Good morning, ladies and gentlemen. Thank you for standing by. Welcome to KP Tissue Second Quarter 2024 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 at any time you have difficulties hearing the conference, please press star followed by zero for operator assistance. Before turning the meeting over to management, I would like to remind everyone that this conference call is being recorded on Tuesday, August 13, 2024. I would now like to turn the conference over to Mike Baldissera, Director, Investor Relations. Please go ahead, sir. Thank you, operator, and good morning, ladies and gentlemen. My name is Mike Baldissera. I'm the Director of Investor Relations at KP Tissue, Inc. The purpose of this conference call is to review the financial results of the second quarter of 2024 for Kruger Products Inc, which I'll refer to as Kruger Products going forward. With me this morning is Dino Bianco, our Chief Executive Officer of KP Tissue and Kruger Products, and Michael Keays, the Chief Financial Officer of KP, KP Tissue, and Kruger Products. The following discussions and 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 all in Canadian dollars, unless otherwise stated. The press release reporting our Q2 2024 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 our website and will also be available on SEDAR. Finally, I would ask that you, during the call, to 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 for you to limit your questions to two. Thank you for your collaboration, ladies and gentlemen. I'll now turn the call over to Dino Bianco, our CEO. Dino? Thank you, Mike. Good morning, everyone, and thank you for joining us for our second quarter earnings call for fiscal 2024. We delivered against expectations in the second quarter of 2024, with revenue-driven profitability generating more than CAD 65 million in Adjusted EBITDA. In the consumer segment, we brought added innovation and capacity to the Canadian facial tissue market to build our leadership status with a 42.8% share, while maintaining our number one and two positions in the bathroom tissue and paper towel categories, respectively. We also continued growing our away from home business on the strength of increased sales and Adjusted EBITDA year-over-year and sequentially. We are pleased with the strong momentum across all our business units, both in Canada and the U.S., and despite a labor disruption at our Crabtree, Quebec facility that has since been resolved with a five-year collective bargaining agreement, we are very pleased with our results. From a margin management standpoint, we recently announced a price increase in our consumer segment to mitigate escalating pulp prices that are approaching peak levels. This pricing adjustment, along with other productivity initiatives, will ensure we continue to drive profitable growth. Now, let's take a look at our quarterly numbers on slide 6. Revenue growth of 9.3% in the second quarter of 2024 can mainly be attributed to higher sales volume, favorable sales mix in the consumer segment, and improved pricing year-over-year. Revenue is also positively impacted by foreign exchange fluctuations on U.S. dollar sales. Canadian revenues increased 5.2% in the second quarter, while the U.S. improved 14.8%. Robust revenue in the U.S. continued to be fueled by new business growth. Adjusted EBITDA was up 18.6% year-over-year to CAD 65.3 million in the second quarter, mainly driven by enhanced sales volume, improved sales mix, improved prices, and lower pulp costs. These factors were partially offset by several items. Michael will provide you with the details in his financial review. On slide seven, pulp average prices in Canadian dollars increased as high as 21.6% in the second quarter of 2024 from the previous quarter, while year-over-year average prices for NBSK and BEK were up 14.5% and 18.4% versus Q2 2023. In fact, NBSK prices in Canadian dollars reached a record level during the second quarter of 2024. Based on industry forecasts, pulp prices are expected to remain elevated over the course of the year, and as a result, we announced a price increase for our consumer segment that will be effective in early September. Let's move on to our operations on slide 8. Production rates have progressed according to plan at our facilities, while the North American market continues to remain highly utilized in tissue. Our upcoming paper machine in Sherbrooke is on schedule, with the startup on track for Q4 2024. Our new facial tissue assets in Gatineau and Sherbrooke are continuing to exceed expectations and produce high-quality products and an expanded portfolio. New TAD paper and converting output is ahead of last year, which is allowing us to meet the increased demand of premium products from our customers. Finally, we ratified a 5-year collective bargaining agreement at our Crabtree facility that should provide us with production stability going forward. Turning to our facial market update on slide 9. As mentioned in recent calls, the facial tissue category in Canada underwent a significant reset following the Kleenex exit from retail almost a year ago. Scotties continued to build on its leadership position in the second quarter, with a 52-week market share rising to nearly 44.3%. As mentioned earlier, both our legacy and new facial lines at Sherbrooke and Gatineau are operating above plan. We also increased innovation with the launch of Scotties Pocket Packs for consumers on the go, and introduced new Ultra Soft and Ultra Soft with Lotion SKUs to meet the consumer's needs for premium facial tissue. In addition, we strategically added marketing support behind Scotties House and Home Design Series, as well as sponsorship of the Canada's Got Talent television show. All of this has resulted in increased investments in the Scotties brand. Now let's move on to brand support on Slide 10. We maintained ongoing support for our multiple brands to drive awareness and continue to drive share growth. For example, we offered consumers the chance to win one of 3 VIP experiences, each worth approximately CAD 10,000 at an NHL playoff game. We also introduced only in Canada promotions to highlight the leadership position of our brands in Canada. On Bonterra, in Q2, 2024, we also increased distribution and support with targeted media to expand the awareness and trials of the sustainable brand for environmentally conscious consumers. In addition, we released a unique Cashmere UltraLuxe Bathroom Guide, setting the standard for restaurant bathroom excellence by recognizing some of the most beautiful restaurant bathrooms in Toronto. This guide, which uses an exclusive three-flower rating system, evaluates restaurant bathrooms on a set list of criteria such as lighting, amenities, and comfort. We look forward to expanding this concept in the coming months. Turning to slide 11, the data presented is taken from Nielsen. It shows branded market share performance over a 52-week period, ending June fifteenth, 2024. I am pleased to report that our bathroom tissue is recovering after a high inflationary period during the last couple of years. Facial tissue and paper towel, meanwhile, continue to grow share based on investments in our brands, strong go-to-market and retail activation. Let's look at the away-from-home segment on Slide 12. We generated robust Adjusted EBITDA that improved double digits over Q2 2023 and Q1 2024. Sales volume improvements both year-over-year and sequentially drove strong profitability in the second quarter, with seasonality a contributing factor on a sequential basis. Looking ahead, away-from-home converting asset performance continues to support higher volume, while the startup of our Sherbrooke paper machine in the latter part of the year will provide internal paper for our AFH business, thus reducing our external requirements. Finally, on AFH, sales volume continues to track well despite an uncertain economic environment. I will now turn the call over to Michael. Thank you, Dino, and good morning, everyone. Please turn to slide 13 for a summary of our financial performance for the second quarter of 2024. As Dino mentioned, we generated an Adjusted EBITDA of CAD 65.3 million on sales of CAD 509.8 million, a strong improvement and profitable growth year-over-year. Net income decreased CAD 3.9 million from CAD 14.5 million in Q2 2023, totaling CAD 10.6 million in the second quarter of 2024. The year-over-year decline can be explained by several factors, including a higher foreign exchange loss of CAD 12.8 million and a greater depreciation expense of CAD 5.2 million. These factors were partially offset by increased EBITDA of CAD 10.3 million, lower interest expense and other finance costs of CAD 1.7 million, reduced income tax expense of CAD 1.5 million, and a loss on the sale of fixed asset of CAD 1.1 million that happened in Q2 2023 that did not reoccur. In the quarterly segmented view on slide 14, revenue from our consumer business grew 10% year-over-year to CAD 421.9 million on stronger volume, favorable sales mix and higher selling prices. Our consumer segment also benefited from a positive Forex impact on U.S. dollar sales in the quarter. In the Away-from-Home segment, our revenue improved 6.1% year-over-year and 17% sequentially to CAD 87.9 million in the second quarter, for the same reason as we've seen for our consumer business. Our AFH segment delivered revenue growth both in the U.S. and Canada, which highlight Dino's point, that we received solid sales contribution from all segments and regions. Consumer-adjusted EBITDA in the second quarter totals CAD 60.3 million, compared to CAD 53.3 million in Q2 2023, with a margin of 14.3% versus 13.9% for the same period last year. On a sequential basis, consumer-adjusted EBITDA declined CAD 2.3 million from Q1 2024. For our AFH business, EBITDA of CAD 9.6 million in the first quarter was up double digits year-over-year, and in the second quarter was up double digits year-over-year and sequentially. AFH EBITDA increased CAD 3.8 million from Q2 2023, with a robust margin of 10.9%.... while sequentially, the AFH adjusted EBITDA improved CAD 1.8 million from Q1 2024. Moving to slide 15, we review consolidated revenue for Q2 2024, which expanded by CAD 43.5 million or 9.3% year-over-year. The increase was mainly driven by higher sales volume, higher selling prices in our consumer and AFH businesses, and a positive FX impact. On a geographic basis, revenue in Canada rose CAD 13.8 million, or 5.2% year-over-year, while U.S. revenue grew by 29.7% to 20.7 million or 14.8%. On slide 16, we look at our year-over-year profitability for the second quarter. Adjusted EBITDA increased by CAD 10.3 million to CAD 65.3 million in the quarter, resulting in a margin of 12.8%, compared to 11.8% for the same period last year. Numerous factors contributed to generating this healthy adjusted EBITDA in the second quarter, which included favorable sales mix, higher selling prices, and lower pulp costs compared to last year, and these items were partially offset by higher manufacturing overhead expenses, increased warehousing expenses, and higher SG&A costs. Now, if we move to slide 17, where we compare Q2 revenue sequentially to Q1 2024, our revenue increased CAD 30.4 million or 6.3%, mainly due to higher selling prices, improved sales volume, and a positive FX impact here as well. Geographically, revenue in Canada rose by CAD 12.8 million or 4.8%, while the revenue in the U.S. grew by CAD 17.6 million or 8.2%. On slide 18, our adjusted EBITDA in the second quarter declined slightly by CAD 1.8 million or 2.7% to CAD 65.3 million, mainly due to increased manufacturing overhead and higher pulp prices. These factors were partially offset by our selling price increase, increased sales volume, as well as reduced freight, warehousing, SG&A, and marketing expenses. As a result, our adjusted EBITDA margin was 12.8% in the second quarter, down 120 basis points sequentially from 14% in Q1. Now turning to our balance sheet and financial position on slide 19. Our cash position reached CAD 127.2 million at the end of the second quarter, an increase of CAD 10.1 million from Q1 2024. The sequential increase in cash can be explained by a strong EBITDA performance in the second quarter, combined with a reduced working capital. Our long-term debt at the quarter end stood at CAD 1.01 billion, which was down CAD 97.7 million sequentially. This was primarily due to the reclass of CAD 125 million in senior secured notes that are payable in April 2025. Our net debt, meanwhile, increased by CAD 22.7 million sequentially to CAD 1.05 billion, largely based on spending related to the Sherbrooke expansion project. As a result, our net debt to last twelve-month Adjusted EBITDA ratio remained stable in the second quarter versus the previous quarter at 4.0 times, as our net debt was offset by greater Adjusted EBITDA over the last twelve months. On a year-over-year basis, our leverage ratio significantly improved from the 5.7 times in Q2 2023. In terms of total liquidity, we had CAD 428.7 million available at the end of the quarter. In addition, we had CAD 16.6 million of cash that was held for the Sherbrooke expansion project. To conclude my section, we will review the capital spending on page 20. CapEx for Q2 totaled CAD 50.4 million, which included CAD 46.2 million for the Sherbrooke expansion project. At the halfway mark for the fiscal year, total CapEx reached CAD 100.4 million, so we're well within our expected range for the full year to be between CAD 200 million and CAD 220 million. Thank you for joining us this morning, and I'll now turn this call back to Dino. Great. Thank you, Michael. Please turn to slide 21 for a quick word on our sustainability focus. On this page, you will find our updated 2030 targets that were covered in our last quarterly call. On July 22, we released our new sustainability report, which tracks our progress against these goals. We are very pleased with our progress, and I encourage you to consult the full report for more details. Let's turn to slide 22 for my closing comments. We received strong top-line contributions from all our business segments and geographic regions in the second quarter to drive growth and margins. Price increases have been announced for early September to mitigate escalating pulp prices, while we continue to invest in our brands to enable long-term share growth. We will increase capacity to meet strong demand through our Sherbrooke expansion and new facial lines. Our away-from-home segment continues to deliver against the sustainable profit model. Our leverage ratio is expected to remain within its current range, based on the final year of spending in Sherbrooke in 2024. Finally, we keep investing in our organization and culture to drive future growth. Now, let's turn our attention to the outlook for the third quarter of 2024. We anticipate Adjusted EBITDA will be in the range of Q2 2024, despite escalating pulp prices and the impact of the Crabtree labor settlement. We will now be happy to take your questions. Thank you, sir. Ladies and gentlemen, if you would like to ask a question, please press star, followed by one on your touchtone phone. You will then hear a three-tone prompt acknowledging your request. And if you would like to withdraw from the question queue, please press star followed by two. And if you're using a speakerphone, you will need to lift the handset first before pressing any keys. Please go ahead and press star one now if you do have any questions. And your first question will be from Hamir Patel at CIBC Capital Markets. Please go ahead. Hi, good morning. Morning. You know, you announced a high single-digit price hike in the Canadian consumer business for September. Has that been accepted by your major customers, and have your competitors announced a similar level of increase? Yeah, Hamir, thank you for the question. Yeah, I mean, we've been working with our customers and showing the justification for the price increase. Obviously, they are very interested in the rationale for the price increase, and many of them do track the commodities very closely. So I think they all understand the need for pricing when you factor, particularly in Canadian dollars for the Canadian side of the business. So I would say that process is always challenging, no matter when. Nobody wants to hear about a price increase. In fact, nobody wants to take a price increase, particularly with, you know, the state of, of the economy, but this one is necessary and justified, and I think, we have been able to get through most customers, all customers, I should say, now, for an effective early September date. Fair enough. And as far as- Yeah, as far as competition, you know, we don't hear anything official, but you know, we understand that other tissue companies are also showing the same rationale for pricing. Right. Okay, that makes sense. You know, we've seen Suzano looks like they're doing some trials with one of their new products that can replace softwood in certain applications. Do you see any potential for you to benefit from some of these innovations on the hardwood side? Or just given your quality requirements, you're not gonna kind of break away from the NBSK amounts that you use right now? Yeah, Hamir, you're well informed. You know, obviously, we're we have great partnerships with our pulp suppliers and continue to work with them and continue to work internally on optimizing our fiber basket to deliver the same quality with you know, better pricing. So that product that you're talking about is one that we are looking at and trialing to see if there's potential in our network. You know, first and foremost, though, we need to deliver against our quality specs, whether it's our own brands or any private label that we supply. So that's always our first stage gate, and if we can get through that and hopefully get a price improvement, you know, that'll be a win-win. So we are looking at that and continue to look at fiber optimization as part of our productivity initiatives. Okay, fair enough. Thanks, Dino. That's, that's all I had. I'll turn it over. Thanks, Amir. Next question will be from Sean Steuart at TD Cowen. Please go ahead. Thanks. Good morning, everyone. Morning. First question, hoping for some updated perspective on the away from home margin trend. You know, I think for a while, the long-term target you guys have articulated has been high single digit EBITDA margins. You've tracked better the last couple of quarters with some momentum. Any thoughts with respect to rethinking long-term margin potential at the away from home segment? Yeah, it's a great question, Sean. I will be honest, I mean, and I think probably most of us on the call, you know, the AFH business turnaround has been better than I expected and faster than I expected. You know, I've said high single digits and maybe more stability around low double digits. They're getting there now, and I was expecting that over time. So, do I think there's more there? Yes, I do, and I think the next big step for AFH is once we start getting more internal paper, because they are continuing. We are paper constrained, and they are the ones continuing to buy paper on the market. So once our new paper machine comes up later this year, there won't be an immediate benefit, but certainly over the ramp-up curve over the next 18 months-24 months, they will start to see that benefit. I think that'll be a step change. Obviously, they've done great work on volume growth. They've done great work on pricing management, SKU portfolio, operations through OpEx. And now, if we can get internal paper, I think that'll be the full bundle. And I think they should now be in the low double-digit EBITDA once those things come to place. Okay. Thanks for that, Dino. And then just following on the Sherbrooke ramp, you gave us the time frame. Can you remind us just the EBITDA, ultimate EBITDA incremental contribution you're expecting once that asset is fully ramped up and you realize all the benefits? Is there a number you can put on that? Yeah, we don't usually quote that number, so I'm not going to. Sorry, sorry for that, Sean. But I will tell you, you know, one of the, one of the benefits of what that paper machine is gonna do for us is, is just as I mentioned, for away from home, is insourcing some paper that we're buying in the market. And that does two things: It provides a lower cost, but more importantly, or just as important, it provides consistent high quality when you're internally sourcing your paper, which should make our whole network run better, our, our converting lines and, and so forth. So, that paper machine, you know, we said it'll start in Q4. It is getting ready to ramp up, so we may be able to get a few days earlier than expected, and we should start to see some benefit from that in Q4. The primary use will be for internal paper. You know, the second big use for that line paper machine will be to feed the facial lines that we've just put in place. So the growth in facial and that asset, that paper machine we have purchased, is well set up to provide a very high quality facial. So and then, of course, we'll see some incremental case production from that line across our converting network, that asset's already in place for that. So we're looking forward to that, and, and much needed, quite frankly, given our paper supply situation. Understood. Okay, thanks very much, Dino. Appreciate it. Okay. Thanks, Sean. As a reminder, ladies and gentlemen, if you do have any questions, please press star followed by one on your touchtone phone. Your next question will be from Zachary Evershed at National Bank. Please go ahead. Good morning, everyone. Thanks for taking my questions. Morning. Given the announcement of the Clearwater Sofidel transaction, what's your view of participating in industry consolidation? Yeah, I think it's a safe bet to say that Kruger will look at every opportunity to consolidate to grow. And as I've mentioned before, that includes acquisitions, greenfield sites or increased assets at existing sites. So we look at all of that. So anytime there's a company for sale, we will be looking at it at the table. So I'll say that. Sometimes we're successful, sometimes it may not be the right fit. But, you know, we are in a growth mode, and we will continue to look at all options. If now that the Clearwater has come to closure, obviously, we now understand what the future market will look like, and also now, reassessing where our opportunities continue to be for future growth across North America. That makes sense. Thanks. For number two, we're seeing some commentary suggesting pulp prices could actually break later this year, given activity in China. Your outlook highlights pulp costs that remain elevated through the rest of the year. Are those both the same outlook? You're just referring to elevated versus a year ago, or does your current forecast call for steady pulp prices? Yeah, you know, look, no, there's a lot of volatility in pulp. Even the pulp experts, a lot of dynamics that start to change. I would say certainly China's come down. China escalated rapidly early, they had by amplitude and speed, and now they're starting to just back, because the underlying fundamentals aren't there. The North American market remains at elevated levels. I anticipate, based on, you know, the various forecasts that we follow, that this market will likely go sideways now. I'm not sure how much more above that it'll go, but it certainly will not decline at any rapid rate. My guess is it'll go sideways. One of the things, you know, our organization is trying to do as it relates to our pricing business, we have certain part of our business, mainly on the private label and away-from-home side, where we have contracts that renew every three months, so those will stay close to market. Where we price to market, mainly on our Canadian consumer side, we also wanna mimic that, not on a contract basis, but in terms of how we respond to changing pulp prices, both up and down. I think you'll start to see us be a little more closer to the curve without doing a bunch of, you know, price changes, but a little closer to the curve as it relates to the commodity changes. Not just pulp, obviously other key inputs as well. And so we announced the September increase based on the high pulp prices. We think that's the right level to be at. We think pulp will be at that level for a while, and then we'll watch it in the new year to see if we need to make any further adjustments. Thank you very much. I'll turn it over. Thank you. Next question will be from Frederic Tremblay at Desjardins. Please go ahead. Thanks. Good morning. Morning. Most of my questions have been answered, but I do have one on AFH volume and just maybe better understanding the volume trends there. Obviously seeing a volatile economic environment and in some sectors, like, restaurants are going through a tough time right now, it seems. So just wanted to better understand the reasons or the drivers behind the volume success that you've had in AFH and sort of get your outlook on things based on what you're seeing from your customers right now. Yeah, it's a good question. I mean, you know, the reality is the market hasn't actually recovered to pre-COVID levels, so the market has been improving since the trough in 2020, but still has not achieved the levels. Our growth has come from the fact, two things. One is, more of our growth is coming from the U.S. market, where we're actually gaining share. We're a smaller player there, so anything we do with incrementality is contributing to our growth. Whereas in Canada, when we're growing with the market, and, you know, we are great partners with a couple of key away from home customers or distributors, who happen to be growing at above the market. So we're also growing quickly, given our relationship with them. Don't forget, you know, our away from home business covers many sectors, not just restaurants and obviously, you know, hospitality or some that we're watching right now with the economy. We also cover industrial and healthcare and various other segments as well, who have different growth trajectories, you know, despite the what could be a potential economic slowdown. So, you know, I think the away from home volume is real. It's based on a strong foundation. And, you know, it is benefiting more on the U.S. side as we grow share, with Canada kind of being steady growth with market. Very helpful. That's all I had. Thank you. Thank you. Thank you. At this time, Mr. Bianco, we have no further questions. Please proceed. Great, so, I'll wrap it up here. I just wanna thank everybody for joining us on the call today. You know, we're very pleased with our results, and we look forward to speaking with you again following the release of our third quarter results. So thank you all. Have a great day. Thank you, sir. Ladies and gentlemen, this does indeed conclude the conference call for today. Once again, thank you for attending, and at this time, we do ask that you please disconnect your lines.