Earnings call transcript: KP Tissue Q1 2025 shows strong revenue growth

KP Tissue Inc. reported significant revenue growth in its first-quarter 2025 earnings call, with revenue reaching $546.1 million, a 13.9% increase year-over-year. The company’s stock price remained stable despite the revenue beat, closing at $8.39. According to InvestingPro data, the stock is trading near its 52-week high of $6.21, with a market capitalization of $60.18 million. InvestingPro analysis suggests the stock is slightly undervalued at current levels. The earnings per share (EPS) forecast was not explicitly compared to actual results, but the strong financial performance suggests a positive trend.

Key Takeaways

• KP Tissue reported a 13.9% increase in revenue year-over-year for Q1 2025.
• Adjusted EBITDA improved by nearly 13% to $75.8 million.
• The company’s consumer segment revenue grew by 15.1%.
• New production assets exceeded start-up expectations, contributing to operational efficiency.
• Market conditions are favorable, with strong North American tissue demand.

Company Performance

KP Tissue demonstrated robust performance in Q1 2025, with revenue and adjusted EBITDA showing double-digit growth. The consumer segment, a major contributor, increased its revenue by 15.1% to $465.2 million. InvestingPro analysis reveals the company maintains a healthy dividend yield of 8.58% and shows remarkably low price volatility with a beta of 0.26. These metrics are among dozens of valuable insights available in the comprehensive Pro Research Report, which provides deep-dive analysis of over 1,400 US equities. The Away From Home (AFH) segment also saw a 7.7% increase, highlighting balanced growth across its operations. The company benefited from strong demand in North America, with U.S. revenue surging by 21.7%.

Financial Highlights

• Revenue: $546.1 million, up 13.9% year-over-year
• Adjusted EBITDA: $75.8 million, up nearly 13% year-over-year
• Net Income: $15.4 million, compared to $9.0 million in Q1 2024
• Consumer segment revenue: $465.2 million, up 15.1%
• AFH segment revenue: $80.9 million, up 7.7%

Outlook & Guidance

KP Tissue expects continued sales growth throughout 2025. The company provided guidance for Q2 2025, with adjusted EBITDA projected between $70 million and $75 million. InvestingPro data supports this optimistic outlook, highlighting that net income is expected to grow this year. The company’s overall Financial Health Score is rated as FAIR, with particularly strong momentum metrics. Subscribers to InvestingPro can access 8 additional exclusive ProTips and comprehensive financial analysis for KPT and other stocks. An announcement regarding a potential Through-Air-Dried (TAD) expansion is anticipated in the second half of 2025. The company continues to invest in brand development to drive long-term market share growth.

Executive Commentary

CEO Dino Bianco expressed optimism about the company’s future, stating, "We delivered strong sales growth in the first quarter, and we expect this trend will continue throughout 2025." He emphasized the importance of gaining market share as a long-term strategy and highlighted the company’s efforts to leverage its "Made in Canada" positioning amid trade uncertainties.

Risks and Challenges

• Potential market volatility due to trade environment and economic uncertainty.
• Rising pulp prices, with NBSK up 29.5% and BEK up 10.5%.
• Tight tissue market capacity could constrain growth.
• Tariff impacts and market uncertainties remain concerns.
• Need for continuous innovation to maintain competitive edge.

Q&A

During the earnings call, analysts inquired about potential TAD expansion locations and diversification strategies for the AFH segment. The company addressed concerns about tariff impacts and market uncertainties, confirming no significant pantry loading or inventory concerns. Executives reiterated their focus on adapting to market changes and enhancing organizational capabilities.

Full transcript - KP Tissue Inc (KPT) Q1 2025:

Conference Operator: Good morning, and welcome to KP Tissue’s First Quarter twenty twenty five Results Conference Call. Today’s call is being recorded for replay. All participants are currently in a listen only mode. Following the presentation, we will conduct a question and answer session. Instructions will be provided at the time for you to queue up for questions.

I will now turn the call over to Doris Kervick, Director of Investor Relations. You may begin your conference.

Doris Kervick, Director of Investor Relations, KP Tissue: Thank you, operator. Good morning, everyone, and thank you for joining us to review Kruger Products’ first quarter twenty twenty five financial results. With me this morning is Dino Bianco, the CEO of KP Tissue and Kruger Products and Michael Keys, the CFO of KP Tissue and Kruger Products. Today’s discussion will include certain forward looking statements. Actual results could differ materially from these forward looking statements due to known and unknown risks and uncertainties.

A list of risk factors can be found in our public filings. In addition, today’s discussion will include certain non GAAP financial measures. The reconciliation of these non GAAP financial measures to the most comparable GAAP measure can be found in our MD and A. The press release reporting our Q1 twenty twenty five results was published this morning and will be available on our website at kptissuing.com. The financial statements and MD and A will also be posted on our website and on SEDAR plus The investor presentation to accompany today’s discussion can be found in the Investor Relations section of our website.

I will now turn the call over to our CEO, Dino Bianco. Dino?

Dino Bianco, CEO, KP Tissue and Kruger Products: Thank you, Doris. Good morning, everyone, and thank you for joining us for our first quarter earnings call for fiscal twenty twenty five. We are pleased with our strong first quarter results, especially considering the uncertain and volatile economic environment. Adjusted EBITDA reached $75,800,000 in the quarter on revenue that increased double digits year over year. Revenue for the Consumer segment was mainly driven by higher sales volume in Canada and The U.

S. And improved pricing. Our Away From Home business, which has been rebranded Kruger Pro, also generated higher sales volume in the same period last year, although profitability was unfavorably impacted by the purchase of external paper. We expect that our newly deployed LDC paper machine in Sherbrooke will essentially meet all in house paper requirements beginning in the second quarter of twenty twenty five. In fact, the new LDC paper machine and facial tissue converting line, which are all part of the Sherbrooke expansion project, have exceeded start up expectations.

And given the changing tariff announcements affecting North America and the world, the impact to our business in the first quarter was not significant. We will continue to closely monitor the impact of potential tariffs and have developed contingency plans to mitigate any potential financial risk. Now let’s take a look at our quarterly numbers on Slide six. Revenue growth of nearly 14% in the first quarter of twenty twenty five was spurred by pre shipped volume into The U. S.

Ahead of tariffs, favorable selling prices across both consumer and AFH segments and a positive foreign exchange impact on U. S. Dollar sales. Revenue in Canada increased 7.6 in the first quarter, while U. S.

Sales continued a strong upward trend with growth of 21.7% year over year. In terms of profitability, adjusted EBITDA grew nearly 13% year over year to $75,800,000 in the first quarter. The year over year improvement can be attributed to higher sales volume, increased selling price and lower manufacturing overhead costs. These factors were partially offset by a number of items, including higher pulp prices and greater freight costs, including the impact of tariffs. Michael will provide you with more details in his financial review.

On Slide seven, pulp average prices in Canadian dollars increased single digits in the first quarter of twenty twenty five from the previous quarter, while year over year average prices for NBSK and BEK were up 29.510.5%, respectively, versus Q1 twenty twenty four. To summarize this chart, market pulp prices increased significantly in the first quarter, and industry analysts expect volatility in 2025 due to the uncertain trade environment. Let’s move on to our operations on Slide eight. Production rates exceeded our forecast in Q1 twenty twenty five, which has been critical as North American demand for tissue continues to be very strong. As previously mentioned, our new LDC paper machine in Sherbrooke and Facial Tissue line are surpassing start up expectations, while TAD paper machine and converting output remains ahead of last year.

For the rest of 2025, we anticipate production to further increase as new assets reach their maturity curve. Let’s turn to brand support on Slide nine. We continued our Made in Canada positioning across all trademark brands in the first quarter of twenty twenty five. This has become even more important for consumers during these times. Our Made in Canada positioning has always been at the core of our Canadian brands as all our brands sold in Canada are made in Canada.

During the first quarter, we also made investments behind brand specific campaigns for Bonterra, Scotties and Sponge Towels, both on TV and digital platforms to drop to drive top of mind awareness. In addition, we joined forces with Volkswagen to celebrate Earth Month in April by launching our Bonterra Driving Good Together contest. Canadian shoppers had an opportunity to win the all electric ID Buzz Microbus through the purchase of Bonterra products, our sustainability focused line. The campaign demonstrated that making environmentally conscious decisions to protect the planet can be simple and rewarding. Shifting to hockey related campaigns.

I would like to highlight that we recently completed the fifth year of our Kruger Big Assist program by committing $200,000 to five minor hockey associations across Canada. And I want to congratulate the Ontario based North Halton Girls Hockey Association for the grand prize winner in 2025. The Kruger Bug Assist program helps provide financial assistance to Canadian hockey families, removing barriers to Canada’s national game and giving more kids a chance to participate. Over the past five years, we have donated $1,000,000 to over 50 hockey communities across Canada. And finally, we implemented our in market activations with our partners, the Toronto Maple Leafs, Montreal Canadians and the NHL during the ongoing playoffs.

Let’s turn to Slide 10. The data presented is taken from Nielsen. It shows branded market share performance over a fifty two week period ending March 22 for 2025 numbers, while the data from 2021 to ’twenty four is based on fifty two week periods for those years. The numbers reflect relatively stable share both in the bathroom tissue and paper towel categories, and this was reflected as the pricing that we took in Q4 of last year. We’re also seeing some share improvements in the first quarter of this year, which will benefit our future fifty two week share going forward.

In Facial Tissue, we consolidated our leadership position in the Canadian market with a 45% share on the strength of the Scotties brand and our innovations. Looking at the Away From Home segment on Slide 11. Sales volume increased year over year in Q1 twenty twenty five but was down sequentially due to typical seasonality. Although orders remained strong during the quarter, much of the customer discussions were based on tariffs, supply, sourcing and cost. We do believe, though, that our strong business fundamentals and our customer relationships allowed us to deliver strong growth in the quarter.

Profitability decreased year over year, driven primarily by continued external purchase sales. We expect that our new LDC paper machine in Sherbrooke will meet internal requirements for paper and improve margins beginning in Q2 twenty twenty five. And finally, we intend to launch our Casimir and Scotties brands in the away from home market in June, which should become visible in key commercial settings for our common consumer. I will now turn the call over to Michael.

Michael Keys, CFO, KP Tissue and Kruger Products: Thank you, Dino, and good morning, everyone. Please turn to Slide 12 for a summary of our financial performance for the first quarter of twenty twenty five. As mentioned by Dino, we generated revenue of 546,100,000.0 and a strong adjusted EBITDA of $75,800,000 in the quarter despite a very volatile economic conditions. Net income totaled $15,400,000 in the first quarter of twenty twenty five compared to $9,000,000 in the first quarter of twenty twenty four. The year over year increase can be attributed to a higher FX gain of $9,700,000 and greater adjusted EBITDA of 8,700,000.0 These factors were partially offset by higher depreciation expense of $6,400,000 and greater interest and other finance costs of $4,600,000 In the quarterly segmented view on Slide 13, revenue from our Consumer business grew 15.1 year over year to $465,200,000 The double digit increase was mainly due to higher sales volume in both U.

S. And Canada, favorable selling prices across the segment and a positive foreign exchange impact on U. S. Dollar sales. In the Away From Home segment, revenue improved 7.7% year over year to CAD 80,900,000.0 in the first quarter, driven by higher sales volume in The U.

S, along with higher selling prices in both U. S. And Canada. The Consumer adjusted EBITDA in the first quarter totaled $76,100,000 compared to $62,600,000 in Q1 twenty twenty four, with a margin of 16.3% versus 15.5% for the same period last year. On a sequential basis, Consumer adjusted EBITDA grew 12,100,000 from Q4 twenty twenty four.

For our Away From Home business, adjusted EBITDA amounted to $2,800,000 in the first quarter compared to $7,800,000 in Q1 twenty twenty four. The AFH adjusted EBITDA decreased $5,000,000 year over year with a margin of 3.4%, while sequentially, AFH adjusted EBITDA declined $1,800,000 from Q4 twenty twenty four. As Dino mentioned, our AFH segment was unfavorably affected by external purchase paper and products, along with higher fiber prices, freight rates and onetime warehousing expenses. Moving on to Slide 14. We present our consolidated revenue for Q1 twenty twenty five, which grew $6,700,000 or 13.9% year over year.

The decrease was mainly due to higher consumer sales volume, favorable selling prices across consumer and AFH segments and a positive foreign exchange impact. On a geographic basis, revenue in Canada rose $20,400,000 or 7.6% year over year, while U. S. Revenues grew $46,300,000 or 21.7%. On Slide 15, we provide details about year over year profitability.

The The adjusted EBITDA increased by $8,700,000 to $75,800,000 in the quarter, resulting in a comparable margin between each period. Several factors account for the year over year growth in adjusted EBITDA in the first quarter, including higher sales volume, increased selling prices and lower manufacturing overhead costs. These items were partially offset by higher pulp prices, greater freight costs and warehousing costs, the impacts of tariffs and increased SG and A expenses. Of note, we estimate the impact related to the trade disruptions on our business amounted to approximately $3,000,000 in Q1 twenty twenty five. This includes direct tariff charges and supply chain disruptions.

Now let’s turn to Slide 16, where we compare Q1 revenue to Q4 twenty twenty four. Revenue increased $6,500,000 sequentially or 1.2%, primarily due to higher consumer sales volume and a positive FX impact. These factors were partially offset by lower selling prices. Geographically, revenue in Canada declined by $4,900,000 or 1.7%, while revenue in The U. S.

Grew by $11,400,000 or 4.6%. On Slide 17, our adjusted EBITDA improved sequentially by CAD 9,000,000 or 13.5% to CAD 75,800,000.0, mainly due to lower manufacturing overhead costs and increased sales volume. These factors were partially offset by increased SG and A expenses, lower selling prices as well as greater freight costs, the impact of tariffs and the higher warehousing expenses. Adjusted EBITDA margin increased 1.5 to 13.9%. Now turning to our balance sheet and financial position on Slide 18.

Our cash position reached CAD141.8 million at the end of the first quarter, an increase of CAD22.3 million from Q4 twenty twenty four. And long term debt at the quarter end stood at million, up CAD 6,200,000.0 sequentially, while net debt decreased CAD 9,300,000.0 based on a stronger cash position. Based on the lower net debt and higher adjusted EBITDA, our net debt to EBITDA ratio improved to four point zero times versus 4.2 times in Q4 twenty twenty four. Total liquidity stood at $356,800,000 at the end of the first quarter of twenty twenty five. And in addition, 4,400,000.0 of cash was held in the Sherbrooke expansion project.

I will now conclude my section by reviewing capital expenditures on Slide 19. CapEx for Q1 twenty twenty five amounted to $17,500,000 which included $15,400,000 for the Sherbrooke expansion project. Finally, we still expect our CapEx to reach 80,000,000 to $100,000,000 of spend for 2025. This outlook does include over $20,000,000 left for the completion of the Sherbrooke expansion project. Thank you for joining us this morning, and I’ll now turn the call back to Dino.

Dino Bianco, CEO, KP Tissue and Kruger Products: Thank you, Michael. Please turn to Slide twenty for an update on our sustainability focus, Reimagine 02/1930. Our sustainable development plan has been established with the belief that growing our business and protecting our planet are not mutually independent goals. Our four pillars supporting this strategy remain unchanged: products and power, planet conscious, employee impact and community embrace. Our new sustainability report will be published next month to disclose the progress achieved in 2024.

In the meantime, I wanted to share with you some early findings from the report, including a 26% reduction in GHG emissions, a 35% decrease in water consumption and 100% use of third party certified fibers in the manufacturing of our products. It should also be noted that we continue to be recognized by several organizations for our contributions as an outstanding corporate citizen. Okay. Let’s move to Slide 21 for my closing comments. We delivered strong sales growth in the first quarter, and we expect this trend will continue throughout 2025.

We are closely monitoring an uncertain trade environment while leveraging our Made in Canada positioning. We intend to manage our margins amid a changing cost base. We will continue investing in our brands to drive long term share growth. We expect our new LDC paper machine in Sherbrooke will significantly reduce our reliance on purchased paper beginning in the second quarter. And our Away From Home business should benefit from internally sourced paper with improved profitability, also rebranding the business to Kruger Pro and leveraging our brands in the market.

And we are developing our organizational capability to strengthen the adaptability and the resiliency of our employees. Finally, let’s turn to our outlook for the second quarter of twenty twenty five. We expect adjusted EBITDA to be in the range of 70,000,000 to $75,000,000 despite an uncertain and volatile economic environment. We will now be happy to take your questions.

Conference Operator: Thank you. Thank you for waiting. We now have our first question. And this comes from Amir Patel from CIBC Capital Markets. Your line is now open.

Please go ahead.

Amir Patel, Analyst, CIBC Capital Markets: Hi, good morning. Do you know any update in how you think about future growth and the timing and location of potential third TAD?

Dino Bianco, CEO, KP Tissue and Kruger Products: Yes. Great question, Amir. We announced last year that we were accelerating our analysis on that. My hope our hope was that we would have an announcement in the first half of this year. But given just all the economic uncertainty and volatility that still exists, it will more likely be in the second half of the year.

We continue to do aggressive work on this. We know the market is tight. We know, particularly in the TAD area. We’re focused on continuing to grow. So we are doing the work, lots of work being done, a couple of locations being looked at, working with customers in terms of long term plans.

I’m just not in a position yet to announce it, but our hope is that we will have something announced in the second half.

Amir Patel, Analyst, CIBC Capital Markets: Okay. Fair enough. And just given the various marketing and innovation strategies you’ve got underway, how do you see that market share gap between yourself and the number one player in Tel’s evolving as some of those improvements play out?

Dino Bianco, CEO, KP Tissue and Kruger Products: Yes. I mean it’s very tough to steal share, and you’ve got to do it the right way. And we’re trying to do it the right way, which is do it through quality and innovation and brand support. So it’s a long journey. Gaining share is a long term game for us.

And I think we’re doing a lot of the right things. And you should see a continuous progression of share gains on our end on SpongeTowel. Who it comes from, I don’t know. But I think as we continue to build the equity of that brand and the presence of that brand through distribution, we will see share growth over time. We know we have the right quality.

We know we have the credentials. We know we have Made in Canada positioning on Tal, which is somewhat unique for us. We know we have great customer support. So I think all the ingredients are there for us to continue to show good share growth on that segment.

Amir Patel, Analyst, CIBC Capital Markets: Great. Dino. That’s all I have.

Dino Bianco, CEO, KP Tissue and Kruger Products: Thank you.

Conference Operator: Thank you. And the next question comes from Kasia Kopitap from TD Cowen. Your line is now open. Please go ahead.

Kasia Kopitap, Analyst, TD Cowen: Good morning, everyone. Dino, I want to start off with AFH. In your prepared remarks, you talked about customer discussions focusing on potential tariff impact. Can you expand on that a little bit?

Dino Bianco, CEO, KP Tissue and Kruger Products: Yes. I would say more so in AFH. It’s a very diversified segment in North America. Lots of players, small to large. You’ve also got foreign players in place.

So I think the noise around tariffs and the permutations is louder there, if you will. So we’ve been working with our customer base, both in Canada and The U. S. We’ve got really great relationships. But I think there’s been a lot of discussion of the segments, the impact to Asia on tariffs and what that does, impact on finished goods and raw materials.

So I would just say there was a lot of noise. And I put it out there on purpose because it just shows a little bit of volatility. Instead of spending our time talking about how we’re going to grow the business and long term plans, we’re talking about some of the distractions here. Now having said that, I think we’ve got a great business, very strong. And when the internal paper comes in, we’ll even make it stronger.

We have great customer relationships. We’re doing the right things, obviously, Canada launching our brands. So think the business is resilient, but there is a distraction. And then while I’m talking about AFH, obviously, we’re keeping an eye on the outlook for the market. There’s a lot going on with consumer and travel and commercial.

We’re well diversified, which is great, both in Canada, U. S. And the various segments. But it is uncertainty creates concerns. So we’re getting ready to make sure that we have contingency plans in the Away From Home segment in particular as segments may change, expand or shrink and that we’re ready to take advantage of that.

Kasia Kopitap, Analyst, TD Cowen: Right. Okay. And so on that note, maybe just remind us within AFH, the different subsegments, is your broad exposure there? And I’m thinking some of them may be more segments that are more elastic in their demand versus the inelastic ones, restaurants, hospitality versus maybe, I don’t know, hospitals or schools, that kind of thing. Can you just remind us what your exposure is there?

Dino Bianco, CEO, KP Tissue and Kruger Products: Yes. I’m not going to go through subsegment. I would say in some segments, as you mentioned, the away or the restaurant business, foodservice, some of the commercial space may be a little more vulnerable to things like recessions. And then you’ve got the commercial you’ve got the health care segments, you’ve got industrial, some of those segments, which tend to be less exposed. So I think we’re well balanced.

We’re not overly developed in one particular segment. So we’re well balanced, and we’re well balanced between U. S. And Canada. And then of course, if the AFH segment declines, we have a retail segment that also benefits generally because those two tend to be offsetting each other.

So we also have a retail segment if the AFH segment declines that people will use more at home.

Kasia Kopitap, Analyst, TD Cowen: Okay. And maybe just a question for Michael, but CapEx is up a little bit, about $15,000,000 versus previous guidance. What’s the cause of time of the increase?

Michael Keys, CFO, KP Tissue and Kruger Products: Mainly the carryover on the Sherbrooke expansion project at the close of 2024 and to 2025 would be the largest piece of that increase, Cacio. Otherwise, base CapEx is still within the range we had provided at the end of Q4.

Kasia Kopitap, Analyst, TD Cowen: Got you. Okay. And there’s no the amount remaining on Sherbrooke, that’s about $25,000,000 right, Michael?

Michael Keys, CFO, KP Tissue and Kruger Products: Yes. Just below 25,000,000 yes.

Kasia Kopitap, Analyst, TD Cowen: Below 25,000,000 Okay. Got you. That’s all I had. Thanks very much.

Dino Bianco, CEO, KP Tissue and Kruger Products: Thank you.

Conference Operator: Thank you. And the next question comes from Zachary Evershed from National Bank Financial. Your line is now open. Please go ahead.

Zachary Evershed, Analyst, National Bank Financial: Good morning, everyone. Congrats on the quarter.

Dino Bianco, CEO, KP Tissue and Kruger Products: Good morning. Thank Can

Zachary Evershed, Analyst, National Bank Financial: you comment on promotional activity levels and your evaluation of the health of the consumer, maybe on both sides of the border?

Dino Bianco, CEO, KP Tissue and Kruger Products: Yes. Let me obviously, we’re closer to the Canadian one because of our brand presence. So we get and we’re a bigger player here, so can see that. There’s obviously a lot of made in Canada, made in Quebec sentiment going on. If you watch the stores, you’ll see it everywhere.

We have been made in Canada long before the made in Canada wave started in the last few months. It’s been part of our core of our businesses and the root of our brands. So we are seeing a lot more activity. And that’s why I quoted I don’t usually talk about in period share, but we’re starting to see that reflected in our Q1 shares. Whether there’s a direct correlation, it’s hard to pinpoint it exactly, but they are moving in the right direction.

And our promotional activity is strong. I think that we generally get a lot of promotional activity in our brands, but I think that’s been amplified at some retailers, in particular, even more with the Made in Canada positioning that we’ve done. U. S, it’s harder to see it. Obviously, the markets continue to be strong.

You have seen the trend over time moving more to private label, although the data we’re seeing recently has showed that stabilizing. Now we’ll see if that starts to move again in private label’s favor, if there’s a recession or inflation in the marketplace. And I think one of the big worries and we talked about this in our call, the tissue market in North America is capacity tight, if you will. So my worry, and I think any customers’ worry, is any disruptions because of tariffs or supply chain could have an immediate impact. So we’re really looking to offset that.

And we’re carrying a little more inventory right now, quite frankly, of just wanting to have a little more product available in case there are any shocks to the system. So I would say it’s a volatile market. The benefit is people need our product, which is great. They don’t always need our brands, but they need our products and hopefully need our brands or products we make for our customers in the private label space. And we’re working with all our customers kind of setting out certainly long term plans, but more now maybe focused on what do the next six, twelve months look like so that as we’re going through any potential changes, we’re there to service them.

So it’s definitely an interesting time. COVID was a different world. You didn’t know it, but you kind of it was driven by a singular activity. This one with tariffs and global trade and Canadian dollar changes and there’s collateral aspects to what’s going on, whether it be freight or ocean freight or road freight or, as I said, just recession or no recession. There’s just a lot going on.

So I think what we’re trying to do as an organization is build our resiliency and adaptability and be ready to pivot if things move one way or the other.

Zachary Evershed, Analyst, National Bank Financial: Great color. A follow-up on that stocking up at your level. Are you seeing anything down the chain as well, either at retailers or maybe in customer pantries?

Dino Bianco, CEO, KP Tissue and Kruger Products: I would say no. I would say no. There’s not a concern in the market nor am I trying to indicate that there will be that there’s a supply issue. I think we’re ready just in case the supply chain shock that not at the consumer level, at the supply chain side. I don’t I would not say that there’s pantry loading.

I would not say that customers are loading. We’re seeing buying behavior that is strong but not unlike what we saw, obviously, during COVID where there was pantry loading. We’re not seeing that.

Zachary Evershed, Analyst, National Bank Financial: Thank you very much. I’ll turn

Conference Operator: it over. Thank you. It seems like there are no further questions that came through. I will now turn the call over back to Dino Bianco. Please go ahead, sir.

Dino Bianco, CEO, KP Tissue and Kruger Products: Thank you all for joining us on this call today. We look forward to speaking with you again following the release of our second quarter results for 2025. As a reminder, on June 23 at two p. M. Eastern Time, we will be hosting our virtual only annual meeting of shareholders.

Your vote and participation at the annual meeting are important to us. I want to thank everybody for joining us today, and have a great day. We’ll see you in a few months. Thank you.

Conference Operator: Thank you. This concludes our conference call for today. Thank you all for participating. You may now disconnect.

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