Transcontinental (TCL-A) Q4 2024 earnings summary

Executive summary

• Achieved solid Q4 and fiscal 2024 results, with adjusted EBITDA for the year up 5.1% to $469.4 million, driven by 14.2% growth in Packaging and 2.1% in Retail Services & Printing.

• Cost reduction initiatives significantly contributed to a 15.3% increase in adjusted EPS and improved profitability across core sectors.

• Net debt ratio improved to 1.71x, reflecting strong cash flow and debt reduction.

• Sale of industrial packaging operations completed post-year-end for up to $132 million, focusing on core growth areas.

• Sustainability progress included SBTi approval of near-term emission targets and a 9% reduction in workplace accidents.

Financial highlights

• Fiscal 2024 revenues were $2,812.9 million, down 4.3% year-over-year; Q4 revenue was $749.3 million, down 3.9%.

• Q4 consolidated adjusted EBITDA reached $142.2 million; full-year adjusted EBITDA grew 5.1% to $469.4 million.

• Adjusted EPS for Q4 was $0.79 (vs. $0.83 last year); full-year adjusted EPS rose 15.3% to $2.34.

• Net earnings attributable to shareholders increased 41.4% year-over-year to $121.3 million; Q4 up 14.9% to $47.9 million.

• Operating cash flow in Q4 was $185 million; full-year CapEx was $121.5 million, down $56 million.

Outlook and guidance

• Packaging Sector expects organic adjusted EBITDA growth in 2025, with volume growth offset by pricing pressures; medical market stabilizing.

• Retail Services & Printing Sector anticipates stable adjusted EBITDA in 2025, with labor conflict impact dependent on strike duration.

• Estimated $7 million profit impact from Canada Post strike to date, with ongoing weekly EBITDA impact of over $1 million.

• CapEx guidance for 2025 is about $120 million; cash taxes expected at $75 million.

• Continued strong cash flow generation expected, supporting debt reduction, strategic investments, and shareholder returns.