Good morning, ladies and gentlemen. Thank you for standing by. Welcome to KP Tissue Fourth Quarter 2022 Results Conference Call. At this time, all participants are in a listen only mode. Following the presentation, we will conduct a question and answer session. Instructions will be provided at that time for you to queue up for questions. If anyone has any difficulties hearing the conference, please press star zero for operator assistance at any time. Before turning the meeting over to management, I would like to remind everyone that this conference call is being recorded on Thursday, March 9, 2023. I will now turn the conference over to Mike Baldesarra, Director, Investor Relations. Please go ahead. Thank you, operator. Good morning, ladies and gentlemen. My name is Mike Baldesarra. I'm the Director of Investor Relations for KP Tissue Inc. The purpose of this conference call is to review the financial results for the fourth quarter for 2022 for Kruger Products. With me this morning is Dino Bianco, Chief Executive Officer of KP Tissue and Kruger Products L.P., and Mark Holbrook, Chief Financial Officer of KP Tissue and Kruger Products. The following discussions in responses to questions contain forward-looking statements concerning the company's activities. Forward-looking statements involve known and unknown risks and uncertainties, which could cause the company's actual results to differ materially from those in the forward-looking statements. Investors are cautioned not to rely on these forward-looking statements. The company does not undertake to update these forward-looking statements except if required by applicable laws. There's a page at the beginning of the written presentation which contains the usual legal cautions, including as to forward-looking information, which you should be aware of. I'd like to point out that all figures expressed in today's call are gonna be in Canadian dollars unless otherwise stated. The press release reporting our Q4 2022 results were published this morning and will be accessible from our website at kptissueinc.com. Please be aware that our MD&A will be posted on the website and will also be available on SEDAR. Finally, I would ask that during the call you refer to the presentation we prepared to accompany these discussions, which is also available on our website. We'd also appreciate during the Q&A period that you limit your questions to two. Thank you for your collaboration. Ladies and gentlemen, I'll now hand the call over to Dino Bianco, our CEO. Thank you Mike good morning everyone and thank you for joining us for our fourth quarter and full year 2022 earnings call. We are highly encouraged by the ongoing recovery of our financial results in 2022 despite uncertain market conditions and persistent inflationary pressure. The actions we undertook earlier in the year on pricing, cost management, and our Memphis operations turnaround are driving improved financial performance. We took these actions while continuing to invest in the business long term. Looking ahead to 2023, we intend to deliver continued top line growth and improved profitability while keeping a close watch on input costs and a fluctuating Canadian dollar. Now, let's take a look at our quarterly numbers on slide five. Our revenue growth of 8% in the fourth quarter of 2022 can mainly be attributed to selling price increases across the board and a favorable foreign exchange impact on our U.S. dollar sales. These factors were partially offset by lower sales volume in our consumer segment as some shoppers traded down on purchases due to the higher market pricing. Canadian revenues increased by 7% in the fourth quarter, while the U.S. improved by 9.5%. Adjusted EBITDA was up 15.8% year-over-year to CAD 44.4 million, primarily due to higher selling prices and lower SG&A expenses. These factors were partially offset by inflationary pressure on pulp, manufacturing costs and freight, lower sales volume and unfavorable foreign exchange impact. Turning to full year financial results on slide six. Revenue of CAD 1.7 billion improved 15% year-over-year while Adjusted EBITDA of CAD 116 million was lower than 2021, driven by high inflation and our Memphis operational issues, partially offset by pricing, volume and cost cutting. I am also pleased with the performance of our AFH business, our away from home business, in 2022, which was driven by pricing, strong volume, and operational efficiencies. AFH revenue increased 40% year-over-year on the strength of pricing actions, a portfolio approach to targeting higher margin segments, and aggressive expansion in the U.S. As a result, AFH Adjusted EBITDA finished in positive territory at CAD 7.4 million in 2022. Through these actions, our AFH business is moving to a sustainable profit model and I'll speak more about that in a few pages. On slide seven pulp average prices in CAD increased 1% in the fourth quarter of 2022 from the previous quarter, while year-over-year prices rose significantly. Both NBSK and BEK average prices climbed 26% and 37% in Q4 2022. Based on industry forecast for 2023, pulp prices and the Canadian dollar will continue to remain volatile. Pricing management and cost management will be critical in 2023 as well. Turning to slide eight, our pulp or our fiber cost as a whole accelerated in the fourth quarter of 2022, while growth for other input costs continued to grow but at a slower pace. Fiber remained elevated with an 18%-27% increase in USD in the fourth quarter compared to the same period in 2021. Freight and packaging costs rose 10% and 8% year-over-year, while natural gas prices were up 25%. Finally, our labor expenses increased approximately 4% in the fourth quarter. All combined, we estimate that inflationary pressure raised our cost base by an additional CAD 40 million in the fourth quarter and CAD 180 million for the year. To counter this inflationary pressure, we implemented pricing actions and cost management initiatives in 2022 that we previously communicated as shown on slide nine. Altogether, the prices for our products increased on average by 14% in Q4 2022 compared to the same period last year. Moving on to our network modernization slide on page 10. Production capacity at TAD Sherbrooke continues to exceed ramp-up plans. We continue to invest and roll out our artificial intelligence with the implementation of data historian software and visualization tools at the site to maximize reliability and uptime. Our digital twin tools have also been expanded to include our TAD paper machine. In terms of our Sherbrooke expansion project, we anticipate it will become a key long-term catalyst with two new lines starting up in 2023, the bath line in Q1 and the facial line in Q4. Turning to slide 11. We enhanced operating efficiency at our Memphis plant in early January 2023 by permanently shutting down older assets, including a paper machine and 6 converting lines. Although this was a difficult decision, we closed these assets because we saw no clear path to profitability in this highly competitive segment. I wish to thank the employees and leadership at Memphis for undertaking this difficult decision with professionalism and compassion. The impact on our U.S. customers will be negligible as we refocus production capacity on our TAD and facial tissue products. Improved operating efficiency from this shutdown will lead to a more efficient and profitable Memphis plant that will become a very competitive operation for us long term. Meanwhile, the facial tissue line rolled out last July continues to exceed expectation. New operators have been hired. The equipment is at base operating condition. As a result we anticipate continued growth from this asset, which will allow us to grow our business in the facial category. Now, let's pivot to brand support on slide 12. Despite high inflation we continue to invest to support our brands. We obtained strong results from our Kruger Big Assist program in the fourth quarter to drive in-store sales and mitigate price increases. If you recall, this marketing initiative was implemented with a shopping assist incentive to drive sales. When consumers spent CAD 25 on participating tissue products, they received a CAD 10 gift card. We also continued to develop awareness and trial-building activities behind our new innovations Cashmere and Purex UltraLuxe, SpongeTowels UltraPRO, Bonterra, and White Cloud brands. Given an inflationary environment, it's critical that we continue to support our brands. Of note, our 19th annual Cashmere Collection returned to a live audience with significantly increased participation. Clothing was fashioned entirely with our new and improved Cashmere UltraLuxe bathroom tissue. That product is produced at our Sherbrooke facility. Moving to slide 13, the data presented is taken from Nielsen. It shows market share performance over a 52-week period ended December 31, 2022. The data reflects that branded share, particularly bathroom tissue and paper towels, have been affected by industry-wide price increases when some consumers are trading down. This usually occurs during high inflationary periods, these shares tend to normalize once pricing stabilizes. In the meantime, Kruger Products maintains a leadership position in the bathroom and facial tissue markets, we are well entrenched in a number two position on paper towels. We will continue our efforts to support our brands and rebuild our share over time. Looking at Away From Home on slide 14, this segment delivered a third consecutive quarter of Adjusted EBITDA growth in Q4 2022 based on increased sales volume and selling price increases. Volume in Q4 was up 4% year-over-year as the market recovered in Canada and the U.S. AFH pricing actions have been implemented to offset costs. As mentioned earlier our AFH business is moving towards a sustainable profit model. We are watching Q1 carefully as we continue to monitor the impact of slow economy and normal seasonal softness in Q1 2023. I will now turn the call over to Mark. Mark? Thank you Dino and good morning everyone. Please turn to slide 15 for a summary of our financial performance in Q4 2022. As Dino mentioned earlier, we delivered strong revenue and Adjusted EBITDA growth in the fourth quarter as price increases and cost management initiatives increasingly gained traction. Net income totaled CAD 16 million in Q4 2022, compared to CAD 42.3 million for the same period last year. The decrease was mainly due to the comparison against a significant income tax recovery in Q4 2021, along with higher depreciation and restructuring expenses. These factors were partially offset by the higher Adjusted EBITDA, a greater change in the amortized cost of the partnership units liability, a higher foreign exchange gain, as well as reduced interest expense. In the quarterly segmented view on slide 16, consumer revenue increased 4.1% year-over-year and 9.5% sequentially to CAD 378.8 million in the fourth quarter of 2022. In the away from home segment, revenue grew 31.9% year-over-year to CAD 79.3 million, but decreased 2.1% sequentially. Consumer Adjusted EBITDA totaled CAD 42.7 million in Q4, compared to CAD 43.7 million in Q4 2021, with an Adjusted EBITDA margin of 11.3% versus 12% for the same respective period. Sequentially, consumer Adjusted EBITDA was up by CAD 17.7 million from CAD 25 million in Q3. For the away from home segment, Adjusted EBITDA amounted to CAD 5.7 million in Q4, compared to negative CAD 1.7 million in Q4 2021, with an improved margin of 7.2%. Sequentially, AFH Adjusted EBITDA was up CAD 0.3 million from CAD 5.4 million in Q3. On slide 17, we review year-over-year revenue growth for Q4, which improved by CAD 34 million or 8%. This growth can be attributed to selling price increases across all segments and regions, as well as a positive foreign exchange impact on US dollar sales. These factors were partially offset by lower sales volume in the consumer segment and unfavorable sales mix. On a geographical basis, revenues in Canada rose CAD 17.2 million or 7% year-over-year, while U.S. revenues grew by CAD 16.9 million or 9.5%. On slide 18, we provide additional insight into profitability in the fourth quarter. Adjusted EBITDA increased CAD 6.1 million to CAD 44.4 million, representing a margin of 9.7% from CAD 38.3 million in Q4 2021, or a margin of 9%. The increase in Adjusted EBITDA was primarily due to higher selling prices combined with lower SG&A expenses. These items were partially offset by significant inflation on pulp manufacturing costs and freight, lower sales volume, and also unfavorable impact of foreign exchange fluctuations. Let's turn to slide 19, where we compare revenue sequentially from Q4 to Q3. Revenue increased by CAD 31.1 million or 7.3% from the previous quarter. Revenue growth was primarily driven by price increases in consumer Canada and the U.S., and improved volume for the consumer segment across both regions, mostly offset by seasonally lower volume in the away from home segment. A positive foreign exchange gain on US dollar sales contributed to sequential revenue growth. Geographically, revenue in Canada was up by CAD 12.5 million or 5% sequentially, while revenue in the U.S. improved CAD 18.6 million or 10.5%. On slide 20, Adjusted EBITDA in Q4 increased sequentially by CAD 13.7 million or 44.6% from Q3. This significant growth was due to several factors, including higher selling prices, lower freight costs, increased productivity, and reduced SG&A spending. These factors were partially offset by increased warehousing costs and an unfavorable foreign exchange impact. Turning now to our balance sheet and financial position on slide 21, our cash position stood at CAD 78.4 million at the end of Q4, a slight decrease from CAD 82.1 million at the end of Q3. Long-term debt at quarter end totaled CAD 1.077 billion, down CAD 17.7 million from the end of the previous quarter. Net debt decreased CAD 14.4 million from Q3 to remain relatively stable at CAD 1.033 billion. Our net debt to last twelve months Adjusted EBITDA ratio improved to 8.9 x in Q4 from 9.5 x in Q3. Leverage decreased due to a slightly lower level of net debt, coupled with a higher Adjusted EBITDA in the last twelve months. Looking at 2023, even with ongoing capital investments in our Sherbrooke expansion project, we expect deleveraging will progress steadily in 2023 as Adjusted EBITDA improves and TAD Sherbrooke continues to ramp up. At quarter end total liquidity representing cash and cash equivalents and availability from revolving credit agreements, stood at CAD 137.5 million. CAD 29.6 million of cash was held for the TAD Sherbrooke and Sherbrooke expansion projects. I will conclude my section by reviewing capital expenditures on slide 22. Total CapEx for 2022 was CAD 115.6 million, including CAD 20.7 million for TAD Sherbrooke and CAD 53.4 million for the Sherbrooke expansion project. Annual capital spending was lower than initially forecasted due to reductions in discretionary projects and delays related to supply chain issues on strategic projects. We are projecting CapEx between CAD 200 million and CAD 230 million for 2023, including spending related to the Sherbrooke expansion project. Thank you for joining us this morning, and I'll now turn the call back over to Dino. Thank you, Mark. I will conclude on slide 24. We are steadily progressing along a recovery curve to drive long-term shareholder value. As such, we continue to deliver solid top line growth in the fourth quarter and improved profitability. Price increases have been fully implemented across all our segments and regions to offset inflation. Given this inflationary environment, we are prudently investing in our brands to support price increases and innovations. Our TAD Sherbrooke production capacity continues to be ahead of ramp-up plans with the Sherbrooke expansion assets coming on stream in 2023. We refocused our Memphis operations to drive efficiency on TAD and facial products, which should improve profitability ongoing. Away from home is moving towards a sustainable profit model as we are undertaking long-term actions to improve that business. Our leverage ratio should progressively improve as Adjusted EBITDA accelerates and our TAD Sherbrooke facility continues to ramp up. Finally, we will keep investing in our organization and culture to drive future growth. In fact, on that note, 2022 was a difficult and challenging year for our industry and our company. I wish to thank the 2,700 employees of Kruger Products across North America for meeting the challenges of 22 while continuing to get us ready for 23 and beyond. Their efforts are beginning to take hold, and I'm optimistic about our future. To each of you, thank you. Now, let's turn our attention to the outlook for the first quarter of 2023. Price increases are in place, and we believe inflationary pressure has stabilized while our operating efficiency continues to gain traction, and we tightly manage discretionary spending. We expect Adjusted EBITDA in Q1 2023 to be similar to Q4 2022 and significantly ahead of Q1 2022. We will now be happy to take your questions. Thank you, ladies and gentlemen. Should you have a question, please press the star followed by the one on your touchtone phone. If you'd like to withdraw your question, please press the star followed by the two. If you're using a speakerphone, please lift the handset before pressing any keys. One moment, please, for your first question. Your first question comes from Hamir Patel from CIBC. Please go ahead. Hi good morning. Good morning Amir. You know, with respect to the market share data that you present, have you seen any signs in early 2023 of share starting to stabilize as kind of the pricing has already been felt in the market? It's too early to see the share stabilizing, but I would say the actions that will help us drive share are evident. A couple of things happened last year, this is normal during inflationary times and quite frankly, for most CPG categories is as prices go up it creates instability in the market. Consumers don't know what to expect as prices start to change fairly quickly. What happens is you know retailers will slow down on their promotions or support their private label because that one they can control, whereas the brands, the prices are still moving around. We did see less promotions on branded tissue products in 2022 through the price increases. We also saw some price gap expansion during that period of time as new pricing went in for trademark. As we started exiting the year and early into this year, we're seeing a more of a return to normal for promotion of brands. You know, the brands drive traffic and for the retailers, so, you know, there's an encouragement to wanna promote the brands and tissue. We're seeing a more stable price gap returning back to normal. I think those factors, more promotions, better price gap management, consumers becoming more unhappy but more aware that the prices are here to stay, and of course, the marketing work that we're doing in supporting innovations, I expect to see our share start to return to a more normalized level over time. Okay great thanks Dino that's helpful. Just wanted to turn to the TADs. You know, we've seen a lot of capital, project inflation across the industry. Do you have a sense as to, you know, if you were to try and be in the market for a new TAD today, what the capital cost would be for anybody trying to build a TAD in North America? I don't but I'd probably if you were to ask me in an elevator, I would say to you, I'd probably add 20% to what we, at least 20% to what we just paid recently. You know, we paid CAD 575 million for that facility. I'd probably say it's 20%-25% just based on. You know, not just the input costs, but obviously, transportation costs, construction costs, you know, everything in that supply chain has gone up. Okay no makes sense. Okay that's all I had I'll turn it over. Thanks Dino. Thanks William. Your next question comes from Sean Steuart from TD Securities. Please go ahead. Thanks. Good morning, everyone. Good morning Sean. Dino can you remind us of your fiber mix between hardwood and softwood pulp across the full operations? Any ability to flex that recipe a little bit at the margin? I'm just trying to dial in our cost assumptions next year, assuming differing spreads between hardwood and softwood pulp. Yeah that's a great question. I'm gonna start at the other end of that question which is, you know, our quality is first and foremost. We need to maintain the quality of our products. We will adjust fiber baskets accordingly if we have the opportunity to do so. Obviously, when you change the fiber basket, it has impacts on softness and strength and absorbency. You know, we stay within a very tight range to make sure that we're delivering the quality that we promise to our customers and to our consumers. Having said that, we do have some ability to flex and still deliver that output quality, but it's not dramatic, Sean I, you know, I will I think I've said this before, we're usually in the 60/40 range. This is not a, you know, an 80/20 or a 90/10. It's pretty tight range, and it depends on whether you're talking about towel or bath and obviously, our better quality towels or baths or more of our mainstream. We do all that. I'm not gonna get into the specifics here. That's, you know, it's part of a lot of actions we undertook last year to see if we can continue to tweak our fiber basket given the arbitrage that existed. We do that, but first and foremost is maintaining our quality. Okay. That's that's great context. Thanks for that Dino just so I'm clear on it, all the price increase efforts that have rolled out across consumer and away from home, are those fully baked into price realizations now? Is there any follow-through we can expect through the first half of this year? Is it all baked in already? Yeah Sean it's a great question. I would say the answer is yes. When you look at the total fiber basket in and in Canadian dollars, 'cause you have to understand, you know, the piece that worries me right now is the Canadian dollar starting to deteriorate, and obviously, most of our commodities are bought on US dollars. That's one we're really watching carefully. I would say, generally, we are priced into market. We had some minor pricing. I wouldn't call it minor, but we had contractual pricing in January. Both in the U.S. consumer business and our AFH business did a small price increase announcement. Other than that, though, I would say that we are balanced with the cost basket that we're seeing today. Of course last year what hurt us was the lag because costs come up fairly quickly, and then there's always a 12, you know, 12 to 16-week lag before you can get pricing. We feel now that's behind us and more in line on an ongoing margin structure. Okay. That's useful. Thanks very much guys. That's all I have. Thanks Sean. Your next question comes from Zachary Evershed from National Bank Financial. Please go ahead. Good morning everyone. Congrats on the quarter. Morning thank you. Question couple questions for you on the CapEx projects for 2023. When we're talking about the discretionary projects that were delayed, how much of that is gonna be caught up later, and how much of that was actually just fully discretionary and can be discarded? Morning Zachary. When we look at our discretionary spending, it's relatively low compared to we're spending on our strategic projects. Those were just prudent in reductions because of the cash relative experience that we had in 2022. Looking at 2023, we plan to maintain that same level because we are spending significant amount on our Sherbrooke expansion project. We plan to maintain that level of discretionary spending on projects that are unrelated to the strategic project. Understood. Thanks. Great segue there. Given your total liquidity position versus the CapEx budget plan in 2023, what's your confidence level in your free cash flow generation this year? When we look at our free cash flow, and certainly it brings us into our leverage conversation as well. We definitely have expectations for improved EBITDA as we look out into 2023, which will allow us to improve our cash flow. We do have our strategic project in Sherbrooke fully financed, so that is gonna allow us to use our operational cash flow and improve this year. Certainly, that's all based on an improved EBITDA outlook in the business overall. If I can add to Mark's point, you know, we're pleased with the recovery, obviously. We feel good about how we delivered in Q4 and where we're looking at Q1. 2023 will continue to be a volatile year. We're not out of the woods. I think, you know, there continues to be a lot of movement and uncertainty in the marketplace. We will manage 23 similar to what we did 22, which is, you know, watch our capital very carefully, watch our investments very carefully, hold back any discretionary spending until we see how the year plays out, have contingency planning in place, be very cognizant of what's going on on the cost side so that we're able to react quickly. A lot of the actions that we had to take in 2022, given where the marketplace was going, I think we're gonna operate in the same way in 2023 to make sure that, you know, we can deliver the results we need to deliver. Great. Well, I think so I'll turn it over. Thanks, Zachary. Ladies and gentlemen, as a reminder, should you have a question, please press star followed by the one. Your next question comes from Paul Quinn from RBC Capital Markets. Please go ahead. Yeah thanks guys. Good morning. Solid results. Thank you Paul. Good morning. You did a great job outlining the cost increase of CAD 40 million in Q4 year-over-year and CAD 180 million in 2022. Just that 14% price increase year-over-year, what does that translate to in dollars? Is that over the CAD 40 million year-over-year in Q4? Well, there's a lag in there, Paul. I would say those numbers are pre-priced to post-price after the price increase. They don't represent necessarily the annual financial impact 'cause there's a lag built into that, which I talked about earlier. That lag, unfortunately, is, as I said, engineered into the way that pricing gets done in the grocery segment. You know, we were not able to overcome that lag, and that hit us. As I said, we're back now on a flight path that I think our margin is balanced. Okay I'm still not sure. Did the pricing in 2022 offset the cost, or it will once fully implemented in 2023? No it did not. It did not because of the lag, right? Inflation started hitting us as we entered the year, and then, you know, you price in steps. We ate a lot of inflation in Q1 and Q2 of the year as we had, you know, got pricing out in the midyear for the Canadian business. U.S. was a little more flexible because there we have some contracts where they come due, the same with Away From Home. Depends on the business, but generally, we lag as essentially anybody who went through 2022 did because inflation came so fast and so broad and so steep that the lag really was what hurt us. Our pricing did not cover costs in 2022, but the pricing I've put in place now on a run rate basis will cover costs. Okay. That's helpful. Just trying to understand the CapEx. I mean, initially in 2022, you got it for CAD 160 million-CAD 180 million and then dialed it back to CAD 130 million-CAD 140 million, and then actually spent, you know, just under CAD 116 million. You're almost doubling it in 2023. Is this a lot of catch-up, or did you actually delay a lot of the projects just 'cause of concerns over leverage? Paul we really did have a reduction in our discretionary spending. We also had delays due to the supply chain issues on the strategic projects for the Sherbrooke expansion in particular. That doesn't actually affect the project itself in terms of the implementation timing. It's just really a shift in the CapEx that we're gonna see into 2023, probably more so in the back half of 2023. A big chunk of the spending will occur. Overall, just a shift, I would say, year to year. Okay. Just overall, you know, it sounds like, Dino, the implementation of price increases in 23 will offset this cost headwind that you got in 22. Is that gonna bring you to the level of profitability that, you know, is what you're targeting in the business? Or are you considering more price increases in 23? I would say at this point, Paul, we're not considering pricing in 23 other than the ones that I just talked about with Sean's question that we took. We, we do have some contractual customers that just come on cycle, but that's really relatively minor relative to our whole base. To answer your question, if we deliver the margins that we now have on a run rate basis, if we can deliver the volume that we have, including, you know, TAD Sherbrooke coming on board and then some of the Sherbrooke expansion that's gonna come on board, and if we can get our operational efficiencies at Memphis where we expect it to be, that'll be the model that'll drive, you know, sustainable profit growth at the level that we expect. Okay, fair enough. That's all I have. Thanks, Paul. Presenters there are no further questions at this time. Please proceed with your closing remarks. Great thank you I wanna thank you all for joining us on this call today. We look forward to speaking with you again following the release of our first quarter results. I personally, even though we had a really good Q4, I'm glad to see 2022 from a business point of view behind us and happy to talk about a new year. We'll do that when we report our first quarter results, for 2023 in a few months. Thank you all and have a great day. Ladies and gentlemen this concludes your conference call for today. We thank you for joining and you may now disconnect your lines.