenfield in India has met its objectives through both structurally and materially improving the profitability and EBITDA contribution of this business.

This is even more meaningful given the current tailwinds we are seeing in the building construction customer channels. Overall, the diversity of both our end markets and product offering as well as the essential nature of our products have been core to the underlying performance of the business.

We believe one of the key strengths of the product bundle moving forward will be our capability to offer our customers and their end users sustainability benefits. We continue to invest in both new products, as well as qualifying existing products against recognized and credible sustainability standards in the market, so customers and end users can make informed decisions.

As an update, we recently received Cradle to Cradle certification for two additional products. Number one, our Woven NovaShield structure membrane, a wovens product which is proven material of choice for fabric buildings in all climates.

Number two, our stretch film that are used to palletized goods for shipping. In total, we've now received the Cradle to Cradle certification on four major product lines, including the earlier certifications for water activated tape, and shrink foam.

It is an understatement to say that this year has been a challenging environment but we believe the actions we have taken put us in a strong position to compete effectively through any market. We're seeing the benefits and profits and cash flow from the investments we've made over the past five years, both in CapEx and M&A.

And our performance in the third quarter supports our conviction, we have built a business that generates free cash flow serving essential markets. With that, I'll turn it over to Jeff to review the financials.

Jeff?

Thank you, Greg. On Page 8 of the presentation we present an analysis of our revenue for the third quarter.

Revenue was 323 million, an increase of 10% compared to the same period in 2019. The change was primarily due to increased demand in products with significant ecommerce end market exposure.

Volume mix accounted for 9% of the increase compared to last year primarily due to strength in water activated tape, mailers and void fill, each of which address the ecommerce market as well as woven which address the building construction market. In terms of underperforming categories, there was nominal pressure in acrylic and masking tapes, but it was marginal compared to the same period last year.

Lower prices impacted revenue by less than 1%, which were predominantly related to the management of spread on lower raw materials. Turning to Page 9 gross margin was 26% in the third quarter, an improvement of 422 basis points compared to the same period in 2019.

Greg called out the drivers of the margin improvement earlier specifically, the effective management of the spread between selling prices in raw material and freight costs and favorable plant performance as a result of both the leverage of increased production to meet demand and the benefit of the cost savings implemented in response to the pandemic. Adjusted EBITDA improved 40% to $64.5 million compared to the same period last year.

The improvement was primarily driven by the margin drivers I mentioned earlier being spread management and plant performance as well as cost savings measures within our SG&A expenses. Cash flows from operating activities improved by 19.2 million to 67.5 million in the third quarter compared to the same period in 2019.

The improvement was primarily the result of the higher gross profit. Free cash flows improved by 20.2 million to 59.2 million in the quarter compared to the same period in 2019.

The improvement was primarily due to the increase in cash flows from operating activities. As Greg mentioned, we have increased our targeted range of capital expenditures for 2020 to $45 million to $50 million to address strategic growth projects primarily related to ecommerce demand.

Our outlook for the expected effective tax rate remains unchanged at 20% is 25%. Cash taxes paid in 2020 are expected to approximate income tax expense which was taken into consideration when establishing the free cash flows outlook for the fourth quarter of 35 million to 45 million which Greg referenced earlier.

We expect the free cash flows for the fourth quarter of 2020 to be in line with the same period in 2019 once you take into consideration the increased CapEx to address the strong ecommerce demand, and the increase in cash taxes. Based on the third quarter results, our liquidity and the capital structure which were strong entering the pandemic have improved even more, we finished the third quarter with $372.2 million in cash and loan availability.

Our total leverage ratio at the end of the third quarter which includes the unsecured debt was 2.7x, which is an improvement of six tenths of a turn from the prior period. We did not have any maintenance covenant on total leverage.

Our secured net leverage ratio, which is our most important loan covenant came in four tenths of a turn lower at 1.4x compared to the second quarter of 2020 that level is well within its limit of 3.7x. With the onset of a second wave of new case counts in a number of regions, the duration of the pandemic is clearly uncertain.

What we do know today is how our business performs during both a severe lockdown experienced from March through June, as well as the less restrictive but still abnormal environment we find ourselves in today. We will continue to manage the business to ensure both the safety of our employees and high level of service to our customers in order to deliver for our shareholders.

Now I'll turn it back over to Greg for his closing thoughts. Greg?

Thanks, Jeff. It was a great quarter.

We endured the uncertainty of the first half of 2020. We had to be agile and proactive and we were.

The business demonstrated resiliency in the third quarter and based on the outlook that we've announced today, we expect more of the same in the fourth quarter. It's human nature to want to return to normal, it's familiar and well understood but we're operating in a new environment.

Changes have taken place in the market that I believe will endure. The new participants using ecommerce have accelerated the transformation of retail.

The increased focus on sustainable attributes in the supply chain is not going to disappear and as we all focus on safe and healthier lifestyle choices. Our business delivers on both fronts.

We provide essential packaging and protective products for the economy. We made a series of investments to build a world-class low-cost manufacturing base that can compete effectively in any market cycle.

And as we continue to make disciplined investments as necessary in markets where demand is growing like ecommerce and sustainability. It's an engine that delivers strong cash flows.

We have a strong balance sheet and a liquidity position that offers us the flexibility to be both defensive and offensive depending on the market cycle. These are the essential characteristics that position us to come out the other side of this pandemic in a very strong position in the market.

I'd like to thank our employees. This is a challenging situation for everyone.

I could not be more proud of how they've conducted themselves and the level of commitment to the organization they have demonstrated. It's truly tremendous.

With that, I'll turn the call back to the operator to open up the question-and-answer period. Thank you.

The sales increases, no doubt impressive. And I think we're all going to try to parse out, how much of the increase was structural versus cyclical.

And that will impart depend on how much ecommerce was driving the growth versus other categories, as well as gauging overall restocking. Any way you can provide us with, range of the ecommerce contribution to the organic growth or any general comments there.

So, I'll make a couple comments just overall, we take a restocking, we look at that kind of sequential chart this year of our order book. We really haven't seen anything but increased demand as we moved out of the shutdown.

So, certainly restocking doesn't appear to be apparent in our order book at this point like it hasn't dropped off in other words. And then, just on the margin side, and then Jeff can comment on ecommerce.

On the margin side, when we think of, the operational performance of the business, certainly you look at the contribution that we have out of our Indian operations in the quarter those played a key role in the EBITDA improvement outside of ecommerce.

Yes. And then, in terms of growth when we think of the quarter, I mean, certainly ecommerce was the leader in terms of generating the growth in the quarter which as you know we saw in Q2 as well.

And as we mentioned in our prepared remarks, you read all these more formal reports coming out there on the ecommerce industry and certainly people believe that that is a structural change that has accelerated the growth of ecommerce and that we intend to see that continue. But then, we also saw good growth as we mentioned in our disclosures around the building construction in retail side, that was quite strong.

And again, building construction, you see the stats out there that are public. And then, even on the retail side, we saw some good demand, some of that may have been restocking, but some of it, but a lot of it is also related to people who are doing things at home, do it yourself things, a lot of those types of supplies, where we're seeing heavy growth in the quarter and we continue to see that trend as well, with people not taking vacations and moving with work from home type setups, being somewhat permanent, for a lot of people, or at least partially permanent.

So we see good trends in those areas as well. And then, when I think about the rest of the business, like even the general manufacturing, transportation, food and beverage, we saw some marginal decreases, I guess, when you look at the quarter, but really, it was almost flat to last year.

So there wasn't really as much weakness in those categories, as you might have expected. So we continue to see that as well.

Great quarter, everyone. Very impressive.

I'd like to ask looking at next year or on your program, obviously, when we bring your organization in the Carolinas last time, it certainly [Technical Difficulty] suggested there was a lot of room expected in that low cost relative to the load of water activated [Technical Difficulty]. When we look into next quarter, how much have you built in with this increased growth CapEx that you're spending in the fourth quarter?

And should we see there for a larger than more range CapEx in 2021, as you further look to take advantage of the ecommerce growth opportunity?

Walter, you kind of broke up quite a bit there on the question, but I think I've got the gist of it. So if I don't cover it properly, please let me know.

So with some of the work that we're doing right now, on accelerating our CapEx for this year, some of that has to do with just debottlenecking, in certain cases, some production. So upgrading of existing equipment that will give us incremental capacity.

As it relates to the Midland facility, I think you referenced, we have not announced any further expansions in that facility at that point. So what we see right now is not expanding that facility.

And then, as we look into 2021, certainly the company has got lots of opportunities here from an organic perspective to grow. We're just working through our budgets right now.

And certainly, we'll come out with some kind of CapEx guide, I assume, when we announce Q4, so it's too early to talk about that at this point. But I will reiterate that, like in a normal state, I mean, this business from a CapEx perspective, should run about $40 million to $60 million a year.

Okay. That makes sense.

Hopefully, you can hear me a little bit better here. I switched over headsets.

Just my follow up question here is, is really on your pipeline, you mentioned, it's, it's a strong order book and you like what you see as you go into ecommerce here, or go into the ecommerce peak? How much visibility do you have into 2021 obviously, we're going to be putting together our own numbers here, as we look out in 2021?

Does your order book give you visibility six months, three months out, and those comments, are they really applying to the fourth quarter or do they extend here into 2021?

Well, listen, I think certainly there's some extension there as we were referenced, kind of the structural change that we're seeing in the business, right. So, I'm not going to comment too much on next year.

The other comments I will make is, some of the capture that we made from an operational improvement perspective, certainly we expect that to carry forward. And as you look at the revenue increases on our guide in Q4 plus 10 or greater than plus 10.

Certainly, there's a lot of leverage there as we move through our fixed asset base there.

And I guess, Walter, to your question, I mean, but what we actually see in our order books, typically three to four weeks out for the most part, so right, wouldn't have really strong visibility into that.

I just wanted to circle around on the gross margin, in a very strong Q3 and I'm just wondering if you can talk about some of the puts and takes as you roll into Q4?

Yes, sure. So, I think when you think about Q4, and what we expect to see even just based on our guidance there, you could see that the EBITDA margin, if you run a few scenarios on ranges in revenue and EBITDA that we provided should still remain at an elevated level, there may be a slight dip from the Q3 when you think of the EBITDA margin, as well as potentially the gross margin a little bit.

And that's because we did have, as I mentioned, on the last call in August, in Q2, because we had to take shutdown time as a result of the decrease in demand due to the COVID shutdown, we have to recognize all of the costs that were unabsorbed into our inventory in Q2. So we kind of got hit harder in Q2, for those shutdown costs, which typically would roll along with your inventory, right.

So Q3 benefited a little bit from that. But again, that's not a massive benefit so I would expect that to be a little bit of a headwind going into Q4, but besides that you have the cost savings initiatives, you've got the plant performance, you got the management of the spread and we expect to see the same trend there.

Okay. That's helpful.

Thank you. And then, I just want to clarify, Greg, your answer to an earlier question.

With respect to ecommerce CapEx investment, you said that you're not expanding Midland, so can you give a little bit of color of where that incremental capacity is going on the ecommerce side?

So we have two facilities that manufacture that product and we're doing some debottlenecking on the other facility and that's my reference to that CapEx. Certainly, when we think of that business, as well, we're looking at adding some capability as it relates to specifically around printing.

So those are where the capacity expansions are going right now.

My first one here is on Nortech. It looks like sales in the quarter were better than the previous quarter.

But it still looks like it's losing money on the bottom line. What are some of the factors driving that?

And do you have a good pathway to profitability?

Yes. So we talked about this a couple of times.

I mean, so Nortech was one of our harder hit businesses, as a result of all the COVID shutdowns and just generally the pandemic, because as you know, Nortech services the automated packaging industry. So they produce heavy packaging equipment.

And so we saw a lot of customers delaying orders early on in the pandemic and certainly have seen that over the last -- remainder most of the year. And so we are starting to see that alleviate now that we're starting to see customers come back to the table to fulfill orders that were previously made, as well as getting more traction on new orders.

So we think that this is a temporary issue. And we expect to see a lot more strength going into 2021.

That's great. My next one here is, I just wanted to circle back on the margins, because even if I take the midpoint, it looks like it's at 18.5%.

And previously you guys have talked about 15% as more of your long-term target. Can we assume that this is sustainable going forward, and this is sort of the new level?

So our target was always greater than 15% like it wasn't 15%, so I would always caveat that. Look with the visibility that we have right now and what we see as it relates to all of those factors that we discussed.

We see that margin staying there where we are with what we see right now.

Your 2020 guidance implies Q4 20 CapEx of 26 million to 27 million kind of at the midpoint, assuming I'm doing my sums correctly. Can you ramp up our spin on that quickly?

And do you have the 2021 CapEx preliminary?

So on the CapEx, specifically, we expect to ramp it up that quickly in Q4, there are a lot of projects that we've been looking at for the last 2, 3, 4 or 5 months that we're executing on. So we feel like we can execute on that, sometimes it gets a little lumpy with order acceptance and down payments and things of that nature but that's the visibility we have right now.

As it relates to 2021 as I said earlier, we're going through the budgeting process right now. And we're really not going to provide an update until we get through in March.

Certainly, there's lots of opportunities here from an organic growth perspective, however.

Thanks. And the other thing is, if I heard your prepared remarks correctly, I think you gave 2020 cash taxes of 35 million to 45 million in line with your [Technical Difficulty] taxes…

No. The 35 million to 45 million was the Q4 free cash flow guidance.

Cash taxes are expected to basically approximate the income tax expense.

Just want to circle back on the ecommerce. Are you able to break down year-over-year growth and revenues as a total of -- as a percentage of total revenues?

Ecommerce, we haven't broken it down. But, certainly, the ecommerce would be a large piece of it.

Like I said, we saw significant growth as well in the building and construction retail channels too.

And Scott we expect to -- at the end of this year recalibrate, we had that disclosure at the end of Q1, the end markets that we serve. And we would expect to update our shareholders with that at the end of 2020, when we announced q4.

Okay. That's great.

And can you talk about how much of that growth without giving figures in ecommerce is water activated tape? And how much is protective packaging?

Yes, I mean, we saw tremendous growth in both honestly. Water activated tape was definitely a very strong growth driver and certainly a larger product line.

But we saw tremendous growth when you think of void fill in protective packaging, both paper void fill, plastic void fill, as well as mailers.

And then on top of that, I would also include that we've seen tremendous growth in our dispensing equipment that we sell into ecommerce. So the machine where you going with the consumable and then on top of that, we've continued to deploy our service around those piece of equipment in these fulfillment centers.

So obviously, you have some big customers, but it sounds like you're getting some pretty good growth out of the smaller customer base, so folks have never really been taken in the online presence. Is that correct?

Yes. What we're seeing there and that's a good question or good comment.

What we're seeing there is obviously the percentage of growth being much higher than the bigger people. And in some degree, they're playing catch up.

So we definitely benefited from that in that space, in ecommerce as well.

That's sounds fair. Still there looks like it's been showing much lighter growth, just a little bit over 3% in the last quarter.

And are you seeing -- final question -- are you seeing any change in customer usage patterns between water activated tape and polymer tapes?

I would say like as a percentage of what's being consumed. I would say things somewhat the same.

We're seeing opportunities, however, I would throw it that we're seeing opportunities globally to convert from plastic to water activated tape. And in some cases convert from plastic to a pressure sensitive paper tape.

Those would be in places like Asia, into parts of Europe. So certainly there's opportunity there to convert from another sealing method.

Maybe just one word. Can you give us an idea on the margin dollar difference between the two, between water activated tape and the polymer?

I would say on the margin side, it's pretty close.

On $1 basis or a percentage basis.

Percentage basis.

Percentage basis.

Congrats on the quarter. First question for you on, across the company what kind of available capacity do you have in existing facilities, so underutilized assets?

Oh, Zach, because it's very difficult just within the mix. And many of our products have multiple steps they have to go through to get to their final component.

So, you have extrusion, you have coating, you have converting, you have printing, you have things of that nature. So it's a pretty complicated capacity soldier.

What I would say, though, is in many of our areas that we are participating within ecommerce, we are bumping into some capacity issues in those areas. And you're seeing some of our reaction to that through the increase in our CapEx guide for 2020.

And we think there are, as I said earlier, some opportunities specifically around debottlenecking. Some of the equipment that is capacity restrained and move forward and open up some capacity.

But I would also say that just to give you a little color because again, the capacity question that's difficult to answer, in most of our plants right now we are busy, very busy.

That's helpful. Thanks.

You mentioned printing equipment to help debottleneck the white line effect. And can you give us any other examples of the specific de bottlenecking application?

Well, certainly in protective packaging, certainly we're looking at our mailer business and debottlenecking, some of our equipment on our mailer side. So again, going into ecommerce on the mailer side.

On the equipment manufacturing side on the dispensing equipment, we're debottlenecking that process as well to increase capacity. And then, within our tape area, specifically on our coaters that's where we're doing a fair amount of dedottlenecking, as well.

And that that has to do with our facility in Menasha, Wisconsin.

Thanks very much. Last one for me.

And I do appreciate the color on gross margins so far the different puts and takes, any accounting treatment in the potential headwind there. Looking specifically an inch spread piece, though.

Can you hold on to that up tick for the long-term? Because I know that previously you've mentioned that some customers have very good visibility onto that spread and they push back.

Yes, so listen, I think commented on that. I can only speak to what we see right now.

And we feel good about managing that spread right now and where we are. And we see that going forward, just as our guidance indicates into Q4, hard to predict on a longer scale perspective.

But again, just boiling back to or going back to kind of our strategy around our assets. And going back to our operational improvements that we've made in our facilities, certainly we don't plan on giving those up on a go forward basis.

And that at the end of the day helps your spread because in many cases, your waist numbers are lower, your productivities up and you can pick up some spread between sell price and raw materials.

Hi, guys. Not doing great on the phone today.

But just following up, Greg to your answer to my question at the beginning, I think, in response to the restarting trend, you had indicated that sales have continued to increase, especially since the lockdown. And into Q4, this year we got [Technical Difficulty] that was in Q3 last year.

And overall, we should presumably expect ecommerce to strengthen in Q4. So it feels like there's a pretty good chance that sales improve sequentially.

I just like to ask, are there offsets that we should consider in terms of Q4?

From a demand perspective?

Correct.

I do not see them. Look, I see -- when I think of -- I think of where we were from a trough demand perspective that pretty much hit April, May, as everyone knows.

And we saw a pretty sequential, like, even performance, June, July and then August, September up, and that's continued. So, when you think of kind of where we were trough to peak, we kind of peaked on a consistent basis.

August, September, October.

Perfect. Okay.

And then, going back to previous answer, if I heard you correctly, you indicated that the EBITDA margin or the improvement was essentially structural. So your Q3 margin was 20% and at the low end of your Q4 guidance implies about an 18%.

margin, is that the range we should expect going forward?

Well, like I said, I think the 20% like I said, was somewhat high, just because of some of the accounting treatment of the costs going through Q2. But certainly, when we think of the 18%, at this point, we don't see a reason why that can't be maintained, of course, there's a lot of uncertainty in the market and what's going to happen for next year.

But at this point, based on the cost, the cost measures that we've taken, based on how our plants are performing, based on the leverage that we're getting from filling up some of the investments that we've made, and based on the demand that we have, we don't see that going down.

Got you. Okay.

In the last quarter, capital deployment discussions were focused on debt repayment, it looks like with these results, your Q4 and I guess, going forward, free cash flow improves. And your leverage ratios are reduced quite substantially.

Where do we seek outlet deployment beyond organic growth and dividend at this point?

So, as we stated, right now, as we sit here today, we're focused on debt repayment, certainly, as we move into 2021, certainly, as I've stated before, we're still interested specifically around bolt-on acquisitions, specifically things that can add products to our platform, if you will, with ecommerce and leverage our platform in ecommerce. So certainly, that could be an area of deployment.

But at the end of the day, right now, as we sit here, our focus is on that debt repayment and getting to within that normalized range of 2x to 2.5x leverage.

Just wanted to ask whether you had any guidance on Q4 working capital inflow or outflow, as part of that 35 million to 45 million free cash flow.

Yes. We don't give specific guidance.

But normally in Q4, we do see a nice unraveling of our working capital. So what we did say is, when you compare to last year, we should see something similar to what we saw last year, minus the CapEx because obviously, the CapEx is back loaded this year, as well as the cash taxes will be somewhat elevated this quarter versus last year.

So if you take those things out, we should be somewhat similar to last year and that will give you an idea, if you look at last year's working capital movement, what we might see.

Thank you. If there no other further questions, let me thank you for participating in today's call.

We look forward to speaking with you again following the release of our fourth quarter 2020 results in March of 2021. In the meantime, I hope you and your family stay safe and healthy.

Thank you very much.