Good morning, and welcome to the CCL Industries second quarter investor update call. Please note that there will be a question and answer session after the call. The moderator for today is Mr. Jeff Martin, President and Chief Executive Officer, and joining him is Mr. Sean Washchuk, Senior Vice President and Chief Financial Officer. Please go ahead, gentlemen. Good morning, everybody, and welcome to the second quarter call. I'm gonna hand the call over to Sean Washchuk. Thanks, Jeff. I'll draw everyone's attention to slide number 2, our disclaimer regarding forward-looking information. I'll remind everyone that our business faces known and unknown risks and opportunities. For further details of these key risks, please take a look at our 2023 annual report, particularly the section Risks and Opportunities. Our annual and quarterly reports can be found online at the company's website, cclind.com, or on SEDARplus.ca. Moving to slide 3, our summary of financial information. For the second quarter of 2024, sales increased 12.2%, with 8.5% organic growth, 3% acquisition-related growth, and 0.7% positive impact from foreign currency translation, resulting in sales of CAD 1.85 billion, compared to CAD 1.64 billion in the second quarter of 2023. Operating income was CAD 303.5 million for the 2024 second quarter, compared to CAD 242 million for the second quarter of 2023, a 25% increase, excluding the impact of foreign currency translation. Jeff will expand on our segmented operating results for our CCL, Avery, Checkpoint, and Innovia segments momentarily. Corporate expenses were up for the quarter due to higher discretionary expenses and short-term variable compensation versus the prior year quarter. Consolidated EBITDA for the 2024 second quarter, excluding the impact of foreign currency translation, increased 21% compared to the same period in 2023. Net finance expense was CAD 18.6 million for the second quarter of 2024, compared to CAD 19.2 million in the 2023 second quarter, primarily due to an increase in interest rates on the company's cash balances, partially offset by quarterly interest expense. The overall effective tax rate was 18.8% for the 2024 second quarter, compared to an effective tax rate of 24% recorded in the second quarter of 2023. The decline in the effective tax rate is due to the non-cash, non-taxable CAD 78.1 million in valuation gain we recorded on the legacy 50% interest in the Pacman joint venture acquisition. Excluding the gain, the effective tax rate was 24.5%, comparable to the 2023 second quarter. The effective tax rate may change in future periods, depending on the proportion of taxable income earned in different tax years. Net earnings for the 2024 second quarter were CAD 279.5 million, compared to CAD 155.9 million for the 2023 second quarter, albeit these net earnings included the CAD 78.1 million revaluation gain. For the six-month period, sales, operating income, and net income increased 8%, 17%, and 47%, respectively, compared to the same six-month period in 2023. 2024 included results from 9 acquisitions completed since January 1, 2023, delivering acquisition-related sales growth for the period of 3%. Organic growth was 5.3%, and foreign currency translation was a tailwind of 0.4% to sales. Moving to the next slide, earnings per share. Basic earnings per Class B Share were CAD 1.56 for the 2024 second quarter, compared to CAD 0.88 for the 2023 second quarter. Adjusted for CAD 0.01 of restructuring and other expenses and CAD 0.44 for non-cash revaluation gain, adjusted earnings per Class B Share were CAD 1.13, a record, an improvement of 25.6% compared to CAD 0.90 for the second quarter of 2024. The change in adjusted basic earnings per share of CAD 0.23 is principally attributable to improvements in operating income, accounting for CAD 0.24, partly offset by an increase in corporate costs of CAD 0.01. Moving to the next slide. Free cash flow from operations. For the second quarter of 2024, free cash flow from operations was an inflow of CAD 118.8 million, almost equal to CAD 120.1 million posted in the 2023 second quarter. For the trailing twelve months ended June 30, 2024, free cash flow from operations was CAD 567.8 million, compared to CAD 523.8 million for the comparable period of 2023. This change is primarily attributable to an increase in net capital expenditures, offset by an increase in cash provided by operating activities, which was generated by improved adjusted earnings. Next slide. Net debt as at June 30, 2024, was CAD 1.76 billion, an increase of CAD 252 million compared to December 31, 2023. The increase is principally a result of funds used for capital expenditures, business acquisitions, and our share buyback. The total share buyback for the second quarter of 2024 was 565,620 shares for CAD 40.6 million. Although the company's debt increased, the balance sheet closed the quarter in a strong position. Our balance sheet leverage ratio was approximately 1.23 times, up from 1.13 times, reported at the end of December 31, 2023. Liquidity was robust, with $666 million of cash on hand and $907 million of available undrawn credit capacity on the company's revolving bank credit facility. The company's overall finance rate was 2.8% at June 30th, 2024, same as December 31st, 2023. The company's balance sheet continues to be well positioned as we move through fiscal 2024. Jeff, over to you. Thank you, Sean, and good afternoon or good morning, everybody. Good afternoon, because I'm calling into the call today from France. On slide seven, highlights of our capital spending for the quarter and the year so far. CAD 304 million, a little bit front loaded this year, but we expect the year to come out in the CAD 450 million range. Moving on to slide eight, a few highlights of things we've been investing in recently. We exited our partner in our Middle East JV, as Sean mentioned earlier on in the call. Highly successful venture over the last 12 years. Sales up 2.5 times, earnings up 4 times. Very important region for many of our customers. In China, we completed an investment in solvent adhesive and top coating with special films, bringing key material science capability to CCL Design. I'll ask, I'll answer questions on that during the Q&A. And in Montreal, we bought a second building up there to significantly expand our Canadian healthcare operations. Slide 9 highlights the CCL, the CCL segment. Very strong quarter, 9% organic growth, but compared to a 3% decline in the prior year period. Good single-digit growth in North America and Europe, double-digit in Asia Pacific, and Latin America. Improved profitability in all end markets, most notably at CCL Design, food and beverage, and home and personal care. Moving on to Slide 10, numbers for our joint venture. This now excludes one month in the second quarter of the Pacman-CCL joint venture. That's why the numbers look slightly squiffy, but results continue to be strong for the year-to-date numbers. Moving on to Slide 11, results for Avery. We had an early start to the back-to-school season that helped in the organizational products category, and our direct-to-consumer badges and cards also drove performance in North America. We had very solid progress in Europe and Latin America. Australia was a little bit soft, and horticultural markets continued to improve in the US and in Europe. Slide 12, highlights for Checkpoint. Very strong quarter, very strong growth. Most of the growth came in the Apparel Labeling Solutions business, which is up 40%, aided by RFID wins and retailers rebuilding inventories. And that drove a significant profit improvement, too, but the MAS business was also very solid. Slide 13, highlights for Innovia. Our sales growth this quarter was entirely driven by the label materials industry recovery, especially in Europe. But we did have the operational transition from Belgium to the UK and Australia. It went very smoothly, but we did reduce production temporarily, pending customer qualification. That's now all complete, and the Belgian operation is pretty much closed. EcoFloat is now profitable in Poland, and our sales there continue to build. Some comments on the outlook. Our CCL comps will harden in Q4 for HPC, and food and beverage, but they ease a little bit in the second half overall for healthcare. We do expect CCL Design recovery to remain strong. CCL Secure will slow in Q3, but we hope will improve a little bit in Q4. Steady Avery progress, Checkpoint RFID growth is expected to continue, and of course, we'll have the benefit in the second half of the operational savings from the Innovia transition. Foreign exchange, which will, as it was in the current quarter, be benign for the second half of the year. So with that, operator, we'd like to open the call for questions. Certainly. At this time, we will be conducting a question-and-answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment, please, while we poll for questions. Your first question for today is coming from Walter Spracklin with RBC Capital Markets. Hey, good morning. It's Luke Jull on for Walter. So on Checkpoint- Good morning. Morning. On Checkpoint, you noted the solid organic growth trends in ALS from RFID and retailers for ordering. So does that continue in the back half, or have we kind of seen a peak here in terms of managing supply chain disruption? Not sure yet. We'll have to wait and see how the current quarter unfolds. It was strong again in the month of July... I can tell you that, but we'll have to wait and see. It's not, not transparent to us how much the forward ordering impact might be from the Red Sea impact, but we know there is some. Exactly how much is hard to quantify. Okay, that's fair. And then switching to Avery, you know, solid profitability growth this quarter. You know, given the back-to-school season was a bit earlier this year, do you expect a large sequential decline in margin in Q3, kind of similar to what we saw in 2022, and then kind of move to a more normalized margin in Q4? Hard to say, 'cause back-to-school is always very uncertain when the replenishment orders come in. Yeah, we had a good July, I can tell you that. And, we'll have to see what August and September brings. Okay, thanks. I'll turn the line over. Thank you. Your next question is from Hamir Patel with CIBC. Hi, good morning. Jeff, the CCL segment organic growth of 9% looked very strong, even when you factor in, you know, I think that the year ago was off 3%. Do you think you could sustain that high singles organic growth for the CCL segment in Q3? I know you pointed to steady sequential demand, because the year-over-year comps for Q3 look pretty similar as Q2. Well, the July was... The cadence for Q2, we had a very strong April, and we had a quite strong May, and then June was somewhat in between. What I can tell you is July started, like Q2, did very strong. We'll have to wait and see what August and September bring. It's whether we're in an uncertain world, and it's hard to comment beyond that. But, I'd be surprised if we didn't have solid organic growth. But whether it's 3, 5, 7, 8, very hard to say at this juncture. Fair enough. Jeff, in the Checkpoint business, the 40% growth in ALS, how much of that was RFID? Most of it. Most of it. And Jeff, are you able to clarify what your total RFID linked sales are currently, how they kind of grew in the quarter? Because I know you've got pieces- We can't get into that kind of color on the quarter. I'm sorry. Okay, and maybe just- It's strong. 40% is strong, but it's on a relatively low base, so I think you have to keep that in mind. You know, we're not even on a billion-dollar business or anything like that, so it's total company RFID sales are in. I think we've said publicly, but we're in the $200 million zone. So that gives you a frame of reference. Okay, fair enough. And, and Jeff, with the new capacity, how much additional runway does that, does that give you to, to fill out? Well, we're the industry's growing pretty rapidly. I think it's growing in the 15%-20% zone. So we're adding capacity that will allow us to at least grow at that pace, maybe take a bit of share here and there. So that's currently our plan. So we currently have capacity in place to make or in place or about to be in place to make 5 billion inlays, and we expect to expand on that again in the year of 2025. Okay, fair enough. Thanks, that's all I had. I'll turn it over. Okay. Thank you. Your next question for today is from Ahmed Abdullah with National Bank of Canada. Yeah, sorry. Thanks for taking my question, and congrats on a solid quarter. Looking at the CCL segment results, how much of the better margin was driven by mix? And is there perhaps any one-time orders such as those seen in, CCL Secure that we've seen in the past, bumping up margins? No, I wouldn't say there was any unusual orders in that regard. I think the volume was strong, so that's probably the main driver. I wouldn't say there's anything particularly unusual in the mix. So I think it's more a function of the strong volume. Okay, that's great. And, in the outlook of last quarter, automotive was, like, expected to face some pressure in Q2. The general auto segment is facing that pressure, but from these results, it seems that you're doing a bit better than the general auto industry. Is that a fair assessment? And is there any- Well, we're a very small player in the automotive industry. Our automotive business is barely $300 million, so you have to keep that in context. So I don't think we can be compared with parts suppliers of scale in the auto industry. So if we get an order for something new and unique, that can bump up our organic growth, and the reverse also applies. The business is only modestly up there in the second quarter. Okay. Is there any inventory concerns that you have in terms of the inventory levels at customers for any build-ups? In automotive? Yeah. No. Okay. On the China plant that you called out, was that something that got completed in the quarter? Right. Did it contribute anything into the quarter or? No, no, no, no, nothing in the quarter. And it'd be very nominal in the second half of the year. It will be installed, I'd say, it'll be 2025 when it will start to contribute. Okay. Okay, I'll pass the line. Thank you very much. No problem. The next question is from Michael Glen with Raymond James. Hey, good morning. Hey, Michael. ... Jeff, can you talk about the impact of the Pacman integration on your business, like top line and EBITDA? Are you able to give any information on how that plays out? Well, it was only three weeks, barely three and a half weeks in the quarter, so I don't think we should really talk about it relative to this quarter. And I think if you read the press release, it's fully disclosed the results of the operation, and you can do the math yourself. Okay. And just, can you characterize market share in labels? When you look across CPG companies and some peer results, it looks like you're gaining market share. Are you able to give an assessment on that? I wouldn't say that's necessarily likely. I think we may have picked up a bit here and there, probably lost a bit here and there, too. But we don't really worry too much about what our competitors are doing and our share position. We focus more on our customers and how well they're doing and how well we're doing. That's how we run the business. But I wouldn't have said there was any material gains or losses in the numbers. Yeah, you have to bear in mind the CPG is now focused on volume increases, so more than they are price and mix. So that tends to drive more label volume than typically when you're promoting and doing new things to packages, that tends to drive some label volume. Okay. Just circling in on China, Jeff, can you just remind us of the rough size of your China business now, the segments and how the customer base lines up? Well, CCL Design is the biggest business in China. And then we make all of our, the vast majority of our Checkpoint products are made in China, a very, very significant portion of it. But those sales are recorded, a lot of them are recorded outside of China. And then you've got CCL Labels. So I think our direct sales builds to customers in China are of the order of CAD 600 million or thereabout. If you think about it in terms of the value of what we produce there and ultimately sell all over the world, it's a much bigger number than that. Okay. Okay, thanks for the questions. No problem. Your next question is from Jonathan Goldman with Scotiabank. Hi, good morning, and thanks for taking my questions. Jeff, some of the commentary from the large CPG companies is around consumers trading down to private label or non-branded products. Would you see any impact from that trend on your label business? Could it possibly be a headwind? I would say limited. You know, we tend to, we tend to be focused more on premium price brands. So they may be losing some share. Not for me to say whether that's true or not. That's up to the CPGs to, to have their own views about that. I think maybe some are, some aren't. I think there's some parts of the CPG business which are notably soft. The spirits industry is one we would call out as being notably soft, which has a lot of high-end brands and positions in it. But I, I wouldn't say that the impact of, in, but also this, in any prior slowdowns, has ever been particularly noticed relative to the switch from premium brands to private label. The category we're in, in general, great scale. Well, thanks for that. And then maybe switching to the RFID business. You said most of the growth, the organic growth in ALS, the 40% was the RFID. I think the market's growing somewhere more around 18%, so that doesn't fly, you're gaining share. I guess 2 questions. Well, you have to- Why ... Just sorry to interrupt you, but you need to keep in- Yep ... in context with the size of our business. You know, we're a small player in this space, so when you're small, you know, one customer can make your share, make it look like you're gaining a lot of share when you gain one customer. So when your sales are in the zone of CAD 50-60 million a quarter versus CAD 300 or 400 million a quarter, the numbers are very different. So I just think about that as you're pondering our 40% number. No, that's fair. And then I guess maybe a corollary to that is, as competitive intensity does increase and people do bring on capacity, could you see pressure to ASPs? Well, it's been a curve where adoption has followed lower cost over time as the industry has grown. That's typical for the kinds of products we make in our industry. As volume grows, costs go down, prices go down. I wouldn't say there's anything more or less different about that in RFID to other businesses we're in. Okay, fair enough. Thanks for the time. Thanks. Your next question is from Sean Steuart with TD Cowen. Thanks. Good morning, everyone. A couple questions. I wanted to follow up on the nine percent organic growth in the CCL segment. Can you hear me? Yes, I can hear you fine. Sorry. Okay. You referenced double-digit sales growth in Asia Pacific and Latin America in CCL. With broader slowdown indications in China, can you speak to how that factors into the sustainability of that growth rate in Asia Pacific going forward? Well, it's really a function of the recovery of our CCL Design business, which is largely produced in China. So it's a recovery of demand in the computer industry, in the device industry that's compared to trough last year. So that's what that's about. And in Latin America, I would say Latin America, for most of the CPG companies, is the strongest region in the world, and that's what we see, too. Great. Thanks for that context. ... Second question, just general M&A environment. You, you closed the, the acquisition of the, the JV buyout. Broader thoughts on if M&A environment has changed at all with rates moving, as they have, has the opportunity set widened at all, or should we still be thinking of just bolt-on acquisitions as the, the likely approach? No, no, no change. No change. Okay. And then, and lastly, on the buyback, your prior commentary was, as net debt to EBITDA gets down towards 1x, you'd be an indiscriminate buyer of the stock. You were active or started to get active in, in the second quarter. Same narrative for, for that capital allocation piece as well? Correct. Okay. That's all I had. Thanks very much, guys. No problem. Thank you. Your next question is from Stephen MacLeod with BMO Capital Markets. Thank you. Good, good morning, guys. Good afternoon, Jeff. Good day. Just a couple of follow-up questions. Just on the Avery outlook, you talked about steady progress. There's lots of moving parts within that segment, so just wondering if you can parse out sort of how those components are moving around within Avery? Well, not more than I have done in the commentary really, Steve. It's very difficult to forecast how back to school will actually end up, and we're still in the middle of it. It's a very short season. It's very volatile. So I don't, I don't want to get into any commentary about that. We have seen the recovery in the horticultural space, which we've commented about in some, in some... But, but I think getting into anything more specific than the comments we've made would be a bit difficult for us to do. Okay, no problem. That makes sense. And then just sticking on Avery, you know, you've had a couple of quarters in a row with very strong above 20% margin growth. Is there anything seasonal in that versus H1 versus H2, or is, you know, 20%, you know, now a new, a new good quarterly run rate for that business? Well, the seasonality that's changed is Q1, which used to be a slow quarter when horticultural is normal, that's the horticultural high season, so that tends to boost profitability in both the fourth quarter and the first quarter prior to us owning that business. So that's a seasonal impact. And I think some of the acquisitions are performing pretty well, so that's also a factor. But yeah, the business is doing pretty good. Okay. That's, that's great. And then just, just finally, with respect to the CCL segment outlook, you know, you talked about comps hardening in Q4. But I'm just wondering if you have any commentary around the comps for the CCL kind of core label business in Q3? Well, we'd expect to have positive growth in Q3 given what's happened recently. And the comps, you know, are easy again in Q3 as they were in Q2. So that's also a factor in the words we've used here. That changes in Q4. So in Q4, we had positive growth last year, so we'll be comparing a positive to positive in Q4 rather than positive to negative in Q2 and Q3. And the recovery of CCL Design is a factor, so that's, that was weak for the lion's share of last year. It did improve a bit in Q4 last year, but not very much. So the recovery we're seeing in the CCL Design space is a factor. So that's, that's what I can say. Okay. That's, that's helpful. Thanks, Jeff. Thanks, Sean. Appreciate it. No problem. Your next question for today is from Daryl Young with Stifel. Hey, good morning, guys. With regards to the CCL segment, can you just remind me of the kind of flow-through timing around the CPG orders? And, I guess the context being promotional activity looks like it's starting to ramp up, so those volume trends that we would start to see in the back half of the year from CPG, volume, pricing activity. Are you seeing that in this quarter, or is that still yet to come? Well, it's very tactical, so it depends who's promoting and who gets which brands and which customers are promoting more than other customers. So we're very dependent on what happens with which customers and brands within each customers, whether we're involved or not. But I don't want to get into trying to predict what may happen in the second half of the year. I think that would be a bit foolish. I think we would expect to see good, solid gains in Q3. It will definitely get more difficult when we get into Q4. Okay. And then with regards to CCL Secure, are you able to quantify how much of a contribution to the organic growth that was in this quarter? No. No. Okay, perfect. That's it for me. Thank you. No problem. Your next question is from David McFadgen with Cormark. Oh, hi. Yeah, a couple questions. So when I look at the organic growth, it seems to me that maybe you've pulled forward some revenue from Q3 into Q2. I was just wondering if that was the case, and if so, can you quantify it? ... I don't think so, no. I think it's much more about the ease of the comps more than it's about any pull forward. If the only business where there would be any pull forward would have been in the ALS business at Checkpoint, and that's really around the Red Sea phenomena. We know that's a factor affecting supply chain to garments and into... from suppliers in North Africa and the Asian subcontinent into Europe. So we know that's a factor with the traffic going in there that may have inflated orders somewhat. It's hard to quantify that, but that's the only business where I would say there was anything that would resemble forward ordering. Okay. So you stated, for Checkpoint, that in terms of your RFID business, you had some new client wins. Do you know if you took that from a competitor, or that's just new people adopting RFID? Both. Both. Okay. I guess, I guess you probably couldn't quantify what you actually took from whom? Or from competitors. No. No. No. No. Oh, okay. Well, we can- All right. Okay, that's it. We're not going to disclose here. Right. Okay. All right, thanks. No problem. Once again, if you would like to ask a question, please press star one. We have reached the end of the question and answer session, and I will now turn the call over to Geoffrey Martin for closing remarks. Okay. Well, thank you for calling in, everybody. Thank you for your interest in the company. It's great to have a good call too, and we look forward to talking to you in November when we announce our Q3 results. Thanks, thanks for your time today. Goodbye. This concludes today's conference, and you may disconnect your lines at this time. 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