KP Tissue Releases Fourth Quarter and Full Year 2020 Financial Results
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KP Tissue Inc. (KPT) (TSX: KPT) reports the Q4 2020 and full year 2020 financial and operational results of KPT and Kruger Products L.P. (KPLP). Kruger Products is Canada's leading manufacturer of quality tissue products for the Consumer market (Cashmere, Purex, SpongeTowels, Scotties, and White Swan) and the Away-From-Home (AFH) market, and continues to expand in the U.S. Consumer market with the White Cloud® brand and premium private label products. KPT currently holds a 14.7% interest in KPLP.
KPLP Q4 2020 Business and Financial Highlights
• Revenue was $385.0 million in Q4 2020 compared to $348.1 million in Q4 2019, an increase of $36.9 million or 10.6%.
• Adjusted EBITDA was $36.2 million in Q4 2020, including $4.5 million of TAD Sherbrooke start-up costs, compared to $46.0 million in Q4 2019, a decrease of 21.3%.
• Successful start-up of new TAD Sherbrooke paper machine, project completed on time and on budget.
• Announced the $240 million Sherbrooke Expansion Project.
• Declared a quarterly dividend of $0.18 per share to be paid on April 15, 2021.
KPLP Full Year 2020 Business and Financial Highlights
• Revenue was $1,516.0 million in 2020 compared to $1,357.2 million excluding the divested Mexico business in 2019, an increase of $158.8 million or 11.7%.
• Adjusted EBITDA was $197.8 million in 2020, up from $145.0 million in 2019, an increase of 36.4%.
“The year 2020 brought more than its share of challenges along with unprecedented market conditions that our team successfully tackled. Strong demand across all consumer product categories and market share momentum translated into a record high Adjusted EBITDA, while the Away-From-Home segment remained under pressure from the impact of COVID-19. Revenues increased a solid 11.7% to just over $1.5 billion while Adjusted EBITDA increased significantly by 36.4% to $197.8 million,” stated KP Tissue Chief Executive Officer, Dino Bianco.
“Under the most challenging circumstances, our team did amazing work completing TAD Sherbrooke on time and on budget. Production on the new TAD paper machine has commenced and, at this stage, is tracking ahead of the ramp-up curve. To further support our North American footprint and consumer demand, we recently announced a new $240 million investment at our Sherbrooke site. A new facility will house a Light-Dry-Crepe paper machine and facial tissue converting line while a new bathroom tissue converting line will be added to the existing TAD Sherbrooke facility. At maturity, the combined annual capacity of the two facilities will reach over 100,000 metric tonnes.
“We completed the initial 2-year phase of our OpEx program ahead of our annual cost saving targets. As indicated before, the program was instrumental in our ability to more effectively address strong market demand and volatility caused by the pandemic. Among the longer-term benefits, this program fosters a culture shift with a higher-level of employee engagement towards operational excellence.
“In 2021, we look forward to leveraging TAD Sherbrooke to further support our North American customers. We are closely monitoring the unprecedented increase in pulp prices and developing action plans to address. Finally, we will be continuing further investments in our brands, and leveraging our innovation and marketing strategy to reinforce our leadership position,” concluded Mr. Bianco.
