Reynolds Consumer Products Inc.

Gentlemen, thank you for standing by. Welcome to the Reynolds Consumer Products first quarter 2023 earnings call. At this time, all participants are in listen-only mode. After the speaker presentation, there will be a question and answer session. If anyone should require operator assistance, please press star zero on your telephone keypad. Please be advised that today's call is being recorded. I would now like to hand the conference over to your speaker today, Mark Schwartzberg. Thank you. Please go ahead.

Thank you, Operator. Good morning, everyone, and thank you for joining us on Reynolds Consumer Products' first quarter 2023 earnings conference call. Please note that this call is being simultaneously webcast on the investor relations section of our corporate website at ReynoldsConsumerProducts.com. Our earnings press release and accompanying presentation slides are also available on the site. With me on the call today are Lance Mitchell, our President and Chief Executive Officer, and Michael Graham, our Chief Financial Officer. For our call, Lance will focus his remarks on our first quarter performance, progress on the Reynolds cooking and baking recovery plan, and what we are doing to drive results across our business. Michael will review our first quarter financials and our outlook for the second quarter and the full year. Following prepared remarks, we'll open the call for questions. Before we begin, I would like to provide a few reminders. First, this morning's discussion may contain forward-looking statements based on current expectations and beliefs. These statements are subject to risks, uncertainties, and changes in circumstances that could cause actual results and outcomes to differ materially from those described today. Please refer to our risk factors section in our SEC filings, including in our annual report on Form 10-K and our quarterly report on Form 10-Q. Please note that the company does not intend to update or alter these forward-looking statements to reflect events or circumstances arising after the call. Second, during today's call, we will refer to certain non-GAAP or adjusted financial measures. Reconciliations of these GAAP to non-GAAP financial measures are available in our earnings press release, investor presentation deck, and Form 10-Q, copies of which can be found on the investor relations section of our website. Now, I'd like to turn the call over to Lance Mitchell.

Thanks, Mark, and good morning, everyone. I will begin today with comments on our performance today. and what we are doing to drive stronger results across our business. Then I will turn the call over to Michael to elaborate on our results and our guide, followed by your questions. We exited 2022 with strong positions in our categories, restored profitability in three of our four business segments, and implemented a comprehensive plan for returning Reynolds cooking and baking to historical levels of profitability. We executed that plan well in the first quarter, setting the stage for strong earnings growth for the year. We stabilized Reynolds cooking and baking operations by reducing operational inefficiencies. And the other three businesses, Hefty Waste and Storage, Hefty Tableware, and Presto, continue to operate at restored levels of profitability. Before I speak to what we're doing to drive improved results across our business, I'd like to review Ronald's cooking and baking segment more specifically from an operational, commercial, and financial perspective. Operationally, we met our goals for stability of the quarter as we implemented the measures mentioned in our last earnings call, including cross-functional teams focused on critical asset efficiencies, increased technical expertise alongside key production assets, and redesign of equipment reliability processes and practices. We're also standardizing processes across operations in order to further ensure operational stability. We have now entered the next phase of our recovery plan, which is to rebuild margins driven by moderating material costs and improved operational efficiencies. We're also making continued progress in automation and recently installed our second new spooling line in our Louisville facility. Now, while we've hit our goals for the first quarter, we still have work to do to fully restore production efficiencies and our cost position. Commercially, dollar and volume share for Reynolds Wrap is growing, reflecting strength with millennials and other key demographics. We're back to on-air advertising and lifting trade support for Reynolds Wrap this summer, including Memorial Day and Fourth of July. And new products, including Reynolds Kitchen's Stay Flat parchment paper and Reynolds Kitchen's air fryer liners, are expanding distribution, driven by strong consumer trial and adoption. Financially, profits are in line with our expectations for the quarter, driven by Reynolds Wrapped share gains. And we're on track to attain our quarterly earnings targets and a return to profit consistent with historical levels in the second half of 2023. Reynolds Cooking and Baking is delivering against the plan we established at the start of the year, and we're confident we will achieve the plan this year. So now let me turn to what we're doing to drive continued momentum across our entire business. As you know, many consumer staples brands benefited from the pandemic. We participated in that trend, and we've gained additional brand share in 2023 as well. I mentioned the improving share trends for Reynolds. Hefty's share of waste bags also grew in the quarter, and in recent weeks, Hefty has also delivered a solid gain in food bag share driven by innovation. I attribute much of our company's strength to our integrated brand and store brand model, together with our role as a category advisor to the vast majority of our customer base. Syndicated data makes it difficult externally to see how we're doing on a combined brand and store brand basis, but I can tell you We're pleased with our category share trend, as well as our performance within store brands. For example, store brand share of food bags is growing, and our share of that segment is also growing. Investment and innovation are driving strength, and we plan for that to continue. We've increased trade investment consistent with our plan, and the results have achieved our expectations. Trade is driving volume and share, and we will continue to execute our plan to continue promotions around holidays and retailer key events. We're advertising at pre-pandemic historical levels, which represents a higher investment than prior years. Advertising spend was up in the first quarter versus a year ago, and we plan for increased advertising on top of last year's increase versus 2021 levels. This is expected to translate not only into additional awareness, as I mentioned, Reynolds Wrap return-to-air advertising, but also increases in household penetration. In new products, we're strengthening our market position by elevating and expanding our categories while bringing value to consumers through sustainable solutions. Our Hefty Fabuloso waste bags continue to demonstrate momentum, driven by expanding distribution for Fabuloso Lavender and strong retailer adoption of the new Hefty Fabuloso with Lemon Scent. Hefty Energy Bag, our partnership program for recycling hard-to-recycle plastics, continues to perform well and is being rebranded as Hefty Renew. Other sustainable solutions, including hefty and store-branded waste bags made with 20% post-consumer recycled materials and Reynolds Kitchen's air fryer liners made with compostable unbleached paper, are performing well. Our new product pipeline is very strong, so look for more on that whenever you and your families are shopping and on our future earnings calls. Our integrated brand and store brand model is a competitive advantage, and I'm pleased how our portfolio is performing at retail. But consumers are under pressure, and we're watching volumes more closely than ever before for impacts from price elasticity and changes in consumer behavior. We believe our relentless focus on profitability puts us on track for strong earnings growth and financial performance in 2023. With that, over to you, Michael.