Cascades Inc. (CAS) Earnings Call Transcript & Summary

Ladies and gentlemen, good morning. Welcome to our Annual General and Special Meeting of Shareholders. My name is Alain Lemaire, Executive Chairman of the Board of Directors of Cascades. For the third year in a row, we are holding our meeting in a virtual form due to the COVID-19 pandemic. Like you, we are cautiously enthusiastic about the improving health situation. Unfortunately, at the time of deciding on the format of today's meeting, we were at the beginning of the sixth wave of COVID-19. While we consider it important to meet with shareholders in person, the decision to go virtual once again was guided by the principle of prudence that has served us well since the beginning of this pandemic. Your health as well as that of our employees, customers and all of our partners must come first. Hopefully, our next meeting will finally be an opportunity to reconnect with you in person. While we cannot meet in person, our goal today is to ensure that you can fully participate in our annual meeting. I invite you to ask your questions and vote on each topic as if you were participating in person. Thank you for joining us. This meeting is held in French, but simultaneous interpretation into English is available as you may have noticed when connecting to the platform. I therefore call the meeting to order, and I will act as the chairman of this virtual meeting. With me today are Mario Plourde, President and Chief Executive Officer; Allan Hogg, Vice President and Chief Financial Officer; Robert Hall, Chief Strategy Officer, General Counsel and Corporate Secretary, who will act as secretary of the meeting. I would now ask the secretary to explain to us some procedures related to the meeting.

Thank you, Alain. Since the meeting is held virtually via live audio webcast, we feel it is necessary to establish a few rules to ensure the smooth running of the meeting. [Operator Instructions] You can ask your question when we invite you to do so. Only registered shareholders or their duly appointed proxies may participate, ask questions and vote at the meeting. As described in our management proxy circular, the duly appointed proxies were required to register with our transfer agent and obtain a control number prior to this meeting in order to attend, vote and ask questions. All other proxies may attend the meeting as guests. Questions will only be answered during the question period at the end of the meeting. Questions or comments that contain inappropriate language or disrupt the orderly contact of the meeting will not be answered. We will not repeat questions that have already been answered or that are redundant. At today's meeting, all matters will be voted on by a single electronic vote. The registered shareholders and the duly appointed proxies will be asked to vote on each item of business after such items have been presented, therefore, at only one time. In due course, you will receive a message on the virtual interface asking you to vote. You will have sufficient time to vote on each item. But please note that you will have a time limit to do so. It is important to mention that shareholders who have already voted in advance do not have to vote again and can simply ignore the online ballot.

Thank you, Robert. I would now ask the secretary to file the notice of meeting, the management proxy circular, the voting proxy form and the certificates of mailing of the said documents and then to file them in the records of this meeting.

The documents are filed.

Thank you, Robert. Representatives of Computershare Investor Services inc., the company's transfer agent and registrar, are acting as scrutineers for this meeting. They are counting the proxies and the votes cast online today. I'm advised that their report is now ready, and I would invite Mr. Steve Gilbert to read it to us.

Good morning, Mr. Chairman. The scrutineers -- the report on attendance. Undersigned scrutineers, Computershare Investors Services Inc., report that there are at least 4 and/or proxy holders present at this meeting, representing 74,512,356 shares, 73.95% of the outstanding shares issued and in circulation of Cascades Inc., and I will submit a report signed by myself, Madam Girard.

Thank you, Mr. Gilbert. I therefore declare that the meeting is duly convened and validly constituted to deal with the subject on the agenda as mentioned by the secretary earlier. Votes will be cast on all matters to be voted upon by means of a single electronic ballot. At the appropriate time, you will receive a message on the virtual interface asking you to vote. You will have a limited amount of time to do so. Once the rights have been exercised with respect to all items on the meeting agenda, the scrutineers will tabulate the votes for each item. The next item on the agenda is the receipt of the audited consolidated financial statement of the company for the year ended December 31, 2021, and the independent auditor's report. I would like the secretary to file the audited consolidated financial statements of the company for the year ended December 31, 2021, together with the independent auditor's report thereon and the affidavit of transmittal certifying that a copy of such document was mailed on April 12, 2022, to the shareholders who requested them.

I'm filing the documents.

Thank you, Robert. The next item on the agenda is the election of the 13 nominees proposed by management for the positions of directors of the corporation. The Board has established a number of nominees proposed for election as directors of the company at 13. Can a registered holder of common shares or proxy holder now make a proposal for the nomination of each of the 13 persons?

My name is Robert Hall, a shareholder. Mr. Chairman, I nominate each of the following persons for election as Director of the Corporation: Mr. Alain Lemaire; Madam Sylvie Lemaire; Madam Elise Pelletier; Madam Sylvie Vachon; Mr. Mario Plourde; Madam Michelle Cormier; Mr. Patrick Lemaire; Mr. Martin Couture; Mr. Hubert Lacroix; Mr. Nelson Gentiletti; Madam Mélanie Dunn; Madam Elif Lévesque; and Mr. Alex N. Blanco.

Thank you, Robert. Are there any other nominees that you propose? As there are no other nominees, can a registered holder of common share or a proxy holder of common share now make a proposal for the election of each of these 13 persons?

My name is Allan Hogg, shareholder. Mr. Chairman, I move that each of the 13 nominees be elected as a member of the Board of Directors of the corporation until the next Annual General Meeting or until their successors are elected.

Thank you, Allan. Is this proposal seconded?

My name is Robert Hall. I'm a shareholder, and I second this proposal.

Thank you, Robert. The proposal has been moved and seconded. Again, as was mentioned at the beginning of the meeting, for all proposals, the voting rights today will be exercised by a single electronic ballot. The next item on the agenda is the appointment of the independent auditor for the year 2022. The Board of Directors on the advice of the Audit and Finance Committee recommends that PricewaterhouseCoopers Chartered Professional Accountants be appointed as the company's independent auditor and that the directors be authorized to fix its remuneration. I see that Robert Hall wishes to make a proposal to that effect.

Mr. Chairman, my name is Robert Hall, a shareholder, and I move that PricewaterhouseCoopers Chartered Professional Accountants be appointed as the company's independent auditor for the ensuing year and that the Board of Directors be authorized to fix its remuneration.

Thank you, Robert. Would anyone like to second the motion?

My name is Allan Hogg, shareholder. Mr. Chairman, I second this proposal.

Thank you, Allan. The motion has been made and seconded. The next item on the agenda is the approval of the advisory resolution, accepting the company's approach on executive compensation. This as described in the management proxy circular. I see that Mr. Hall wishes to make a proposal.

Mr. Chairman, my name is Robert Hall, shareholder. I move the adoption of the advisory resolution, accepting the company's approach on executive compensation.

Thank you, Robert. Would Allan Hogg like to second that proposal?

My name is Allan Hogg, shareholder. Mr. Chairman, I second this proposal.

Thank you, Allan. The motion has been duly made and seconded. The next item on the agenda is the approval and adoption of a special resolution in order to amend the article of incorporation of the corporation as described in the management proxy circular. Mr. Hall, would you like to make a proposal to that effect?

Mr. Chairman, my name is Robert Hall, shareholder. I move the adoption of the special resolution to amend the articles of incorporation of the company, all as described in the proxy circular.

Thank you, Robert. Would Allan Hogg like to second this proposal?

My name is Allan Hogg, shareholder. Mr. Chairman, I second this proposal.

Thank you, Allan. The motion has been duly made and seconded. The next item on the agenda are the proposals submitted by MEDAC and described in appendix A of the proxy circular. I would now ask the representative of MEDAC to present the 5 proposals. Mr. Jean Chambers, the floor is yours. Mr. Chambers? There seems to be a technical issue, which prevents Mr. Chambers from contacting us. Is this the case? The technical team tells me that we're trying to join him on the phone. So we will be waiting for Mr. Chambers to join us on the phone. So we'll wait for him. Thank you, everybody. Given the technical situation, I see that the phone line is open. Mr. Chambers, the floor is yours.

Good morning. My name is Jean Chambers. You hear me well?

Yes, sir. Yes, the floor is yours.

I apologize. I don't know what happened. Well, good morning. My name is Jean Chambers. I'm a Cascades shareholder, and I'm intervening on behalf of MEDAC, the Movement of Education and Defense of Shareholders. I will name the proposals one after the other. There are 5 of them. And I don't know how you intend to proceed. I was not listening. Proposal A1, increase formal employee representation in highly strategic decision-making. It is proposed that the Board of Directors assess means to increase employee participation in the Board's decision-making. It is suggested that the findings of this reflection be reported at the next annual meeting in 2023. In the reply to our shareholder proposal, it is written on Page 44 that the addition of the representation of the employees on the Board could have a negative impact. Our proposal is not asking for such an addition. Our proposal asks Cascades to examine the best practices to represent the interest of the employees elsewhere in the world, especially in Western Europe and the United Kingdom, and that Cascades undertakes a reflection and reports on its reflection in 2023. Most of the other corporation that we have presented this proposal with had accepted to do so. So we're inviting all the shareholders to support this proposal. Are you proceeding to the vote immediately or should I go on?

No, please continue. Please present the 5 proposals. The vote will be made later on, and we'll wait for the outcome of the vote. So please continue, Mr. Chambers.

Thank you. Let me continue. So women managers' promotions, advancement and rising in the ranks. It is proposed that the corporation publishes annually in any form it deems appropriate a report on the representation of women in leadership roles from the most junior to the top levels of management. In Cascades' response to MEDAC's proposal in the proxy circular on Page 46, it is -- we -- they talk about the Board of Directors. This is not the topic of the proposal. This proposal that we have presented to all corporation in which we are shareholders is to follow the current regulation. The shareholder proposal is asking that data about the presence of women at all levels of management be ventilated in a synthetic fashion and that in a single location. We have mentioned practices of the Royal Bank that we don't deem perfect, but that can be a model. The information is presented for all levels and over several years and -- they even set targets. We invite the meeting to support this proposal. Proposal 3, becoming a benefit company. It is proposed that the company analyze the possibility of becoming a benefit company and report their findings to the shareholders at the next annual meeting. The proposal is not a criticism of Cascades' practices in the field of ESG. This proposal is sent to all the corporations and invites the corporation to commit itself to respect its own commitments in these questions instead of remaining in the current situation where all those topics are sort of optional. We invite the meeting of shareholders to support this proposal. Proposal 4, French as the official language. It is proposed that the language of the corporation be French, including the language of business in Quebec as well as the language at annual meetings. Its official status should be formally recorded in writing in the bylaws of the corporation. The reasons against this proposal was sent to all the corporations and is not a criticism of the current ways of doing things in Cascades. And we -- based on the specific character of this proposal, we had the opportunity to speak with an independent director, and we are happy with this. This being said, the language should be part of the official documentation of the corporation so that the duties about the language should be respected. This should be true for all public persons contrary to what happened recently and throughout history. So this proposal aims that the corporation to respect the language by officializing its duties, so that to change the duties, a special meeting should be called and get it qualified majority. The respect of language should be dealt with as an obligation of the corporation and the corporation should refer to the shareholders to change that. It should be included in the bylaws of the corporation, which was rejected. The language issue is not concerning the individuals, but the public person that the corporation is and its obligations towards the society at large. We would have expected that the corporations that are really behaving well about the language would adopt this proposal and would be an example for those who are not following this behavior. We regret that this is not the case and, therefore, we invite the meeting of shareholders to support this proposal. Proposal 5, corporate purpose and commitment. This proposal, having received 17.89% support from shareholders, is being presented again. It is proposed that the Board of Directors and management state Cascades Inc's purpose as a corporation and that one of the Board's committees has in its mandate, to ensure the oversight of the deployment of the policies, commitments and initiatives, put in place to realize this new strategic vision, especially with regards to health, environment, human resources and stakeholders' relations. The corporations to which we have presented this proposal accepted to include this responsibility to include their corporate purpose into the terms of reference of their Governance Committee. We recognized the positive fact that the Governance, Social Responsibility and Nominating Committee has been entrusted with the ESG responsibilities, but we invite the meeting of shareholders to support our proposal. That's all. Are you there?

Thank you very much. And so we will continue the meeting. We are now going to vote on all the items on the items of the agenda, meaning the approval of the director nominees, the various resolutions and the approval of the special resolutions to modify the bylaws of the corporation and the 5 proposals that were presented by MEDAC. I remind you that the shareholders who already voted don't need to vote again and can simply ignore the electronic ballot. In a few moments, you will be invited to vote on each of the 5 items on the agenda. When you will be invited, please go to the voting page. First, press on the In Favor or Abstain button next to the resolution regarding the -- next to the name of each director candidate. Secondly, press the In Favor or Abstain button next to the resolution regarding the appointment of PricewaterhouseCoopers as the company's independent auditor. Third, press the For or Against button next to the advisory resolution accepting Cascades' approach to executive compensation. Fourth, press For or Against button next to the special resolution for the purpose of amending the articles of incorporation of the corporation. And Fifth, press the Support or Oppose button next to the 5 proposals submitted by MEDAC. Once the electronic voting is complete, the voting page will disappear and your votes will be recorded automatically. We will give the registered shareholders and the proxies about 2 minutes to complete the electronic ballots, to fill electronic ballots. Once the vote is over, I will ask the scrutineers to compile a report of the results of the voting on all the items on the agenda. We will soon be back to unveil the results. Thank you for your patience. So you have 2 minutes to vote. [Voting]

Thank you for your patience. I will now invite Mr. Steve Gilbert of Computershare to read the scrutineers' report on the preliminary results of the vote.

Thank you, Mr. President. Do you hear me?

Yes, we do. Yes.

Thank you. with respect to the election of directors, I can confirm that the 13 candidates were duly elected directors of the corporation. I'm also able to report that the resolution regarding the appointment of PricewaterhouseCoopers as the corporation's independent auditor, the advisory resolution accepting Cascades' approach to executive compensation and the special resolution adopting amendments to the corporation's articles of incorporation were all carried. Finally, I would like to inform you that the 5 proposals submitted by MEDAC were rejected. So this completes the results of the voting.

Thank you, Mr. Gilbert. I can confirm that the final results of the vote will be available on SEDAR tomorrow. I now invite Mario Plourde, the President and Chief Executive Officer, to speak. Mario?

Good morning to all of you. Thank you for joining us today. On behalf of Cascades' management team and our Board of Directors, I would like to thank our shareholders, customers and suppliers as well as the communities in which we operate for their support and collaboration throughout 2021. I would also like to thank our employees for their continued resilience and immeasurable contribution to our success. Without a doubt, their hard work and dedication, despite the challenges and uncertainties encountered in 2021, have enabled Cascades to provide our customers with the essential products and solutions they need every day. I will begin this morning with an overview of the key highlights of 2021. Allan will then discuss our 2021 financial performance as well as our 2022 first quarter results, which were released earlier today. We will conclude the meeting with an overview of our 2022-2024 strategic plan and our 2021-2025 sustainability plan. Let me start with our financial performance in 2021. Our sales totaled $4 billion, down 4% from 2020 levels. Also shown for reference are sales for the Europe Boxboard business, which was divested in October 2021. On an adjusted basis, operating income before depreciation and amortization, more commonly known as EBITDA, was $389 million for the year. Again, the recently monetized Europe Boxboard business is provided as a reference. Consolidated adjusted EBITDA decreased to 29% from the prior year and resulted in a margin of 9.8% for the period. As discussed in our annual communications, this performance reflects the significant impact of the COVID-19 pandemic on demand for fabric products, our tissue products, significant inflationary pressures on input and operational costs, labor availability challenges and logistical and supply chain constraints throughout 2021. Despite these factors, our packaging business generated higher sales levels for the year. While the company's financial performance in 2021 fell short of our expectations, our ability to provide our customers with sustainable solutions throughout the recent turbulence is a true testament to the perseverance and hard work of our employees. While the COVID-19 pandemic continued to present some challenges, it didn't prevent us from successfully making strategic investments throughout 2021. We invested $330 million in our fixed assets, mills and equipment, $217 million of which in the Containerboard segment. The lion's share of the investments in this segment went to our strategic paper machine conversion project in Bear Island, Virginia. More broadly, all investments made during the year were aimed at improving competitive positioning, productivity and long-term value creation. To this end, our investments were spread geographically, underscoring our focus on modernizing our asset base and increasing the efficiency of our platforms across North America. Let me now briefly touch on some of the highlights of the year. We completed the sale of our interest in Reno de Medici in October, as I briefly mentioned in my comments on our financial performance. This transaction generated net proceeds of $450 million, which were used to repurchase USD 299 million of unsecured subordinated bills, increased our quarterly dividend by 50% to $0.12 per common share and complete our share repurchase program. In June 2021, we launched our fourth sustainability action plan called Powering Progress, the most ambitious plan in our history. And in February of this year, we announced our new 3-year strategic plan called Straight Ahead for the years 2022 to 2024. I'll talk about both of these plans in more detail in a few minutes. In our Containerboard segment, we made investments in converting equipment in Ontario as part of the repositioning of our platform in that province. We also invested in converting equipment in the Northeastern United States, which has allowed us to increase our capacity to meet growing demand in several strategic markets. Last, but certainly not least, we continued to advance our strategic Bear Island, Virginia project. The inflationary macro environment has pushed the total planned investment for this project into the range of USD 425 million, USD 450 million compared to the original project cost of USD 380 million. Work is proceeding according to schedule, and our goal is to produce the first roll of paper in December of this year. Strategically, this mill will produce lightweight, environmentally friendly linerboard and fluting, made from 100% recycled material, characteristics that are very much in line with key new market trends. The mill, once up and running, will be a first quartile facility and a very good complement to our Greenpac Mill, positioning our containerboard platform well, both from a product and geographic perspective. CAD 275 million will be invested project in 2022. We anticipate a positive contribution to the [indiscernible] from this asset starting in 2023. Now let's turn to the highlights of our Specialty Products segment. This segment continued to perform positively in 2021, generating improved margins as demand for sustainable packaging products continues to grow. To that end, we've made several strategic investments in rigid and flexible recycled plastic packaging and insulated containers to meet the growing demand. The solutions offered by this sector are widely recognized for their innovative and sustainable characteristics. Finally, despite a challenging environment for the tissue market in 2021, we are pleased to have largely completed significant multiyear investments to modernize and optimize the converting asset base in this sector. These investments have repositioned this platform with more than 80% of our converting capacity now considered first quartile in terms of competitiveness and quality. Part of this effort, however, has involved the always difficult decision to close plants in recent years, including the Laval, Quebec plant in 2021. A total of $51 million in proceeds was generated from the sale of the assets of these closed operations. We would like to thank our employees at all these facilities for their dedication and hard work over the years. I will now turn the call over to Allan, who will provide a more detailed overview of our financial performance in 2021 as well as highlights of our first quarter 2022 results that were released earlier this morning. Allan?

Thank you, Mario. Good morning, everyone, and thank you for joining us today. As Mario announced, I will be beginning with a review of our financial performance for 2021 and then discuss our quarter of -- first quarter 2022 results. Before I begin, I would like to remind you that we announced the sale of our 57.6% stake in Reno de Medici S.p.A. and then closed the transaction on October 26, 2021, generating net proceeds of $450 million. Accordingly, these operations have been presented as discontinued operations beginning in the second quarter of 2021. As mentioned earlier, sales totaled $4 billion in 2021, down 3.6% from the 2020 levels. This reflects lower sales in the Tissue segment, where sales were down 21% in the retail and out-of-home markets due to volatility and significant fluctuation in demand related to COVID-19. This impact was partially offset by higher sales in our Packaging segment, reflecting good consolidated adjusted OIBD of $389 million, was down 29% from 2020 and representing a margin of 9.8%. This largely reflects higher raw material and transportation costs for all of our business as well as lower volume in our Tissue business, the effects of which were only partially offset by higher selling prices in the packaging business. Our Containerboard business grew sales by 5% in 2021, while the OIBD levels decreased by 8% compared to 2020. Sales growth was driven by improvements in both price and mix of products sold, reflecting strong industry fundamentals. These benefits were partly offset by slightly lower volumes and less favorable exchange rate. The annual decline in OIBD is more reflective of the higher average cost of this segment's primary raw material, recycled paper and inflationary pressure on production and supply chain costs, particularly in logistics. Our Specialty Products segment generated a strong sales increase of 16% in 2021. This performance was a result of increased volumes, improved pricing and product mix, the benefits of which offset the less favorable foreign exchange rate. Adjusted OIBD increased by 23% in 2021 as the benefits of higher volumes and improved pricing and product mix mitigated the negative impact of higher raw material costs and higher operating maintenance and logistics cost. Now let's turn to our Tissue business. As Mario noted earlier, 2021 was a challenging year for this segment. Sales were down 21% from 2020 levels, reflecting a significant contraction in demand levels caused by the effects of the pandemic as well as the lower average selling price and unfavorable mix of products sold and a less favorable exchange rate. Profitability in this segment was significantly below prior year levels, reflecting the factors mentioned as well as higher average raw material and energy prices. These factors were partially offset by lower fixed costs and overhead due to network optimization efforts, cost control initiatives and plant closures. Now let's talk about our debt level. In 2021, net debt decreased by $384 million or 20% from the previous year. This reflects good cash flow generation from our operations as well as proceeds from the sale of our interest in Reno de Medici, additional proceeds from the disposal of other assets and more favorable exchange rate on our U.S. dollar-denominated debt. Together, these items exceeded our capital expenditures during the year. Our debt ratio stood at 3.5x at the end of 2021, up 2.5x at the end of the previous year. This largely reflects the significant investment of our Bear Island conversion project throughout the year in preparation for its startup in December 2022 prior to any OIBD contribution from this asset. Following the startup of this plant, our debt ratio is expected to gradually align with our target ratio of between 2.5x and 3x. We will continue to be diligent in managing our balance sheet and capital allocation plans. We expect our operation and operating cash flow to fully fund our capital requirements in the coming year. We currently have no significant maturities prior to 2025. We had $674 million available on our credit facility as of March 31, 2022, and we expect our operations to generate good cash flow this year. Now let's turn to the first quarter of 2022 results that were released earlier today. First quarter 2022, sales totaled $1.04 billion. This represents 1% increase over the same period last year and a slight 10% increase over fourth quarter of 2021 levels. The main factors behind this increase in sales were improved pricing and product mix in all business segments as well as higher volumes in the issue -- in the Tissue and Specialty Products segments. Specifically, in Tissue, we were encouraged by the 18% increase in volume for our out-of-home product during the period, which was driven by the reopening economy as well as early progress on our net income management initiatives. As you know, 2021 was a challenging year for this segment, and we view any normalization of demand trends as positive. All of our businesses have faced significant inflationary cost pressures during the quarter as well as continued constraints and logistics availability, which, combined with higher fuel prices, further increased transportation costs. These factors reduced shipment levels and results in the first quarter. On a sequential basis, raw material prices were favorable for our packaging segment with wastepaper prices down 16% from the fourth quarter. Unfortunately, the same cannot be said for our Tissue business as sorted office paper prices were up 18% over the previous quarter, while pulp prices were up more modest 4%. I would like to point out that the recently announced selling prices increase in the Tissue business will only begin to be found in May, and we'll have to partially mitigate the cost increase. Year-over-year, raw material costs increased significantly with recycled paperboard prices at 77% higher than the previous year, sorted office paper 109% higher and virgin pulp 17% to 27% higher. Let's now turn to our consolidated operating income and adjusted results for the first quarter, which were below our expectations. In addition to lower volumes in Containerboard, raw material price inflation and higher production and logistic costs negatively impacted results in all of our segments compared to the prior year and were the primary factor behind the notable decline in Tissue results. More favorable pricing and product mix in all businesses partially mitigated these impacts. Now let's talk about the evolution of the net debt during the first quarter. Cash flow from operations, the positive impact of foreign exchange and proceeds from asset disposals all benefited our net debt level during the period. They were more than offset by higher dividend payment and working capital requirements in the -- and this was due to our capital project. I would like to note that after plant startup, we will have this facility in December 2022. Our capital investment levels will be limited to approximately 4% of revenues beginning in 2023. Net debt increased by $198 million and 15% of December 31 to a debt ratio. So any comment regarding the first quarter will be brief. I would like to thank you for your attention. I will give the floor to Mario, who will talk to you about the 2022-'24 strategic plan, our 2021-'25 sustainability plan. Mario?

Thank you, Allan. And before we talk about the new strategic plan, I would like to talk about the prospect for 2022, as Allan mentioned. When reviewing the first quarter, our company is in an environment where we'll have certain headwind. Well, it will be difficult to plan the strength and duration of these headwinds, we expect energy prices, logistics and production cost and transportation-ability pressure to continue to be part of the operating environment throughout the year. For our Tissue segment, high white recycled fiber and virgin pulp prices are also significant headwinds. These factors are offset by continued good demand levels for packaging products and announced price increases in all our businesses. For Tissue, the accelerating reopening of the economy supports our outlook for a return to normal demand levels. We expect to benefit from our new 3-year strategic plan, which we'll talk about in a moment and which will include some important key profitability initiatives for our Tissue business. Last but not least is our Bear Island paper machine conversion project, as I mentioned in my previous remarks. Let us move to our 2022-2024 strategic plan. Let's turn to our -- which we launched in February titled Straight Ahead. This new plan is comprehensive and multifaceted. Key deliverables for each of our business lines are being closely monitored and evaluated internally. For our Containerboard packaging sector, our main objectives are complete the startup of the Bear Island paper machine, increase our integration rate by adding new conversion capabilities in the United States, achieve our new revenue in 2024, generate an EBIT (sic) [ OIBD ] margin of between 19% and 21% in 2024 and complete the $325 million of investment plan for 2022 in this area, the vast majority of which $275 million will be dedicated to our Bear Island project. Our strategic plan is to continue to position our operations to take advantage of consumer demand trends and targeted [ province ] markets, further strengthening the long-term competitiveness, productivity and efficiency of this business and its product offering. In the same vein, the strategic actions outlined in our action plan to our Specialty Products segment are very well aligned with the growing market demand for sustainable and innovative packaging solutions. So our 5 priorities in this sector are, first, increase the pace, both in terms of development and commercial launch of new responsible products. In terms of sales, we are focused on developing and increasing our shares in the key strategic markets that we are targeting. These efforts will be supported by planned investments in technology for $700 million in revenue by -- $40 million in 2022. These investments combined are the primary drivers for achieving our role of $700 million in revenue by 2024 and of our objective of achieving EBITDA margins of between 17% and 19% in this business segment of activity, which leads me to talk about the actual plan for our Tissue sector. Without question, recent results in these segments have been disappointing. With this in mind, our strategic plan for this segment is designed with a clear objective of improving profitability levels through key actions. The first is to take advantage of the renewed asset base in this sector. In so doing, we will make the significant modernization investments that have been made in recent years pay off. The second priority is to improve production execution and efficiency rates, particularly in our U.S. facilities. We also want to optimize our business strategies to create value, including proactive revenue management and pricing, products and customer relationships. We want to focus on improving our internal business expertise and dexterity. These concrete steps are key to achieving our goal of $1.7 billion in revenue by 2024 and an EBIT (sic) [ OIBD ] margin of between 9% and 10%. Combined, the actions taken in each of our business areas are the building blocks of our strategic corporate objectives, which are the following: generate $5 billion in revenue by 2024; achieve EBIT (sic) [ OIBD ] margins of 11% to 13% in 2022 and 13% to 15% in '23, '24; achieve our free cash flow target of 9% to 11% of revenues upon completion of the Bear Island project; maintain our current dividend and normal course issuer bid levels with a view to reviewing and reevaluating them beginning in 2023, while achieving our target net debt to adjusted EBITDA ratio in the range of 2.5x to 3x by the end of 2022 and thereafter, maintaining our debt ratio in the range of 2 to 2.5x by the end of 2024. We are committed to achieving these ambitious goals for the company, our employees and our shareholders, and we are convinced that they are achievable through proactive strategic actions in all of our businesses. These actions also extend to our commitment to sustainability, which is at the heart of not only who we are as a company but what we do every day. We are immensely proud that our work and commitment continue to be recognized. According to Corporate Knights Global 100 ranking, Cascades was recognized as the 18th most sustainable company in the world, ranking first in the packaging category. Our greenhouse gas emission reduction targets have been endorsed by the science-based targets initiative. We have received a AA rating in the MSCI ESG assessments, and we've been proudly assessed by the Carbon Disclosure Project since 2017. We've also been named one of Canada's top 100 employers. Importantly, our efforts are also being recognized by our customers as evidenced by Walmart, awarding us the title of Giga-Guru for our leadership in reducing greenhouse gas emissions. We are proud of these achievements and are committed to continuing our work. To do this, we are building on the solid foundation of our past. Cascades has been practicing sustainable development long before it was a trend. And we don't just focus on our own efforts, we support our customers and their efforts to reduce their environmental footprint by providing value-added green products and services. Consumers are demanding a more sustainable future, and for our customers, that means doing business with responsible partners like Cascades. We are in the right place at the right time. Our ESG strategy is aligned with the UN's Sustainable Development Goals. We have ambitious greenhouse gas emission reduction targets, and we remain committed to ensuring that all our packaging is recyclable, compostable and reusable by 2030. To this end, our new sustainability action plan 2021-2025 defines our targets and initiatives to achieve our ambitious goals under 4 main categories: planet-friendly, solutions-driven, community-focused and people-focused. As it has been the case since our beginnings nearly 60 years ago, Cascades was, is and will remain a company dedicated to the circular economy. Innovation goes hand-in-hand with this commitment and is an integral part of our efforts to provide our customers with solutions that meet their growing need for responsible and sustainable products. Recent innovative solutions from Cascades include the first 100% recycled thermoformed paperboard tray in North America, coated with the water-based barrier that makes it both recyclable and compostable. We were also the first company in Canada to introduce a 100% recycled plastic packaging for our Fluff & Tuff tissue products. Our Cascades PRO, Tandem dispensers continue to provide a higher level of hygiene and efficiency. We continue to adapt to our customers' market trends with a range of eco-friendly packaging for online retail. Our teams have also developed and launched our northbox XTEND product, which is up to 20% more efficient at keeping products cold. This insulated box is both recycled and recyclable. Looking ahead, we are working to enrich our offering with innovative green solutions. In addition to being an integral part of our sustainable DNA, this commitment will also drive future value creation for Cascades, our customers and our shareholders. Before concluding today's meeting, let me say that we're not only optimistic but also confident about our future. The strategic investments we have made over the past few years have significantly modernized our operational platforms and positioned Cascades to create significant value for the company and all our stakeholders in the future. Thank you for your attention today and for your continued support and trust. We look forward to updating you on our progress throughout the year.

Thank you. Congratulations, Mario and Allan. So we are now in the question period. We'll answer a question that we registered shareholders or duly appointed proxy duly appointed wishes to bring to the attention of this meeting. For each question received in the chat box, we will summarize the question and read aloud the name of the person who asked the question, and if applicable, we'll name the entity that they represent. [Operator Instructions] We have the people online. We have received no questions for the time being. Let's wait for a few minutes. So there are no questions up to this point. So I think that people were satisfied with the comments that were made and the way that it flowed. There being no further questions, we'll now conclude the question period from the floor. Having exhausted all the subjects from the agenda, I declare the meeting closed. Journalists who would like to conduct one-on-one interview following the meeting are invited to contact Hugo D'Amours, Vice President, Communications and Public Affairs, whose contact information appears on the screen. Thank you all for your attention today and take care. Have a great summer, all. [Statements in English on this transcript were spoken by an interpreter present on the live call.]