Good afternoon. Distinguished guests, ladies and gentlemen. My name is Olivier Muggli. I'm President and CEO of Winpak Ltd, and it is my pleasure to welcome you to Winpak's annual meeting of shareholders. As many of you have seen, we have a special guest today. I'm honored to introduce Mayor Scott Gillingham, who will deliver the opening remarks for today's meeting, as well as present us with a community award. I would also like to introduce James Holland, President of Winpak Division here in Winnipeg, who will accept this honor on behalf of the company. Mayor Gillingham.
Good afternoon, everyone. Thank you so much, Mr. Muggli, and to everybody here today. Mr. Wihuri, and Mr. Holland, to the board, to the shareholders, to all the guests. I am Scott Gillingham. I have the honor of being the Mayor of Winnipeg, and thank you so much for the invitation to join you today as we gather on Treaty One territory in the home and traditional lands of the Anishinaabe, the Innu, Dakota peoples, and the national homeland of the Red River Métis. It is a pleasure to be here today as Winpak marks a remarkable milestone: 50 years in business. Half a century of innovation, growth, and community impact does not happen by accident. It takes vision, dedication, resilience—qualities that have defined this company from the start. When I became the City Councilor for St. James
In 2014, I had the opportunity to begin my work with Winpak and some of the other major employers in the area to help renew the roads in the Murray Industrial Park. It may seem like a small thing, but as a new Councillor, I believed immediately that we need to treat our major engines of economic growth and development with respect by investing in the infrastructure that surrounds their sites, and in doing so, to help support their success. Winpak certainly is a made-in-Winnipeg success story. What started here in 1975 has grown certainly into a global leader in packaging, with 13 manufacturing facilities across North America and over 1,000 employees here in Winnipeg. Winpak's products, of course, protect the things that people rely on every day: food, medicine, personal care products.
What really sets this company apart is your commitment to the people and to the planet. In March, Winpak received the Efficiency Manitoba Sustainability Award, a well-earned recognition for your leadership in energy efficiency and environmental stewardship. Of course, you all—everyone knows that you're growing right here in Winnipeg as well, with a 210,000 sq ft expansion of the Salt Oak Crescent facility. That is a major investment in Winnipeg's future and a vote of confidence in our workforce and in our economy. I can tell you, as Mayor, I do not take that for granted. I thank you for that investment. I thank you for not just your investment today, but for your commitment to building Winnipeg, and our company provided a $100,000 capstone gift to the Grace Hospital Foundation and stepped up as a title sponsor of the Grace Hospital Day.
That kind of community dedication and commitment deserves recognition, and it does not go unnoticed. Today, we also recognize and thank an exceptional individual, Mr. Wihuri, who's stepping down after 50 years as Chair of the Board. His leadership and vision have certainly helped shape this company from day one. On behalf of the City of Winnipeg, I want to say thank you and express our sincere gratitude for your remarkable contributions. Finally, I want to thank everyone at Winpak: the board, the leadership, the employees for 50 years of business success, but also for the role that you play in making Winnipeg a stronger city. With that, it is my honor today to present the City of Winnipeg Community Service Award to Winpak, recognizing your deep impact on our community, on our economy, and on our shared future. I'd like to invite Mr.
James Holland to come and to accept this award on behalf of the company. While he's coming, I'll maybe just read what this award is. The Community Service Award. The presentation of the City of Winnipeg Community Service Award was established by the Mayor's office in the 1950s. This award is presented to give recognition to citizens of the City of Winnipeg who, through their dedication, have demonstrated excellence and achievement in any field of endeavor, benefiting in an outstanding manner the social, cultural, or economic well-being of their community. The awards continue to be registered in the Mayor's office with assigned numbers, the recipient's name, and the presentation date duly noted. This was started in the 1950s, and since the 1950s and all that time, this is only the 337th award being given out.
The other side here says, "Know ye that in the name of and by the authority vested in me by the City of Winnipeg, and in recognition of their 50th anniversary, I hereby recognize Winpak Limited as an exemplary organization whose excellent leadership in the field of community service is gratefully appreciated. Congratulations.
Thank you, Mayor Gillingham. Good afternoon, distinguished guests, ladies and gentlemen. My name is James Holland, and I'm the President of Winpak Division here in Winnipeg. On behalf of Winpak Ltd, I'm deeply honored to accept this Community Service Award. We are immensely grateful for this recognition as it reflects our ongoing commitment to making a positive impact in our community, staying to our vision statement to provide the best packaging solutions for people and planet.
With further investments in Winnipeg, this accolade is a testament to the hard work and dedication of our entire team who strive every day to uphold our values, our contribution to the well-being of those around us. We are inspired by this award to continue our efforts, and we look forward to many more opportunities to support and uplift our community. Thank you again for this prestigious award. I would like now to introduce Martti Aarnio-Wihuri, Vice Chairman of the Board of Directors, to conduct the formal business of today's meeting. Thank you.
Good afternoon, distinguished guests, ladies and gentlemen. My name is Martti Aarnio-Wihuri, Vice Chairman of the Board of Directors and your Chairman for today's meeting. I'd like to begin by introducing the head table, Olivier Muggli, President and CEO, and Mandy Meyer, Board Secretary.
As this meeting is being held in person, submitted online by using the Q&A icon on the right of your screen. Please note that there may be a slight delay in the publication of any communications received online. Questions will appear shortly after they are 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 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 or by 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.
For those online, register your votes by selecting the for or against options 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. 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 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 of the motions. Come to order.
I appoint Mandy Meyer as the Secretary of the Meeting and Matthew Willems as the online moderator for the webcast. For today's meeting, I appoint Elisa Roho, Computershare Investor Services Board Representatives, as scrutineer to compute the votes of any polls taken at this meeting and to report thereon to the Chairman. I will now take a moment to 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 of the 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 28th, 2025.
The Notice of Meeting, the Management Proxy Circular, and the Form of Proxy were mailed to shareholders on April 17th, 2025. The Audited Consolidated Financial Statements of the Company for the fiscal period ended December 29th, 2024, and related management discussion analysis to shareholders of the company who requested such statements and related management discussion analysis were mailed on March 3rd. A copy of the confirmation of the mailing is being filed with the minutes of the meeting. Copies of the Management Proxy Circular and other meeting materials are available under the company's profile on the SEDAR+ website as well as on the Winpak website. In addition, for the attendees in the room, hard copies are available at the registration table.
I've been advised by Elisa Roho, today's scrutineer, that there are voting shares representing more than 51% of all outstanding voting shares of the company present, and therefore a form of shareholder of the company is present and the meeting is properly called and duly constituted for the transaction of business. I have received the scrutineer's report, and I direct that the formal report be annexed to the minutes of the meeting as scheduled. 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 as of and for the fiscal period ended December 29, 2025—sorry, 2024—together with the auditor's report to the shareholders thereon.
Copies of such documents were mailed to the shareholders who requested such statements, and they did not propose to read them at the meeting. The next order of business is the election of directors. Before we proceed with the election of the Board of Directors for the upcoming year, I would like to take a moment to recognize Antti Ilmari Aarnio-Wihuri, Chairman of the Board of Directors, who is stepping down from his role after 50 years of exemplary service. On behalf of the entire board and the company, I'd like to express our profound gratitude for all that Mr. Wihuri has accomplished over the years. His unwavering dedication and commitment have been instrumental in our success. We extend our heartfelt thanks for his years of devoted service and wish him the very best. Now, to continue with the formal business of the meeting.
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 seven directors to be elected: Antti H. Aarnio-Wihuri, Martti H. Aarnio-Wihuri, Raquel J. Aarnio-Wihuri, Bruce J. Berry, Kenneth P. Kuchma, Dayna Spiring, 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 a director. At this time, I will 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?
Yes, 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 approved the appointment of KPMG LLP, subject to shareholder approval. I move and second that KPMG LLP is appointed 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 a motion on the resolution, I'd 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're 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 on 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 motion through the online webcast?
No questions have been received.
Thank you, Mandy.
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 CEO, Olivier Muggli, to provide us with information about your company and comment on the year that's just completed. Please, Olivier.
Thank you, Mr. Chairman. Welcome, everyone, again. Good. Sides are here. Yes, it is the 50th anniversary of Winpak. This is quite a jubilee year for us. Today, I will review our 2024 results and the company's performance during the first quarter of 2025, and I will also give you some insights on the future endeavor of Winpak's.
Winpak's growth in 2024 was a reemergence of the destocking year of 2023 and the expectations that volume would gradually get back to pre-pandemic levels, which for the most part they did, and in a situation where raw material prices were more stable than years before, but price pressure from clients was a leitmotif. We had a period of inflation during 2022 and 2023, and also the fact that many clients, after waves of increased prices, were feeling the pinch from consumers reducing spend or switching to lower-priced initiatives. The beginning of the year, volume was slightly negative but increased significantly in Q2 and then in Q3 with a remarkable 5% volume growth and a bit of a slowdown in Q4, as sometimes happens when closing in on year-end.
Input costs have largely been stabilized to 2024, mostly because of low volumes throughout the industry, providing clients with tailwind for relentless pressure to decrease prices. Certain elements shown here contain forward-looking statements, and while these represent the company's expectations and beliefs, they also contain risks and assumptions, and caution should hence prevail when relying upon such statements. Let's review the 2024 results. Sorry about that. Revenue receded slightly due to input cost reductions. For the most part, as volume grew slightly less than 2%, but varied quite significantly between our different activities. Modified atmosphere packaging continued to grow significantly with 4.6%. Some of the flexibles recovered from the 2023 slump with double-digit growth, and our specialty printing segment also grew in high single digit, focusing on healthcare packaging. Rigid suffered from volume contraction, whereas our machinery business receded by 2%.
It is also worth repeating that because of their outstanding performances, our star products in modified atmosphere and vacuum packaging remained strong, and we're anxiously awaiting the additional capacity from the Winnipeg expansion that I will outline later. The selling price mix was unfavorably impacted by indexing lower input costs to clients, and foreign exchange and taxes also had a negative impact on revenue. Geographically, 80% of Winpak's revenue is realized in the U.S., with 13% coming from Canada, and export sales outside of Canada and the U.S. represent 7% of the total volume. Winpak's current structure is made up of three distinct product groups. Three flexible packaging plants in Winnipeg, one in the Atlanta region, and one in Queretaro, Mexico, account for 53% of the corporation's sales.
Rigid and Lids facilities located in Toronto, Montreal, and Pekin, Illinois, two in the Chicago area and in Mexico, and the specialty printing packaging business acquired in 2019 contribute to 44% of the total sales. The newly relocated, excuse me, packaging machinery business based in the Los Angeles area is products that are 100% curbside recyclable with a paper waste stream. I'll also present in a minute our starch-based initiative, which is called EcoForm. In general, of course, we continue to put a lot of effort, even with sustainable solutions, to downgrade, source-reduce our products. It's good for cost, and it's good from a carbon footprint standpoint. It looks like a lot of R&D initiatives and material sciences, and it's true, but it also means significant capital and equipment investments and also some sites investments.
The green box here in Winnipeg represents the current 500,000 sq ft site, in which we introduced a fourth large extrusion coating line. In the green box, we just added Triflex Laminator to Flexo presses, which are now commercial, and we're adding another one this summer. The construction of the addition of 210,000 sq ft that Mayor Gillingham mentioned earlier is the red box in the picture, as well as underway, and the home for our fifth cast extrusion line and for our reform products, which is a brand new R&D laboratory and a client demonstration center. This investment here in Winnipeg amounts to over $100 million, and the new cast line should be operational in Q1 of 2026.
Beyond that, this expansion is also earmarked to house our first EcoForm line, which will be a large-scale thermoplastic starch line for high-barrier semi-rigid packaging from renewable resources, expected to be themselves carbon neutral. This is a view of the construction sites a year ago and on the right this year. The project is on time and on cost, and the expectation, as I mentioned, is to have the first new cast line in that new building starting up in Q2 of 2025. This line will be another record output line in North America, incorporate new to Winpak and new to the industry technology focused on high-performance, high-barrier films for modified atmosphere and vacuum packaging, with the latest attributes for recyclability, zero waste production, and high performance on our customers' line, and hopefully best performance to cost ratio.
Needless to say, we're very excited by the new technology, and we have a test bench with a re-engineered smaller scale line already in production in Winnipeg to prove the technology. As I mentioned, we added a fourth extrusion coating line, which is now under production and, again, has also the superlatives in terms of speed, productivity, and output. This line of WinCoater products is one, again, where Winpak stands out from a performance-to-cost standpoint, including the new recycle-ready version, and we are definitely market leader both in technology and total cost of ownership. I mentioned earlier that we added Flexographic printing presses and the one on the left, as well as the one on the right on our commercial. As mentioned, we're also going to add another one later this year of a similar kind.
EcoForm is another significant game changer with the introduction of thermoplastic starch as high-barrier semi-rigid containers. This new technology, this new solution, is based upon starch that is a byproduct of potato processing or from the extraction of protein from peas to produce vegan meat replacement, both of which are available here in Manitoba and can be processed into high-barrier packaging material with the use of hydroenergy, which, in other words, means clean energy. We expect this packaging solution to be carbon neutral and home-compostable or biodegradable. Also in Winnipeg, and this is the blue box in that picture, is the site of the bi-axial oriented polyamide line, those BOPA 3 installations part of American Biaxis Inc. This is the largest line of its kind and the most sophisticated, technologically speaking, in the world, and we are nearing its commercialization.
Typical applications for such bi-axial-oriented films range from event balloons, and we have some at the back here, to high-barrier packaging for highly perishable foods, pharmaceutical products, aseptic or retort pouches, where the puncture and heat resistance of polyamide are irreplaceable. Very thin co-extruded structures are intended to help achieve high-performance packaging and yet maintain recyclability. We are also expecting to use this new generation of BOPA film to find applications in new high-tech devices such as lithium-polymer batteries packaging, which have some and some very hard-to-hold pharmaceutical products. There is a picture on the far right of what those batteries can look like. At Winpak Heat Seal in Vaudreuil, Quebec, negotiations are closing on the acquisition of an additional parcel of land adjacent to the existing site, earmarked for a new generation of base material converting line, again, with all the superlatives in terms of productivity and capabilities.
Furthermore, Winpak Heat Seal in Vaudreuil is pioneering a new generation of recycle-ready monomaterial die-cut fitting that enables the cup and the lid to be recycled together and ways to keep the two, the cup and the lid, together and avoid that the lids get lost in a material recovery facility or the so-called MRFs. Both polypropylene and high-density solutions are being offered, and this is, again, another step change in the industry from providing recyclable or recycle-ready solutions. We've also acquired a new site for Winpak Control Group. Winpak Control Group was acquired in 2019. This is the site of our specialty printing, service model, very short lead times, small lot production with 100% inspection, and we need to expand the capacity of that business.
As we have many new business opportunities that we would like to onboard, we needed a new building, which we are now in the possession of, and the board has approved additional print capacity with actually some technology that's, again, new to Winpak and new to the world from a capability standpoint, and that will continue to help us develop that very successful part of our business. At Winpak Portion Packaging, this is the view of the 615,000 sq ft facility in Sauk Village, Illinois. This is a flagship of our Winpak Portion Packaging, our rigid packaging. We have three sites, and a variety of hallmark packages are produced there: retort pet food trays, Pringles barrier pods, and the Keurig coffee pods, just to name a few.
We have successfully introduced our first series of IML In-Mold Label containers in the dairy market and are busy expanding towards another format to be commercialized before the year is over. This investment is creating a lot of new dynamic in the market, and we are working on securing additional significant pieces of business as we speak. Winpak has developed the most advanced technology in this space, which is a new space for us. Furthermore, we're also investing in injection molding for high-barrier co-injected parts for a variety of new packaging concepts that we'll see in the next few sites. One of them—I'm losing my papers here. They just don't want to stay here. One of the family of these new products being FlexPods and SqueezePod, and the entire family is illustrated here, which stem from the combination of rigid packaging attributes with flexible materials.
We call it designed for recyclability and lowest impact. That way, when those packages end up in a material recovery facility, they do not get lost as a flexible package, but they roll around as a rigid one and can be recovered, identified as polypropylene or high-density polyethylene, and therefore recycled. You basically have a much, much lower environmental impact than, let's say, the squeeze bottle they replace or some of the other packages that this solution replaces with up to 60%—excuse me—60% lower carbon footprint, and of course, the 100% recyclable. In this particular case, we are also offering an end-to-end solution with equipment to make the package that our customers can decide to make themselves or buy from us, as well as the filling equipment. We also have an entirely renewable solution and home-compostable solution for our FlexPod family of products.
Another new technology that is part of our rigid business is our so-called barrier spouts and caps , which is a technology that is new to the world, new to the market, new to Winpak, specially designed for food application and basically reduces the rapid oxidation of food near the spout when you have those spouted pouches, those baby food pouches or different pouches with food products, and they reduce the oxygen transmission by 95%. This expands the shelf life significantly compared to traditional spout designs or can avoid having to utilize stabilizing agents in the food to maintain the food quality. Winpak spouts and caps, besides those barrier performances, are also the lightest in the industry, so source reduction, lower carbon footprint, less material.
This advanced pouch technology, together with our recycle-ready pouch solutions, provides enhanced protection but also performance for our food packaging and provides an end-to-end solution to our customers, and all of that being entirely recyclable. The following three slides contain further financial details and forward-looking statements from the company, and they are available for individual reading. This presentation, as well as detailed financial disclosures, are available from Winpak on our website, www.winpak.com. With this, Mr. Chairman, I'm coming to an end of my long presentation, and thank you all for attending Winpak's annual meeting of shareholders, and I bring it back to you, Mr. Chairman.
You know which one? Okay. Apologies about that. Thank you, Olivier, for your presentation. I will now open the meeting to questions from registered shareholders or duly appointed proxy holders.
Please limit your questions to topics relating 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 a 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 your questions, please state your full name and the entity you represent, if any, and confirm you are a registered shareholder or duly appointed proxy holder. We'll now give attendees a moment to type in their questions.
For each question received virtually that is answered, we will summarize the question and read out loud the name of the person who asked the question and, if applicable, the entity such person represents. We'd like to remind you that questions that were already answered or that 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.
None from the room. As there is no further business to come before the meeting, I move and second that this meeting be terminated. Please stay and join us for some refreshments and to view the product display. Thank you.