WINNIPEG, MB, July 24, 2025 /CNW/ – Winpak Ltd. (WPK) today reports consolidated results in US dollars for the second quarter of 2025, which ended on June 29, 2025. Quarter EndedYear-To-Date EndedJune 29June 30June 29June 302025202420252024(thousands of US dollars, except per share amounts)Revenue272,800283,496557,602560,279Net income29,93939,01964,38474,794Income tax expense10,47414,98123,32328,628Net finance income(2,680)(5,932)(5,440)(12,106)Depreciation and amortization13,35413,04726,92425,700EBITDA (1)51,08761,115109,191117,016Net income attributable to equity holders of the Company30,20538,82564,78174,347Net (loss) income attributable to non-controlling interests(266)194(397)447Net income29,93939,01964,38474,794Basic and diluted earnings per share (cents)4961105116Winpak Ltd. manufactures and distributes high-quality packaging materials and related packaging machines. The Company’s products are used primarily for the packaging of perishable foods, beverages and in healthcare applications.1 EBITDA is not a recognized measure under IFRS Accounting Standards (IFRS). Management believes that in addition to net income, this measure provides useful supplemental information to investors including an indication of cash available for distribution prior to debt service, capital expenditures, payment of lease liabilities and income taxes. Investors should be cautioned, however, that this measure should not be construed as an alternative to net income, determined in accordance with IFRS, as an indicator of the Company’s performance. The Company’s method of calculating this measure may differ from other companies and, accordingly, the results may not be comparable.(presented in US dollars)Forward-looking statements: Certain statements made in the following Management’s Discussion and Analysis contain forward-looking statements including, but not limited to, statements concerning possible or assumed future results of operations of the Company. Forward-looking statements represent the Company’s intentions, plans, expectations and beliefs, and are not guarantees of future performance. Such forward-looking statements represent Winpak’s current views based on information as at the date of this report. They involve risks, uncertainties and assumptions and the Company’s actual results could differ, which in some cases may be material, from those anticipated in these forward-looking statements. Factors that could cause results to differ from those expected include, but are not limited to: the terms, availability and costs of acquiring raw materials and the ability to pass on price increases to customers; ability to negotiate contracts with new customers or renew existing customer contracts with less favorable terms; timely response to changes in customer product needs and market acceptance of our products; the potential loss of business or increased costs due to customer or vendor consolidation; competitive pressures, including new product development; industry capacity, and changes in competitors’ pricing; ability to maintain or increase productivity levels; ability to contain or reduce costs; foreign currency exchange rate fluctuations; changes in governmental regulations, including environmental, health and safety; changes in Canadian and foreign tariff rates; changes in Canadian and foreign income tax rates, income tax laws and regulations. Unless otherwise required by applicable securities law, Winpak disclaims any intention or obligation to publicly update or revise this information, whether as a result of new information, future events or otherwise. The Company cautions investors not to place undue reliance upon forward-looking statements. Financial PerformanceNet income attributable to equity holders of the Company (Earnings) for the second quarter of 2025 of $30.2 million declined by 22.2 percent from the $38.8 million recorded in the corresponding quarter in 2024. The deterioration in gross profit was a key factor, lowering Earnings by $6.6 million. In addition, net finance income led to a contraction in Earnings of $2.4 million. Furthermore, operating expenses subtracted $2.1 million from Earnings. Conversely, foreign exchange elevated Earnings by $2.3 million. In combination, all other factors raised Earnings by $0.2 million.For the six months ended June 29, 2025, Earnings amounted to $64.8 million, a decrease of 12.9 percent compared to the 2024 first half result of $74.3 million. The sizeable contraction in gross profit reduced Earnings by $6.5 million. Additionally, net finance income dampened Earnings by $4.9 million. Earnings declined by $1.9 million due to higher operating expenses. Foreign exchange added $2.1 million to Earnings. In total, all remaining items boosted Earnings by $1.7 million.Operating Segments and Product GroupsThe Company provides three distinct types of packaging technologies: a) flexible packaging, b) rigid packaging and flexible lidding and c) packaging machinery. Each is deemed to be a separate operating segment.The flexible packaging segment includes the modified atmosphere packaging, specialty films and biaxially oriented nylon product groups. Modified atmosphere packaging extends the shelf life of perishable foods, while at the same time maintains or improves the quality of the product. The packaging is used for a wide range of markets and applications, including fresh and processed meats, poultry, cheese, medical device packaging, high performance pouch applications and high-barrier films for converting applications. Specialty films include a full line of barrier and non-barrier films which are ideal for converting applications such as printing, laminating and bag making, including shrink bags. Biaxially oriented nylon film is stretched by length and width to add stability for further conversion using printing, metalizing or laminating processes and is ideal for food packaging applications such as cheese, fluid and viscous liquids, and industrial applications such as book covers and balloons.The rigid packaging and flexible lidding segment includes the rigid containers, lidding and specialized printed packaging product groups. Rigid containers include portion control and single-serve containers, as well as plastic sheet, custom and retort trays, which are used for applications such as food, pet food, beverage, dairy, industrial and healthcare. Lidding products are available in die-cut, daisy chain and rollstock formats and are used for applications such as food, dairy, beverage, pet food, industrial and healthcare. Specialized printed packaging provides packaging solutions to the pharmaceutical, healthcare, nutraceutical, cosmetic and personal care markets.Packaging machinery includes a full line of horizontal fill/seal machines for preformed containers and vertical form/fill/seal pouch machines for pumpable liquid and semi-liquid products and certain dry products. RevenueRevenue in the second quarter of 2025 was $272.8 million, $10.7 million or 3.8 percent less than the second quarter of 2024. Volumes receded by 3.1 percent when compared to the second quarter of 2024. Muted customer demand within certain product categories contributed to the result. No significant customer loss has been experienced thus far in 2025. The flexible packaging operating segment recorded an expansion in volumes of 4 percent. Volume growth of 5 percent was attained by the modified atmosphere packaging product group, reflecting healthy gains with meat and dairy applications. Within the rigid packaging and flexible lidding operating segment, volumes dropped by 10 percent. The rigid container product group experienced an 8 percent decline in volumes stemming from lower snack food and juice container shipments. For the lidding product group, volumes fell by 10 percent because of weaker specialty beverage and retort pet food activity. Packaging machinery volumes decreased by 23 percent as a greater number of machines were delivered to customers in the second quarter of 2024. In the current year, several customers withheld order placement due to economic uncertainty. Selling price and mix changes had a negative effect on revenue of $1.0 million. Foreign exchange lowered revenue by an additional $0.7 million.For the first six months of 2025, revenue fell by 0.5 percent to $557.6 million from $560.3 million in the comparable prior year period. Volumes were virtually unchanged. Within the flexible packaging operating segment, volume gains amounted to 4 percent. For the modified atmosphere packaging product group, solid volume growth of 6 percent reflected the inroads made with meat and dairy accounts. Biaxially oriented nylon product group volumes retreated by 8 percent as machine operating performance negatively impacted available capacity. The rigid packaging and flexible lidding operating segment’s volumes narrowed by 5 percent. Rigid container volumes decreased by 3 percent due to a reduction in snack food, applesauce and juice container shipments. For the lidding product group, volumes declined by 8 percent. The contraction in specialty beverage and applesauce lidding volumes accounted for the negative variance. Packaging machinery volumes recorded a modest downturn of 3 percent. Selling price and mix changes raised revenue by 0.4 percent while foreign exchange lowered revenue by 0.6 percent.Gross Profit MarginsGross profit margins in the current quarter of 29.4 percent of revenue declined by 3.1 percentage points from the 2024 second quarter result of 32.5 percent of revenue. Raw material cost reductions were accompanied by a similar magnitude of selling price decreases, which included concessions stemming from heightened competitive pressures in the modified atmosphere packaging market. The Company’s cost structure was adversely affected by higher personnel and quality related expenses. Personnel expenses included an aggregate of $2.3 million in one-time payments made to every employee to commemorate the 50th anniversary of Winpak’s incorporation. Additionally, elevated production waste and diminished output levels increased the effective cost of production.Gross profit margins in the first six months of 2025 contracted by 1.5 percentage points to 30.3 percent of revenue from the 31.8 percent recorded in the 2024 year-to-date comparative period. Higher selling prices, resulting from the change in product mix, combined with a decline in raw material costs, raised Earnings by $5.5 million. Other factors combined to reduce Earnings by $12.0 million, the most notable were production waste and expenses related to inventory disposals on account of quality issues. Also influential were the one-time employee payments and the substantial accumulation of finished goods inventories in the prior year which lowered the overall cost of production in that year.During the second quarter of 2025, the raw material purchase price index was unchanged compared to the first quarter of 2025. Polypropylene resin increased by 5 percent while nylon resin experienced a decrease of 7 percent. Over the past 12 months, the index dropped by 6 percent. Expenses and OtherOperating expenses in the second quarter of 2025, exclusive of foreign exchange, progressed at a rate of 3.7 percent whereas sales volumes decreased by 3.1 percent, resulting in a reduction in Earnings of $2.1 million. One-time employee payments amounted to $0.8 million. Furthermore, the continued inflationary impact on personnel expenses was unfavorable. Foreign exchange had a positive effect on Earnings of $2.3 million due to the favorable translation differences recorded on the revaluation of monetary assets and liabilities in comparison to the unfavorable translation differences recorded in the same quarter in 2024. Net finance income dampened Earnings by $2.4 million as the magnitude of cash invested in short-term deposits and money market accounts was much lower than a year earlier. The lower balance was largely a result of the share buyback program as well as the special dividend paid in early 2025.On a year-to-date basis, operating expenses, adjusted for foreign exchange, advanced at a rate of 2.8 percent in comparison to the 0.3 percent reduction in sales volumes, thereby having an unfavorable impact on Earnings of $1.9 million. This was attributed to the rise in personnel expenses. Foreign exchange elevated Earnings by $2.1 million. The positive translation differences recorded on the revaluation of monetary assets and liabilities denominated in Canadian dollars was in contrast to the negative translation differences recorded in the first six months of 2024. Due to the substantial decrease in the balance of cash invested in short-term deposits and money market accounts, net finance income tempered Earnings by $4.9 million. Capital Resources, Cash Flow and LiquidityOn March 24, 2025, the Toronto Stock Exchange (the « TSX ») accepted a notice filed by Winpak of its intention to renew its normal course issuer bid (the « NCIB ») with respect to its outstanding common shares. The notice provided that Winpak may, during the 12-month period commencing March 26, 2025 and ending no later than March 25, 2026, purchase through the facilities of the TSX and other alternative Canadian trading systems up to a maximum of 3,087,500 common shares in total, being 5.0 percent of the issued and outstanding shares of Winpak as of March 18, 2025. The price which Winpak will pay for any common shares will be the market price at the time of acquisition. Daily purchases under the NCIB will be generally limited to 13,761 common shares, other than block purchases. All shares purchased will be canceled. In connection with the NCIB, Winpak has entered into an automatic share purchase plan with CIBC World Markets Inc. to facilitate the purchase of common shares under the NCIB, including at times when Winpak would ordinarily not be permitted to purchase its common shares due to regulatory restrictions or self-imposed blackout periods. As at June 29, 2025, the Company had purchased 235,649 common shares under its current NCIB.The Company’s cash and cash equivalents balance ended the second quarter of 2025 at $356.0 million, a decrease of $0.4 million from the end of the prior quarter. Winpak generated strong cash flows from operating activities before changes in working capital of $50.8 million. The net investment in working capital increased by $1.9 million. In order to limit the impact of potential, upcoming tariffs, the Company continued to accumulate inventories within the United States. Cash was used for property, plant and equipment additions of $26.5 million, income tax payments of $15.9 million, common share repurchases of $5.5 million, dividend payments of $2.2 million and other items totaling $1.9 million. Net finance income provided cash of $2.7 million. For the first half of 2025, the cash and cash equivalents balance declined by $141.2 million. Cash flows generated from operating activities before changes in working capital were solid at $109.2 million. Working capital consumed $21.7 million in cash. The $20.3 million build up of inventories was largely due to the measures taken since early 2025 to minimize the effect of cross-border import tariffs. Cash outflows included: dividend payments of $135.4 million (including special dividend of $131.1 million), property, plant and equipment expenditures of $45.9 million, income tax payments of $30.9 million, common share repurchases of $19.2 million and other items amounting to $2.5 million. Net finance income produced incremental cash of $5.2 million. Summary of Quarterly ResultsThousands of US dollars, except per share amounts (US cents)Q2Q1Q4Q3Q2Q1Q4Q320252025202420242024202420232023Revenue272,800284,802285,143285,473283,496276,783275,637273,790Net income attributable to equity holdersof the Company30,20534,57636,62238,48638,82535,52234,84633,991EPS4956586161555452Looking ForwardDespite the challenges and uncertainties relating to the current trade environment, Winpak remains optimistic about the profitability level for the second half of the year. However, modifications to the currently enacted tariffs could have a sizeable impact on the Company’s growth aspirations and manufacturing costs.With the exception of foil-based products, the Company’s entire product portfolio is presently exempt from tariffs under the United States-Mexico-Canada Agreement (USMCA). Furthermore, nearly all raw materials sourced within North America are exempt from tariffs. The Company has implemented and will continue to implement an assortment of counter measures to minimize the impact of tariffs in both the short and long-term. In addition, the Company is reevaluating the overall strategic roadmap in order to augment its resilience to a more protectionist trade environment. For the balance of 2025, onboarding new business opportunities will be the key to achieving sales volume growth. Recently added extrusion capacity within the modified atmosphere packaging facility will continue to be a key contributor, targeting the dairy market. In addition, the initiation of recently awarded pet food and healthcare business will expand volumes. Based on the preceding factors, sales volume growth for the remainder of 2025 should reflect a modest improvement over relatively flat volume growth posted for the first half of 2025.Raw material costs have moved within a narrow range over the past six months. Market expectations are that overall resin and foil prices will be relatively stable for the balance of the year. The Company is optimistic that the majority of the foil import tariffs will be passed along to customers. Going forward, the additional manufacturing costs relating to waste and quality should be curtailed significantly. Winpak expects gross profit margins for the second half of 2025 to be within the range of 30 to 32 percent.Capital expenditures of approximately $100 to $110 million are forecast for 2025, highlighted by the completion of the extensive expansion of the Winnipeg, Manitoba modified atmosphere packaging facility. Concurrently, Winpak will assess prospective acquisition opportunities that align strategically with the Company’s core strengths, especially those that are focused on medical and pharmaceutical applications. Winpak Ltd. Interim Condensed Consolidated Financial Statements Second Quarter Ended: June 29, 2025These interim condensed consolidated financial statements have not been audited or reviewed by the Company’s independent external auditors, KPMG LLP. For a complete set of notes to the condensed consolidated financial statements, refer to www.sedar.com or the Company’s website, www.winpak.com.Winpak Ltd.Full story available on Benzinga.com
Winpak Ltd., une entreprise phare dans le domaine des matériaux d’emballage de haute qualité, a récemment dévoilé ses résultats du deuxième trimestre 2025, marqués par une baisse notable des revenus. Cette période de reporting se révèle cruciale pour comprendre les dynamiques du marché de l’emballage, notamment dans le contexte économique actuel complexe. Alors que Winpak navigue dans un environnement concurrentiel en mutation rapide, il est essentiel de déchiffrer les implications sous-jacentes de ces résultats financiers, tout en explorant les perspectives d’avenir pour l’entreprise et le secteur.
Analyse des performances financières de Winpak pour le deuxième trimestre 2025
Les résultats du deuxième trimestre 2025 illustrent une diminution de 3,8 % des revenus de Winpak, atteignant 272,8 millions de dollars américains par rapport à l’année précédente. Cette baisse peut être attribuée à un recul des volumes de vente de 3,1 %, influencé par une demande client modérée dans certaines catégories de produits. Bien que l’entreprise n’ait pas perdu de clients significatifs, la pression sur les prix de vente et une légère contraction du marché ont pesé sur la performance globale.
En scrutant les segments opérationnels, la division de l’emballage flexible a progressé avec une hausse de volume de 4 %, autrefois compensée par un déclin dans l’emballage rigide et le couvercle flexible de 10 %. Cette situation résulte principalement de la chute des expéditions de contenants alimentaires et de boissons non alcoolisées. De plus, le segment des machines d’emballage a enregistré une baisse de 23 % en raison de retards dans les commandes liés à l’incertitude économique.
Les défis de la marge brute et les stratégies d’atténuation
Les marges de profit brut ont subi une contraction, passant de 32,5 % à 29,4 % des revenus. Cette détérioration s’explique par une diminution synchronisée des coûts des matières premières et des prix de vente, souvent forcée par la concurrence accrue sur le marché de l’emballage sous atmosphère modifiée. Les dépenses accrues en personnel, partiellement dues à des paiements uniques commémorant le 50ème anniversaire de la société, ont également alourdi la structure des coûts.
Pour pallier ces défis, Winpak mise sur des stratégies de réduction des coûts et l’optimisation de sa chaîne d’approvisionnement. La société a identifié des opportunités pour traduire les tarifs à l’importation du papier d’aluminium en hausses de prix pour les clients, dans le but de préserver les marges bénéficiaires.
Des perspectives prometteuses malgré l’incertitude économique
En dépit d’une première moitié d’année 2025 marquée par la stagnation des volumes de vente, Winpak entrevoit une amélioration modeste grâce à l’exploitation continue de nouvelles capacités d’extrusion au sein de son installation dédiée à l’emballage sous atmosphère modifiée. Cette initiative a déjà stimulé une croissance notable dans les secteurs des viandes et des produits laitiers.
À court terme, la stabilité des coûts des matières premières, notamment des résines, soutiendra les efforts de l’entreprise pour rétablir ses marges de profit brut entre 30 et 32 %. L’entreprise se concentre sur le développement de nouvelles opportunités commerciales, surtout dans le marché du pet food et des soins de santé, afin de diversifier ses sources de revenus et d’accroître sa résilience face à l’incertitude économique.
Impact géopolitique et stratégies d’avenir
Les conditions géopolitiques actuelles ajoutent une couche supplémentaire de complexité au secteur de l’emballage, en particulier avec les modifications potentielles des tarifs sous l’Accord États-Unis-Mexique-Canada (USMCA). Winpak est en bonne position grâce à l’exemption de ses produits de base des tarifs douaniers américains. Cela offre une certaine visibilité et protection contre les perturbations commerciales qui pourraient autrement influencer les coûts de production et les stratégies d’acquisition de matières premières.
Pour renforcer sa position sur le marché, Winpak envisage des acquisitions stratégiques concentrées sur les applications médicales et pharmaceutiques, alignées avec ses compétences principales. Les prévisions de dépenses en capital se chiffrent entre 100 à 110 millions de dollars pour l’année 2025, soulignant l’engagement de l’entreprise dans l’expansion de ses capacités.
Synthèse et aperçu des tendances
Winpak fait face à des défis importants dans l’environnement économique actuel avec des résultats financiers qui soulignent la nécessité d’adaptabilité et de réactivité. L’entreprise continue d’investir dans son développement technologique et d’explorer des avenues de croissance sur des marchés complémentaires. Dans un paysage économique global en constante évolution, ces stratégies s’avèrent essentielles pour maintenir un avantage concurrentiel durable. Alors que nous nous avançons vers la fin de l’année, les ajustements apportés aux politiques tarifaires et à la demande des consommateurs détermineront en grande partie la trajectoire future de Winpak et sa capacité à conserver ses marges et à croître sur de nouveaux segments de marché.
Source : Benzinga
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