Transcontinental (TCL-A) Q3 2025 earnings summary

Executive summary

• Q3 2025 revenues were $684.4 million, down 2.2% year-over-year, mainly due to the sale of industrial packaging and lower Packaging volumes, but adjusted EPS rose 16.7% to $0.70, driven by cost discipline and strong book printing.

• Retail Services and Printing delivered 4.5% revenue growth and higher profitability, supported by book printing and favorable FX.

• Packaging sector revenue declined 6.3% but adjusted EBITDA and margins improved through cost management and organic profit growth.

• Recent acquisitions (Middleton Group, Mirazed & Intergraphics) expand product portfolio and Canadian reach, adding up to $60 million in annual revenue.

• AI investment in flyer content automation aims to boost efficiency and customer offering.

Financial highlights

• Adjusted EBITDA increased to $122.6 million, up $1.6 million year-over-year, with $4.2 million in organic profit growth.

• Adjusted EPS rose 16.7% to $0.70 from $0.60 in Q3 last year, driven by higher EBITDA, lower financial expenses, and a reduced share count.

• Net financial expenses fell by $4.6 million to $11.0 million; income taxes dropped to $7.6 million.

• Cash flows from operating activities in Q3 2025 were $77.8 million; CapEx was $29.6 million, on track for a $120 million annual target.

• Net debt ratio improved to 1.68x from 1.91x a year earlier, with over $110 million in net debt reduction since Q3 FY2024.

Outlook and guidance

• Organic profit growth in adjusted EBITDA expected for both Packaging and Retail Services & Printing in fiscal 2025.

• Packaging sector anticipated to finish the year strong with organic adjusted EBITDA growth.

• Upgraded outlook for Retail Services and Printing, confident in adjusted EBITDA growth for fiscal 2025.

• Continued strong cash flow from operations is anticipated, supporting debt reduction, growth investments, and shareholder returns.

• Outlook excludes potential impacts from tariffs, protectionist trade measures, and Canada Post labor conflict.