Winpak Stock

Okay. All right. Good afternoon, everybody. Welcome to Winpak's Annual Meeting of Shareholders. I'm Scott Taylor, the Vice President

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introduce the honorable Jamie Moses, Minister of Business, Mining, Trade and Job Creation, who will deliver the opening remarks for today's meeting.

Thank you very much, Scott, for the introduction. I'm pleased to be here. I am also [ honored ] for the invitation to speak and bring greetings on behalf of the province of Manitoba. That's right. My name is Jamie Moses. I'm the Minister of Business, Mining, Trade for Manitoba, responsible for stewarding the economic development and growth and success.

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another successful year. We know Winpak has a long-standing tradition of success here over 50 years. And we know that your presence in Manitoba is really important, really important for driving the economic success of local businesses to large enterprises, for developing and helping to help so many other companies thrive in the work they do each and every day. And we know that's even more important now than it's been ever before. When we look at supply chains being interrupted, global conflicts putting strain on the relationships between customers and their clients. And seemingly, these events seem to change

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post by social media posts, these events are, in many ways, making our global landscape for trade in a more uncertain place. And our provincial government is taking steps to make sure that Manitoba and Canada as a whole becomes and remains to be a more friendly place to make investments. This is a home where you have a trusted partner, a reliable and stable government that continue to work to build friendly and positive relationships with partners around the country and around the world that both go to break down barriers for trade and investments, at the same time, building positive relationships and on top of

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drive and meet the needs in an ever-changing global environment that is getting more competitive each and every day. And so our government is certainly rolling out more of these initiatives, more of these initiatives. And as we continue to do that through the launch of our economic development strategy a few months ago, our budget that we just released last month, you see our government take more and more focus on improving trade, improving exports and improving business relationships to help your business, your customers' businesses thrive.

Now I just want to also conclude and say that we know the challenges that we're facing are real. We know that they impact businesses, and they know that they are significant. And you feel them every day, even more than we do. We know the best way also as government to overcome challenges is when we work together. It is when we align ourselves as community, as society to work together. When you strengthen and sharpen your pencils working harder with your customer, we understand what that takes. We do that work collaboratively.

And now the story I like to tell in many ways is that, that collaborative spirit is ingrained in us as Manitobans. We know how to work together. You can't spend time and live in Manitoba, in the Manitoba winter without spending time to get up early to shovel your driveway, maybe stop to help a neighbor who got stuck in a rut, all while getting to work on time and working a full day's work, right? Those challenges that we face each and every day that are ingrained in our spirit as Manitobans, the obstacles we have to overcome, are something I think put us in a well position to overcome the challenges and the hurdles we're facing globally and nationally today.

And so as Manitoba continues to be a leader, I encourage your businesses, your business partners to work with us and help us all meet the moment, find success into the future and make sure that at the end of the challenges we're facing right now, we all become stronger by working together. So thank you very much, and I wish you all a wonderful meeting. Have a great day.

Thank you so much. Thank you. Thank you so much, Minister Moses. Next, I'd like to introduce Martti, Martti Aarnio-Wihuri, the Chairman of Winpak Limited, to initiate the formal part of our meeting today. Martii?

Thank you, Scott. Good afternoon, distinguished guests, ladies and gentlemen. I'm pleased to welcome you to Winpak's Annual Meeting of Shareholders. My name is Martti Aarnio-Wihuri. I'm the Chairman of the Board of Directors and your Chairman for today's meeting.

I'd also like to thank the Honorable Jamie Moses for joining us this afternoon and delivering the opening remarks.

Today, we will begin by introducing the head table, David Johns, Interim President and CEO; Scott Taylor, Vice President and Chief Financial Officer; and Mandy Meyer, Board Secretary.

As this meeting is being held in person and via a live webcast, we think it's necessary to set out a few rules for the orderly conduct of the meeting. Questions in respect of a motion may be asked by any registered shareholder or duly appointed proxy holder in the room by raising your hand or online by using the Q&A icon located on the right of your screen. Please note that there may be a slight delay in the publication of communications received online. Questions will appear shortly after they have been submitted. General questions will only be addressed during the question-and-answer period at the end of the meeting. Questions regarding procedural matters or directly related to motions received before the meeting will be addressed during the meeting.

For the meeting today, voting on all matters will be conducted by paper ballot in the room and electronic ballot via the webcast. Registered shareholders and duly appointed proxy holders who have not yet voted will be asked to vote on each business item after it has been presented. For shareholders in the room, please complete your paper ballots. And for those online, register your votes by selecting the for or against buttons next to the name of each proposed director, for or withhold next to the resolution concerning the appointment of KPMG LLP as the company's auditor and for or against for the resolution to accept the company's approach to executive compensation.

For shareholders in the room, please raise your hand once your paper ballot is complete, and today's scrutineer will be by to collect them.

Once the electronic balloting closes, the voting page will disappear and your votes will automatically be submitted. The polls will be open until all motions for matters to be considered today at the meeting have been made and seconded.

We will now proceed with the formal portion of today's meeting. To expedite the formal part of the meeting, I will move and second all motions brought forward.

Shareholders of the company come to order -- of the company come to order. I appoint Mandy Meyer as Secretary of the meeting; and Matthew Wilms as the online moderator of the webcast. For today's meeting, I appoint Elissa Rojo, Computershare Investor Services through its representatives, as scrutineer to compute the votes of any polls taken at this meeting and to report thereon to the Chairman.

I will now ask that the balloting be opened online to registered shareholders and duly appointed proxy holders. The online polls are now open. At this point, all registered shareholders and duly appointed proxy holders who have properly logged in with their control numbers and wish to vote will be able to see on the screen all motions being brought forth at this meeting.

The purposes of today's meeting are set out in the Notice of Annual Meeting of Shareholders of the company dated February 5, 2026. The notice of meeting, the management proxy circular and the form of proxy were mailed to shareholders on March 26, 2026. The audited consolidated financial statements of the company for the fiscal period ended December 28, 2025, and related management discussion and analysis to shareholders of the company who requested such statements and related management discussion and analysis were mailed on March 2. A copy of the confirmation of the mailing is being filed with the minutes of this meeting. Copies of the management proxy circular and other meeting materials are available on the company's profile on the SEDAR+ website as well as on the Winpak website.

I've been advised by Elissa Rojo, today's scrutineer, that there are voting shares representing more than 51% of all outstanding voting shares of the company present. Therefore, a quorum of shareholders of the company is present, and the meeting is properly called and duly constituted for the transaction of business. I received the scrutineers' report, and I direct that the formal report be annexed to the minutes of this meeting as a schedule. I would ask that the scrutineer compile the report regarding the results of today's voting on all business matters.

As the first item of business on the agenda for today's meeting, I will now present to the meeting the audited financial statements of the company for the fiscal period that ended December 28, 2025, together with the auditor's report to the shareholders. Copies of such documents were mailed to the shareholders who requested such statements, and it is not proposed to read them at this meeting.

The next order of business is the election of directors. The bylaws of the company provide that at each annual meeting, the shareholders shall elect directors to hold office until the next annual meeting or until their successors are elected or appointed. At this meeting, there are 7 directors to be elected: Martti H. Aarnio-Wihuri -- Martti H. Aarnio-Wihuri; Rakel J. Aarnio-Wihuri; Bruce J. Berry; Kenneth P. Kuchma; Larry A. Warelis; and Minna Yrjönmäki have been nominated as directors for the ensuing year or until their successors are elected or appointed. Each of the nominated individuals has confirmed that they are prepared to serve as director.

At this time, I ask if there are any questions or discussions on this motion in the room? Ms. Secretary, have any questions been received on this motion through the online webcast?

Mr. Chairman, no questions have been received.

Thank you, Mandy. If there are no questions, I move and second a motion that the nominations be closed and the directors elected for the ensuing year or until their successors are elected or appointed.

The next item of business is the appointment of the company's auditor for the ensuing year. The Board of Directors approve the appointment of KPMG LLP, subject to shareholder approval. I move and second the appointment of KPMG LLP as the auditor of the company until the next Annual Meeting of Shareholders. You have heard the motion. Is there any discussion on this matter?

The last item of business is to consider and approve an advisory resolution to accept the company's approach to executive compensation. Before I bring forward the motion on the resolution, I would like to say a few words.

Winpak continues to be committed to enhancing its corporate governance practices. One of the many ways to satisfy that objective is to seek input from our shareholders on important issues. One of those issues is executive compensation, and we are asking you today whether you are satisfied with our current approach. Although the resolution, if passed, is advisory only, it will provide the Board with valuable feedback in terms of moving forward with this particularly important subject.

If there are no concerns with the company's approach to executive compensation, I move and second the advisory resolution to accept the company's approach to executive compensation. Are there any questions on this motion in the room? Ms. Secretary, have any questions been received on this through the webcast?

No questions have been received.

Thank you. As all motions for matters to be considered during the meeting have been made and seconded, we will now give registered shareholders and duly appointed proxy holders approximately 15 seconds to complete their electronic ballots.

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The voting page will disappear, and your votes will automatically be submitted. Anyone in the room with ballots that have not yet been collected, please raise your hand and Elissa will be by to collect them.

Based on the early voting results, all resolutions have passed. A report with the results will be posted on our website and SEDAR+ under the company profile in due course.

The formal items of business as set out in the notice of the meeting have now been dealt with. I would now like to call on our Vice President and Chief Financial Officer, Scott Taylor, to provide us with a company update and comment on the year just completed. Please, Mr. Taylor.

Thank you, Martti.

Thank you.

All right. Well, it's very exciting to see so many familiar faces past and present today throughout basically my 27 years, thus far, at Winpak. I remember the first time I came to the AGM, I thought the notion of this meeting was fantastic until I found out later on that there was a script. So today, I'm going to try and go off script. For 15 years, I helped Bruce prepare the presentation, and he always wanted me to jazz up the slides, make them pop. For the last 7 first quarters, our EPS kept on going up and up and up. So I've got some big shoes to fill. I'm going to tell you about the Winpak story, where we've been, where we're going. Just some housekeeping here, disclaimer about forward-looking statements, our disclosure policy.

So first, we're going to talk about last year, 2025. Overall, volumes were down about 1%. For the third year in a row, we really felt the impact of inflation, and now there's the impact of GLP-1 drugs where people are simply spending less on groceries. And then if we look at more recent events and how that might affect inflation in the coming months and years, it's another headwind. So we're not getting down on these events that we truly can't control. We're just -- we're trying to figure out how we're going to win and then execute that road map.

So naturally, with volumes going down, EBITDA was also down a touch. We also had some challenges with waste and quality last year. So we've really taken a renewed focus on lean manufacturing within the company, hiring a VP of Op Excellence 2-plus years ago. We also have a new Director of Operations here in Winnipeg, who's going to make a big impact. I'm confident of that. We should always be looking at squeezing cost out of the business. But when you have these different headwinds, whether it's the Middle East, whether it's USMCA, it really sharpens your focus, and we have to do it.

So naturally, with EBITDA going down, our earnings hit as well. We also had a reduction of net finance income from the previous year, mostly because we had a lower average cash balance.

All right. We just released our first quarter of 2026 yesterday to the market. So some similar patterns here from last year, which leads one to think: Is it just Groundhog Day? To which I will say no. The year did start off a little weak, but we did see acceleration in our order backlog and our shipments in the second half of the first quarter. April results have already come in. Those are indicating at the present time, again, more positive results to come. And as I mentioned, our order backlogs are significant.

So with the -- the other thing I want to point out is last year in Q1, we might remember the tariff risk that emerged in early February. And at the time, I think we underestimated how many customers were prebuying. And so when we look at the second quarter of '25, our sales actually went down by $12 million from Q1. So it's not to -- I don't like to normalize results and say, yes, but, but we really need to look at those 2 quarters in tandem. And we're looking at where we're going to be at the end of the first 6 months of this year, and I'm optimistic what we're going to tell you at the end of July.

So because of the drop in volumes, it had an impact on EBITDA, and our gross profit margins were also constricted. This flowed through to net earnings, the volume impact and also the gross profit drop.

One more slide looking back. How do we differentiate ourselves? How do we win? We invest. We invest about twice as much as our competition. And this has really always been our strategy to do it the Winpak way, to not take shortcuts. Our Board of Directors has been very supportive of capital over the years. So if we look at 2023, 2024 and '25, a lot of that is the investment right here in Winnipeg. We'll talk about that more in a minute. 214,000 square feet, about $100 million spent so far on capital with room for 2 more large lines in there. And by the time we're done, we'll have spent close to $200 million, again, making bets on ourselves.

Also my first exposure to [indiscernible]

So this is right outside my office. This is -- we keep talking about it, the North Building Expansion. This is really one of the crown jewels in our portfolio and very exciting. We were renovating our corporate office this year. So we worked out of one of our satellite offices. And we had a budget presentation. So I was at one of our subs, and I had to walk behind the building last October, and I was just, my jaw dropped when I've seen the scale and the scope of what we were doing there.

So inside the building, we have a few photos worth a thousand words, maybe 4,000. So this is the new cast extrusion line. And so to put it into meaningful terms, it's going to have output of about 17 million kgs per year. It's going to have a revenue footprint of about $100 million.

So we also have a lidding facility in Pekin, Illinois. And this is also AI at the back, very green, very nice. So what can we do there? We can expand, towards the top of the picture, about 350,000 square feet. And why are we going to do that? It all comes from servicing the growth that we're seeing in our markets.

So what are we going to house in this facility? Well, the no-brainer right now is die-cut automation, which reduces costs, more modern printing presses, which helps service our customers, cut costs. And then we have some other interesting capital projects to consider, namely extrusion lines to complement what we do in Winnipeg and Montreal. So this would be, in part, a trade play, but the trade is just the cherry on the sundae. It's not driving this investment. So this is something that we're looking at very intently this year. And this would be a multiyear project, probably 3 or 4 years.

A few years ago, well, going back to 2019, we bought Control Group, which is in the health care space. We were there a few years ago because they were running out of outside warehousing space, and it just so happened this building a mile away was on the market. So on a whim, we looked at it, fell in love with it, bought it, upgraded it, and now we're going to put 2 new printing presses in there, a slitter, a rewinder and other equipment. It's a very exciting development.

So what we call IML, so if you think of yogurt containers, you think of sour cream, et cetera, this is a new technology for us. It's in our Sauk Village, Illinois plant, but it's truly adjacent to our thermoforming container product line in that most of those same customers buy IML. And we have a lot of big opportunities that are on the horizon for us right now. We currently have 4 lines in that facility, and we're effectively sold out. So we're considering to what scale and what speed do we add capacity. We can, in the end, by the time we're said and done, have up to 20 lines. So very exciting. This is one of our major growth vectors for the next 5 years.

Sustainability. It's not just a buzzword. Everything we do in terms of product innovation or investment has a sustainability angle. Why? Because that's what our customers want. We need to listen to the customer, sometimes inform the customer, but we're also trying to see where the puck is going. There's been less of an emphasis on sustainability in the U.S. in recent months, years. But the thing that is driving our customers' conversations is what's called extended producer responsibility. The brand owner has to pay a surtax on the plastic that they put out into the world. We had one major customer informed us that in California, their surtax will be about $20 million per year. They are extremely eager to talk to us to see how they can minimize that. The most recent conversation we had with them, that was at least half the conversation. These are some of our products currently that support sustainability initiatives. A lot of that coming out of the Winnipeg plant here, and a lot of it will be produced on that new extrusion line in Winnipeg.

So looking forward, major challenges, USMCA, the Middle East crisis, not to mention some forgotten crises, whether it's Ukraine or Gaza. But people ask me, Scott, you must be wringing your hands with worry, and I say, no, I'm actually more excited than I've ever been about our company. So why is that?

So these are the pillars of our strategic objectives. Any time I talk to investors, they always want to know what are we seeing into the future and how are we going to get there? Our market isn't growing. It's actually shrinking. And if you think of the amount of the population that will be on GLP-1 drugs in 5, 10 years, it's actually pretty scary. So we, again, just need to, I would think, outperform our competition. And that's what we've always done for 50-plus years. So in addition to growing at that rate, we want to grow our profitability at an even greater rate. We talked about sustainability, and those are the core focuses that we're seeking to achieve those goals.

And investors, analysts always ask, how do you rank order how you spend money. We've always put CapEx internal at the top. That's what's driven our growth over 50-plus years. Now more than ever, though, we have an array of acquisition possibilities, not only in North America, but in Europe that will help us round out our product portfolio and our go-to-market strategy and working closely with our sister company in Europe and our Board of Directors.

So when 1 and 2 still leave money left in the piggy bank, we return capital to shareholders. So I think once we demonstrate the growth, the profitability and an acquisition or 2, that the multiple on our shares will accrete. So in the meantime, I'm more than happy to buy Winpak at 6.5x EBITDA every day.

So again, why am I excited? Or what are we doing? We can't control all the uncertainty. So it's that discipline, what we do, what we focus on every day. At first glance, these all -- all 3 of these sound like buzzwords. And so what do I mean by those? Commercial excellence, that's about delighting our customers, listening to them, delivering what they need. If we're wringing our hands every day, you know what they're doing. How are tariffs going to affect your selling prices? How is the price of polyethylene doubling going to affect my selling -- my purchase price from Winpak? Are you going to have enough material to make my product? So it's more than just managing our prices. They need to have confidence that we're not going to gouge them in the current market. And it's all about transparency.

Supply chain resilience. It's all about Randy and his team. At the present time, we're in a pretty good situation, but that is built on years of building our foundation with the breadth of our suppliers, but also how we treat them every day, partners, just like our customers.

And operating cost optimization. This was really fortified during the USMCA turmoil over the last year or so. If there's a 10% universal surcharge on southbound shipments, that's going to have a big effect on our bottom line. And so to counteract that, especially with our expansion in Winnipeg, we want to shed cost out of our business. Of course, every company wants to do that, but never let a good crisis go to waste. So where this helps focus people's attention.

That concludes my presentation. Thank you very much. Over to you, Mr. Chairman.

Thank you, Scott. I'll now open the meeting to questions from registered shareholders or duly appointed proxy holders. Please limit your questions to today's subject matter and keep your questions short and to the point. I ask that any attendees in the room who would like to ask a question, please raise their hands and a microphone will be brought to you. Those participating via the live webcast who would like to ask question, please use the instant messaging feature of the virtual interface to do so. We will answer as many questions as time permits.

When asking a question, please state your full name and the entity you represent, if any, and confirm you're a registered shareholder or duly appointed proxy holder. Are there any questions from the room? We'll now give attendees a moment to type in their questions on the web interface. For each question asked virtually that is answered, we'll summarize the question and read out the name of the person who asked the question and if applicable, the entity such person represents.

We'd also like to remind you that questions that have already been answered or are redundant or repetitive will not be published or answered. Ms. Secretary, do we have any questions from the participants on the webcast?

No questions have been received, Mr. Chairman.

All right. As there is no further business to come before the meeting, I move and second that the meeting be terminated. We now invite you to stay and join us for refreshments and to view the company's product display. Thank you all for coming.