Winpak (WPK) Q4 2023 earnings summary

Executive summary

• Q4 2023 revenue fell 5.7% YoY to $275.6M; net income attributable to equity holders rose 11.6% to $34.8M, or 54 cents/share.

• FY2023 revenue declined 3.4% to $1,141.4M, while attributable net income increased 15.4% to a record $148.1M, or $2.28/share.

• The 2023 fiscal year included 53 weeks versus 52 weeks in 2022; the additional week contributed an estimated 1.5% to 2023 sales volumes and net income.

Financial highlights

• Q4 EBITDA was $53.6M versus $52.2M YoY; FY EBITDA was $228.5M versus $220.0M.

• Q4 gross profit was $79.4M versus $79.5M; FY gross profit increased to $334.2M from $331.8M.

• FY operating income rose to $180.7M from $172.3M; net finance income was $19.1M versus $1.8M.

• FY operating cash flow reached $220.8M versus $77.6M; cash and cash equivalents ended the year at $541.9M.

Outlook and guidance

• 2024 sales volume growth forecast at 2%–4%, supported by new product launches, customer additions, contract renewals and new productive capacity.

• Consumer demand is expected to constrain growth aspirations for at least H1 2024; enhanced volumes are expected to improve profitability.

• 2024 gross margins expected slightly below 2023, with moderately rising raw material costs, competitive selling-price pressure and labor costs weighing on margins.

• 2024 capital expenditures forecast at $110M–$120M, primarily for the Winnipeg modified atmosphere packaging expansion.