Transcontinental (TCL-A) Q2 2025 earnings summary

Executive summary

• Adjusted net earnings per share grew 11.5% year-over-year in Q2 FY2025 to $0.58, reflecting profitability initiatives and cost reductions.

• Revenues for Q2 FY2025 were $684.1 million, up 0.1% year-over-year, with Retail Services & Printing (RS&P) showing first volume growth since 2022.

• Packaging sector saw a 2% revenue decline due to lower volumes and the sale of industrial activities, partially offset by FX gains.

• Special dividend of $1.00 per share paid in April 2025, funded by operational cash flow and asset sales.

• Strong safety improvements, with incidents down 40% year-over-year in the first six months.

Financial highlights

• Consolidated adjusted EBITDA was $108.5 million, down 1.5% year-over-year, mainly due to the sale of industrial packaging and lower packaging volumes.

• Adjusted EPS improved from $0.52 to $0.58 year-over-year.

• Financial expense dropped by $5.4 million to $9 million, driven by lower debt and interest rates.

• Operating cash flow was $80.3 million; CapEx was $24.5 million, $5.6 million lower than last year.

• Net debt ratio improved to 1.70x from 2.00x year-over-year, with net indebtedness at $799.5 million as of April 27, 2025.

Outlook and guidance

• Expects organic volume and profit growth in Packaging for H2 FY2025, supported by medical market recovery and a strong sales pipeline.

• RS&P segment anticipated to deliver stable adjusted EBITDA for FY2025 despite tougher comparables in H2.

• Confident in achieving cost savings target of $40 million.

• Guidance excludes potential impacts from tariffs and Canada Post labor conflict.

• Significant cash flows from operations expected to further reduce net indebtedness and support investments and shareholder returns.