Transcontinental Inc

TSX:TCL.A

Earnings Call Transcript 2021-Q4

[Operator]

[Foreign Language] Welcome to the TC Transcontinental Fourth Quarter and Fiscal 2021 Results Conference Call. [Operator Instructions] As a reminder, this conference is recorded today, December 9, 2021.I'd like to turn the conference over to Yan Lapointe, Director, Investor Relations. Mr. Lapointe, Please go ahead.

[Yan Lapointe, Director of Investor Relations]

Thank you, Yvette. Good afternoon, everyone, on the line, and thank you for joining us on the call. Welcome to TC Transcontinental's fourth quarter and fiscal year 2021 results conference call. You can find the press release, the presentation and the annual MD&A with complete financial statements and related notes on our website at tc.tc under our Investor Relations section. A replay of this conference call will also be available on our website after the call.We have with us today, our President and Chief Executive Officer, Francois Olivier; and our Chief Financial Officer, Donald LeCavalier. We also have with us Peter Brues who will succeed Francois and will officially assume his position of President and Chief Executive Officer tomorrow. Peter will also say a few words after Francois' remarks.Before I turn the call over to management, I would like to specify that this conference call is intended for the financial community. Media are in listen-only mode and should contact Nathalie St-Jean, Senior Advisor, Corporate Communications, for more information or interview requests.Please be reminded that some of the financial measures discussed over the course of this conference call are non IFRS. You can refer to the MD&A for complete definition and reconciliation of such measures to IFRS.In addition, the conference call might also contain forward-looking statements. These statements are based on the current expectations of management and information available as of today, and may involve numerous risks and uncertainties, known and unknown. The risks, uncertainties and other factors that could influence actual results are described in the fiscal 2021 annual MD&A and in related annual information form.With that, I would now like to turn the call over to our President and CEO, Francois Olivier.

[Francois Olivier]

Thank you, Yan, and good afternoon, everyone. This is a special day for me, as this is my 56th and last quarterly earnings call as President and CEO of TC Transcontinental. Working with Peter and the management team on the transition over the last couple of months has made me reflect on the strong and resilient company we have built, our agility and the success of our transformation. We have stood the test of time overcoming challenges and adapting to major changes in our environment and in our business.When I became the CEO in 2008, almost 80% of our revenues came from our Canadian operations, with the balance coming from our Printing operations in the U.S. and in Mexico. Our Media sector represented close to $700 million in revenue, and a significant portion of this came from publishing magazines and newspaper, which were dependent on advertising revenue.A lot has changed since then. Today, we are a very different and diversified company, with most of our sectors, who were facing headwinds 10 years ago, today, the large majority of our revenue comes from businesses with favorable prospects. While we continue to have a North American focus, we now have operations in 8 countries with half of our revenue generated outside of Canada.TC Transcontinental has transformed from being a Canadian company to an international organization that is more resilient than ever, whether it be to economic shock or technological change. The results we released today reflect this resilience.Our 2021 performance shows that our business is solid. When excluding external factors like the Canadian Wage Subsidy, the price of resin and the exchange rate, we delivered a much higher consolidated EBITDA than last year. In Packaging, we saw an unprecedented rise in resin prices. Almost every single month saw a new increase. In addition, the Canadian dollar declined versus the U.S. dollar, making the comparison with 2020 much harder.But we stayed focused on what we could control. We worked diligently to pass through the higher resin prices as per our contractual agreements to minimize the negative impact. Looking at fiscal year 2021 as a whole, when excluding the impact of high resin prices and the additional week, we delivered an organic revenue growth close to 2% and an EBITDA margin of over 16%, which is in line with what we have set at the beginning of the year.In Printing, we suddenly lost close to half of our revenues in March of 2020 when governments put in place measures to limit the spread of COVID-19. Despite the continued impact of restrictions on our customers, our revenues gradually began to recover. In fiscal year 2021, our revenues grew despite the fact that we faced tough pre-COVID comparable for the first 5 months. As we continued to improve our efficiency and benefited from higher volume, we delivered an adjusted EBITDA margin of 21.3%, excluding the Canadian Emergency Wage Subsidy. That's an improvement of 120 basis points over fiscal year 2020 and 130 points over fiscal 2019.How did we achieve this resilience? Our decision to move into flexible packaging over 7 years ago proved to be the right one. We started slowly, taking the time necessary to build our industry knowledge, build our team, while delivering great value to our customers. And then in 2018, we took a big leap with our acquisition of Coveris Americas, a pivotal moment for our company. And again, we took the time necessary to stabilize the business, increase margins by delivering on our synergies, and now we are seeing the results.As we continue to make acquisitions and grow organically through innovation by developing sustainable solutions for our customer, the percentage of revenue coming from a stable sector like flexible packaging will continue to rise, and this will serve to protect us in times of economic challenges.By continuing to generate strong free cash flow in the long term, our Printing sector will participate in our growth and play a key role in our future. Here's why. We have seen another transformation in our Printing sector portfolio. 13 years ago, newspapers, magazines and catalog printing represented a significant part of our revenue. Today, following the secular decline in those industry and our strategic portfolio management, only 15% of our Printing revenue come from these markets. Over the years, we successfully adapted our Printing platform to the market and improved our cost base.We also offset some of the lost revenue by expanding into new verticals like in-store marketing. We grew the in-store marketing business from about $12 million in revenue 10 years ago to run rate of around $200 million to date. And this is only the beginning of our ISM journey as we have a long way to go and to grow. When we include other growing activities like book, free media and also factoring our growing media revenue, these growth activities represent today around 35% of the combined revenue of our Printing and Media sectors. That percentage has increased significantly over the last 5 years, and we expect that it will continue to do so organically and through acquisitions. As they grow, this activity helps stabilize Print's overall revenues by offsetting the decline of other activities. Print is actually undergoing a similar successful transformation as TC Transcontinental went through with its move into flexible packaging.Finally, another important strategic shift has been in our Media sector. Over the last several years, we sold almost all of the publishing assets to retain only those related to education and to the construction industry, markets that are not dependent on advertising revenue. And these have proven to be not only resilient, but growing as well.I am proud that we have successfully transformed TC Transcontinental in each of our key sectors and I'm equally proud that we did so, while maintaining a strong balance sheet. While we always used leverage prudently, we were not afraid to take calculated risks when opportunities showed up. For example, we invested over $800 million 13 years ago to build a state-of-the-art national print platform, a key strategic move that led to our successful consolidation of the Canadian print market. The success we have today in our Print sector is in part a direct result of these investments.We were not afraid to do it again in 2018 when we acquired Coveris Americas for $1.7 billion, another key strategic move to cement our move into flexible packaging. We then successfully integrated the acquisition and delivered on the planned synergies and on our margin improvement objectives. And each time, we used our strong and stable cash flow from operations to bring the debt level back below 2x in order to be ready for the next opportunity. This sound financial management is another one of our strengths. We can do this again, given the opportunity.I am leaving today very proud of what we have accomplished as a team. Simply, we did what we said we would do. We transformed the company by divesting assets in declining markets and entered the flexible packaging space. We also built a strong Printing sector with solid profitability and growth potential in a significant portion of its portfolio.I am confident that TC Transcontinental has a bright future for 3 simple reasons. First, our strategy are sound and have put us in a leading position in the 3 sectors we operate in. Second, our solid financial position give us the means to achieve our ambitions. It allow us to continue to invest and transform our Print and Media portfolio and to grow our flexible packaging platform, while delivering on our sustainability objectives. And third, we have an experienced and talented team with Peter, a great successor lined up, the right person for the job. Unified by strong corporate culture, the team is working together with a common long-term vision.Finally, I'd like to thank our employees for the many years of hard work and dedication, the customer for their confidence, the Board of Director and the Marcoux family for their guidance, trust and support over the year, and finally, you, our analysts and investors for a productive relationship over the years. As a credit to you, many of your problem questions have helped us refine our thinking. Your feedback and advice over the years has been much appreciated.With that, I'll turn it over to Peter.

[H. Peter Brues, President, CEO & Director]

Thank you, Francois. Since joining the Board in 2018, I had the opportunity to watch TC develop from Canada's Print leader, complemented by a solid specialty Media group into a business that is balanced by a strong Packaging operation. Spending time with Mr. Marcoux, Isabelle and Francois, I appreciate the effort and passion that has created a successful business, driven by a strong culture and entrepreneurial spirit.Over my first 6 weeks, I worked closely with Isabelle and Francois to ensure a smooth transition. I appreciate that Francois and the team positioned us to successfully transition the business' leadership by focusing on finishing the year strongly. This gave me the opportunity to spend my first weeks meeting and listening to coworkers and customers. Having had one-on-one meetings with over 70 coworkers, I can confirm the quality of the team. Our coworkers are smart, hard-working, good people who exemplify TCs values and who are determined to win. Having had the opportunity to meet many customers, I'm convinced that the team has established strong relationships. Our customers appreciate that TC is an organization that is committed to supporting their success.Francois should be extremely proud of the team he has led and the business they have built. The investments in people, innovation and capital has positioned us to be the leader in all our sectors. So to conclude, I appreciate the trust that the Marcoux family and the Board have placed in me. I've loved my first 6 weeks. And as I take on the role as CEO, I'm excited by the opportunity to work with the team and build an even stronger business.And now I'll hand it over to Donald.

[Donald LeCavalier, Chief Financial Officer]

Thank you, Peter, and welcome. On behalf of the management team and I, let me take a moment to thank you, Francois, for your many years of leadership and dedication to our customers, employees and investors. I know I speak for all of us when I say that we will miss you and wish you all the best.Now turning to our results. In terms of numbers for the fourth quarter on Slide 6, we reported an increase in revenue of $120 million or 18.3% versus last year. This was driven by higher pricing in Packaging following our diligent pass-through of higher resin costs to our customers, our organic growth in Packaging and Print and by the acquisition of BGI Retail in our Print sector.This year, the fourth quarter also included an additional week. Excluding the extra week, both the Print and Packaging sectors recorded solid volume growth. As expected, the revenue growth was partially offset by a negative currency impact of $16 million, mainly in Packaging due to the rise in value of the Canadian dollar versus the U.S. dollar.On the profitability front, EBITDA was negatively impacted by the 3 factors as last quarter, but to a lesser extent. First, we received a much lower Canadian Wage Subsidy this year. We received $3.7 million this quarter versus $14.5 million for the same quarter last year; second, short-term contractual lags in passing through higher resin prices to our customers; and third, the stronger Canadian dollar. In total, these 3 factors impacted EBITDA by more than $20 million in Q4. We were able to offset most of these headwinds with strong operational performance, higher volume and with the extra week to deliver an adjusted EBITDA of $140.5 million for the quarter. Considering the business context in which we operate in, inflation, labor shortage and supply chain issues, this was a strong performance.Financial expenses increased slightly following currency gain recorded last year and also due to the extra week this year. The tax rate was at 23.7% in the fourth quarter, in line with our mid-20s guidance, leading to adjusted net earnings of $0.81 per share for the quarter.Now moving to Slide 7 for the sector review. In our Packaging sector, in the fourth quarter, we recorded organic revenue growth of $88.1 million. This was mainly due to the pass-through of higher resin prices, but also included the positive impact of having an extra week and volume growth of more than 2%. I highlight the strong performance of our Advanced Coatings Group during the quarter. Going forward, this Group should also benefit from the recent acquisition of H.S. Crocker as one of its 2 plants is specialized in labels for the pharmaceutical industry, in addition to the launch of the total medical product portfolio.We also continue to see solid performance from the rest of our Packaging groups. Exchange rates, mainly the strong Canadian dollar, had a negative impact of $40.9 million, leading to Packaging revenues of $417.4 million in the fourth quarter.Moving to profitability, as resin prices were still increasing in the spring and summer, we still had a negative impact in the quarter from the lag in passing through price increases, although lower than what we saw in the last 2 quarters. Despite this impact, we were able to deliver an EBITDA of $57.9 million. The latter was in line with last year due to good operational performance, volume growth and the additional week. Considering that it included over 300 basis points of negative resin price impact cost by the lag in pass-through and dilution caused by related increase in revenues, we were also pleased with the EBITDA margin of 13.9% for the quarter. Excluding the impact of resin prices, Packaging margins would have been higher than last year.On Slide 8, you can see that our Printing sector had another very strong quarter with 14.4% of organic growth versus Q4 last year. The extra week was a contributor, but excluding its impact, we also saw strong business recovery with marketing growth in the mid-single-digits. It was especially high in our growth activities like in-store marketing and book printing, where we saw double-digit growth. This growth was driven by existing customers spending more and by new customers. Revenues in the quarter were also positively impacted by the acquisition of BGI Retail in the in-store marketing space.As Francois mentioned earlier, our Print portfolio is changing and a larger part of its revenues is coming from growth activities, both organically and through acquisitions. Printing adjusted EBITDA for the quarter was $81.1 million compared to $79.5 million in Q4 2020. This is a solid performance when we consider that the Wage Subsidy was $9 million lower than last year, a demonstration of our efficient operational performance. Excluding the Wage Subsidy, adjusted EBITDA margin in Print for the quarter was at 23.3%, in line with last year. On a full year basis, it was 21.3% compared to 20.1% last year, a 120 basis point improvement.In our Media business, you may recall that seasonally Media was more pronounced in Q4 last year. This year was back to a more normal level with approximately 38% of its annual revenues in the fourth quarter. On a full year basis, the Media sector had another excellent year with close to 10% revenue and EBITDA growth when excluding the subsidy received in 2020.Corporate expenses were higher than last year, mainly due to a stock-based compensation and nonrecurring costs that included the extra week and our vaccination clinics.Turning to cash flow from operating activities, we generated $92.7 million in the quarter. The variation with last year is mostly due to higher inventory, which continues to be impacted by resin prices. As we indicated last quarter, we continued to increase our investment in CapEx with a total spend of close to $34 million in the quarter, bringing us to $138 million for the year. These investments will position us well to capture growth opportunities and will help us meet our 2025 sustainability objectives.Finally, we distributed $19.6 million in dividends. Despite the investments we made during the quarter, we continue to maintain a very strong financial position with over $660 million of available liquidity at the end of the quarter. In conclusion, overall, we delivered an excellent quarter and ended the fiscal year strong.As for the outlook, in Packaging, following the investments we made in new equipment, the signing of new customer contracts and the introduction of new products to market, we expect to generate organic growth for 2022, excluding the impact of resin prices and the 53rd week of 2021. As for profitability, we expect to grow Packaging EBITDA in fiscal year 2022. Assuming no major resin price increases, the negative impacts from the lag in resin pass-through we experienced this year are not expected to reoccur. Resin will, however, still have an effect on margin percentage due to the higher revenues. This being said, the strong efficiency gains we made during the year across all our sectors will stay with us and should reflect it in our profitability.In Print, we expect volumes to continue to recover. We also expect to see growth in our in-store marketing, both Printing and other growth activities. This gave us confidence that we should see higher revenues in fiscal 2022, while excluding the extra week of 2021. In terms of profitability, we don't expect to receive any wage subsidies in fiscal 2022, but we expect volume growth in Print to act as a partial offset to that. Therefore, excluding the impacts of the subsidy and the additional week in 2021, we expect growth in adjusted EBITDA for fiscal year 2022.Corporate costs at the EBITDA level should be around $40 million for the year. In terms of the use of cash for the year, we will continue to pursue potential acquisitions and invest in our future through our CapEx program. To that end, depending on the timing of potential key investments, CapEx in fiscal year 2022 is likely to be similar to 2021. Our tax rate should continue to be in the mid-20s. And as for cash taxes, we estimate around $60 million for the year.On that note, we will now proceed with the question period.

[Operator]

[Foreign Language] [Operator Instructions] Your first question comes from Mark Neville from Scotiabank.

[Mark Neville, Analyst]

First off, Francois, congratulations and best of luck and Peter, congratulations as well. Maybe my first question, just on pricing within Packaging. At this point, have you sort of fully caught up on your pricing adjustments? If not, sort of how far maybe behind and so when can we sort of expect before you caught up?

[Francois Olivier]

Yes. We're almost there, just a couple of more months. As you know, most of them is about a 2 to 3-month lag. And we had a few at 6 that are longer to [ caught ] up, but they're not meaningful. So I would say, 1 or 2 more months, and we have seen in certain grade of resin, price decrease. So it should, in some area, stabilize and even for certain resin, like I said, turn the other way. So a month or 2, but each month is a lot less, Mark, because we are at the end of the line.

[Mark Neville, Analyst]

Got it. In terms of the outlook for 2020, just trying to, I guess, estimate sort of baseline, again, you're sort of excluding shoes and a few other things, you're expecting growth. But I guess my question within Print is sort of the 21.3% margin, the number to think about growing off of, on whatever the sales might be and then I guess the same question of impact, again, just trying to find a baseline for EBITDA or EBIT sort of exiting out all these one-time items.

[H. Peter Brues, President, CEO & Director]

Mark, on the margin, obviously, we're very proud of the 21.3% that we delivered in fiscal 2021. And I think it's our best margin and going back to 2017, if I'm not wrong. And we said for many years, the intention with Print is to protect the 20% margin and to produce a lot of free cash flow. So this is the direction we're going. Obviously, we're growing in business like in-store marketing that are not the same margin that we have in the other business, but those margins are going up. So 20% is really what we're aiming for to protect in the future.

[Mark Neville, Analyst]

Okay. But in terms of the maybe absolute dollar figures, and you're talking about growing next year in each segment, sort of excluding the rate subsidy, excluding the extra week. Is there sort of round numbers you can help us with?

[H. Peter Brues, President, CEO & Director]

Regarding your model, you may talk with Yan, but what we're certainly facing is that the first 5 months of fiscal '22 will have an easier comparable if we compare to last year. If you look at the growth that we had this year, first quarter were very negative compared to 2020 then almost flat second quarter and, I think, close to 15% in the third quarter and a very -- again, good growth in this quarter. So from what we see and obviously, I won't comment on what's going to happen with COVID in 2022, but the trend is good, at least for the first half of the year. And we have good momentum with the part of the business that's growing right now. So this is -- Mark, overall, we're confident to deliver growth in 2022.

[Mark Neville, Analyst]

Okay. Maybe one last question. Can you -- maybe you mentioned, but have you disclosed the purchase price for the Crocker acquisition?

[H. Peter Brues, President, CEO & Director]

No.

[Operator]

Your next question comes from Drew McReynolds from RBC.

[Drew McReynolds]

Congratulations to Francois and Peter. And Francois, I just want to say it's been an absolute pleasure working with you, just a class act all around. So just all the best in your future. A couple of just follow-ups for me. I guess one just big picture for you, Peter. I know obviously, it doesn't sound like there's really any change here in the strategy or the priorities for the company, but maybe talk to that at a high level. And then secondly, on the CapEx, a little higher in fiscal 2022 than certainly what is in our model. As we look kind of through the medium term, is this now the new run rate for the total business? Or do you still expect some ebb and flow from these levels?

[H. Peter Brues, President, CEO & Director]

Thanks, Drew. So what I'd say is, first, while I'm new day-to-day, and there's certainly a difference between day-to-day and being a member of the Board, I have been a part of the Board for quite a while now. So from a strategic point of view, I've been across and been part of the Board team that's approved the company strategy. So for me, I'm more than excited to take on the role, understanding that we have a Print and Media business that are very strongly positioned to create value for our customers.We have a Print business that now has legs, that have growth elements to them that I think are important and to continue on. So for me, there's a strong future footprint. And from a Packaging perspective, I come from that part of the industry, and I'm excited by the opportunity to grow the business significantly. So I don't see a change in the strategy. And in terms of the number for your model, as we said, in 2021, we're higher than last year. We said that this year, we might be close to 2021, but those are specific years where we see opportunity for us to invest in capacity growth, innovation and sustainability. But I won't say that this amount is the new benchmark. It’s specific to some of the investments we will make over 2-year period, but this is not the benchmark for the long-term with the current supply and the way it is right now.

[Drew McReynolds]

Okay. Super. And maybe one follow-up, and it's a little bit related to the last question. You quantified the impact of the extra week at $57 million in revenue, continue just kind of simplistically roll that down to EBITDA to get an EBITDA impact of that extra week in the quarter. Is that kind of a fair way to do it?

[H. Peter Brues, President, CEO & Director]

Yes, you can make some -- regarding the sectors, but don't forget that corporate doesn't deliver any EBITDA. So that's an extra cost. So it's not a question that divided by the number of weeks, but it will give you a good benchmark by the way you stock. But consider that we have expenses at corporate level that comes in this picture. So it's not the equivalent.

[Operator]

Your next question comes from Stephen MacLeod from BMO Capital Markets.

[Stephen MacLeod, Analyst]

Francois, congratulations on your long tenure. And Peter, I look forward to working with you. A couple of questions here. Specifically, when you think about the packaging segment in the quarter and sort of what you've seen on a year-to-date basis, can you talk a little bit about where you're seeing the volume growth in terms of the end markets and the segments? And if there's any differentiation across that spectrum?

[Francois Olivier]

Well, Donald mentioned advanced coating in the medical space. We had a good quarter. But for the most part, all the sector we operate in, whether it's the dairy, the consumer space or the agriculture in LatAm and the level of activity is pretty good. So everybody participates to the organic growth, positive organic growth in Q4. And we expect everybody to participate in 2022. So we highlighted for Q4, the coating business around the medical space that had the best year-over-year growth. But there's not a specific sector that is overperforming or one that is underperforming. We have good loading in most of our factory. And frankly, we have more supply chain issue in terms of delivering our customer than we have right now a problem with the loading.

[Stephen MacLeod, Analyst]

Great. And then for Peter, I know you sort of addressed this in the previous questions. But can you just talk a little bit about sort of where your priorities are, obviously, understanding that there's no -- no one has to sort of change the strategy considering you've had a board oversight on that. But can you just talk a bit of where your priorities are over the next sort of 6 to 12 months?

[H. Peter Brues, President, CEO & Director]

I'd say, Stephen, is my priority in the short term, really has been around customer and coworkers. And so for me, I don't want to pretend that after 6 weeks, I'm going to extend to tell you what my focus will be over the next year. I think the starting point is to get a strong understanding of the business and speaking to people and customers gives me the strong understanding, and I still have a bit of work to do there. So I think when we catch up next quarter, I'll be in a better position to answer your question more fully.

[Stephen MacLeod, Analyst]

That's great. And then just finally, I was wondering if you could sort of just summarize if you have it in front of you. Just the CWS dollar impact in both the Printing segment and the Packaging segment?

[Francois Olivier]

Well, in the Packaging segment, this year, didn't have any impact. We received minimum dollars. But overall, at the consolidated level, we received this year, 50% of what we received in 2020. And obviously, as I said in my opening remarks, we don't expect to receive any dollars. So you can look at our MD&A, where it's close to $30 million of, if you want, negative coming from that end of fiscal 2022, that it's mainly at Print level.

[Operator]

[Foreign Language] [Operator Instructions] Your next question comes from Adam Shine from National Bank.

[Adam Shine, MD, Head of Montreal Research & Research Analyst]

So Francois, goodbye, at least as it relates to transcontinental, and of course, I wish you well. And meanwhile, hello to you, Peter. Just a few questions left. I guess, in Packaging, something that looked interesting was like the Canada revenues doubled. Is there anything specific to that? Whether it's, again, the advanced coatings or just general performance? But that would sort of stood out as interesting. Maybe I'll pause there and move on to the others after.

[Francois Olivier]

I think we need to take that off-line. I'm kind of surprised by your comments. You just mentioned that the Canadian revenue of Packaging have doubled?

[Adam Shine, MD, Head of Montreal Research & Research Analyst]

Yes.

[Francois Olivier]

Well, we'll take it offline. It's kind of surprising.

[Adam Shine, MD, Head of Montreal Research & Research Analyst]

Okay. Fair enough. When we think about some of the disclosure around Printing as it relates to outlook, is it fair to say that given the moving pieces and acknowledging, exiting out the 53rd week, that the level in fiscal 2022 should be ultimately slightly above that of fiscal 2020. Is that a reasonable way maybe for you to now to look at Printing revenues?

[Francois Olivier]

It will be above, Adam. Because what's happening is that the things that are decreasing now in Printing, the most are not a significant part of the portfolio anymore. And what is growing double-digit like ISM is becoming to be a more significant part of the portfolio. And then retail has been growing this year compared to the COVID year. And we expect, especially with what's going on with the price of food going up in Canada, that the retail buyer are going to be more relevant than ever before going forward. So that's why we -- Donald mentioned that excluding the 53rd week, we see growth in printing. And the transformation of the portfolio is at 35% of the portfolio -- combined portfolio, what I call the traditional transcontinental, which is in print and media, it's actually growing. And a lot of those sectors are growing double digits. So -- and we have a view to make that to continue to grow that.So the outlook on revenue, it's going to improve from what it was a couple of years ago. The only thing that we are not sure about is the impact of the COVID in 2022. And nobody can predict that. And obviously, when restriction happened, and general retail is affected, and when retail was affected, well, a big part of the print portfolio is related to retail, especially the new sector of ISM in retail. So that's the color I can give you.

[Adam Shine, MD, Head of Montreal Research & Research Analyst]

Okay. And I appreciate that. And then maybe just one last one for Donald, just in regard to the $40 million or so of outlook in corporate cost line for fiscal 2022 sort of similar to that of the past year, obviously, some puts and takes of benefit perhaps earlier in the year on the Q at the same time, you did have some additional costs as you alluded to on the vaccination front. Anything else in terms of incremental buckets of items, whether it's headcount or anything else that we should be thinking about in terms of moving forward into next year?

[H. Peter Brues, President, CEO & Director]

No. No, I think if you compare to this year, as we see the survey, we have some partner. But the share, as you know, the share units have increased, and you're aware that we hedge most of the cost impact. But volume-wise, we were ahead this year, and I guess it's a new trend because now since the acquisition of Coveris, we have more people that are part of this program. But therefore, this is the first year where we have the full run rate of the new cost of this program. So this is why it's higher this year. It was higher for some other tier 1 timers, but this is why we're comfortable with $40 million for next year.

[Operator]

Your last question comes from David McFadgen from Cormark Securities.

[David John McFadgen, Director of Institutional Equity Research]

I just want to also echo my congratulations to Francois and Peter. A couple of questions. Just on the corporate cost line, you indicated that fiscal '22, you expect it to be about $40 million budget, $40 million in fiscal '21 and if anything you can say.

[H. Peter Brues, President, CEO & Director]

Was higher than that. I'll give you the exact numbers, $41 million.

[David John McFadgen, Director of Institutional Equity Research]

$41 million. Okay. And then in your outlook, you talked about Packaging, organic volume growth in fiscal 22, you thought it would grow despite the additional week. But do you think you could grow even with that additional week in fiscal '22? Or do you think that's tough to say?

[H. Peter Brues, President, CEO & Director]

For Packaging?

[David John McFadgen, Director of Institutional Equity Research]

Yes.

[Francois Olivier]

Well, I think what we -- should be similar in terms of percentage of what we have in 2021. So that's what we're aiming.

[David John McFadgen, Director of Institutional Equity Research]

Okay. And then I was just looking at the cash flow statement. I noticed there's a large working capital drain on investment in fiscal '21. And I'm just wondering, if we could recover some of that in fiscal '22? Or kind of what's the outlook for fiscal '22 on the working capital front?

[Francois Olivier]

Yes. We definitely want to have a better working cap. But what was really hit us this year is the impact of the resin price and it hit us not only in terms of inventory, which the impact was very large, but also on the AR side, because, obviously, your sales, you're selling to your customer, therefore, the AR came from sort of inflation of the resin price also. And on the supplier side, we used all the discount we can use. So therefore, we're less affected by that. So overall, we're very satisfied with the way we manage the receivable, the AR in Canada as they COVID impacts. But it's -- most of the impact, as I said, is related to resin price. So if you compare to next year, I won'6t make any prediction over where will be the resin price. If it's stable or lower, we should be in a better position, and we will make sure that we get better on the working cap overall.

[David John McFadgen, Director of Institutional Equity Research]

So do you think -- it sort of sounds like you would need resin price to decline, to reverse back.

[Francois Olivier]

What I'm saying is that, by far, the biggest impact is to explain the negative over the working cap is linked with the price of the business, large part of inventory, the largest increase when was on the inventory side and was due to the pricing. A little bit of the quantity in this time where we have issue with the supply chain, we were more -- we want to do a little bit more in our stocks, to make sure that if anything happens, we have enough to cover our needs for our clients. But price had a huge impact. I'm not saying that we bet on the resin price to decrease to have a better working cap. What I'm taking regarding your question and say, next year, where will it be? We will make everything to be in a better position, but that's excluding the fact that resin price may have an impact again next year.

[Operator]

[Foreign Language] [Operator Instructions] There are no further questions at this time.

[Yan Lapointe, Director of Investor Relations]

Thank you all for joining us on the call today, and I look forward to speaking to you sooner.

[Operator]

[Foreign Language] Ladies and gentlemen, this concludes the conference call for today. Thank you for participating. You may now disconnect your lines.