Reynolds Consumer Products Inc.

Greetings, and welcome to the Reynolds Consumer Products, Inc. second quarter 2024 earnings call. At this time, all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Mark Schwartzberg, Vice President of Investor Relations. Thank you, sir. You may begin.

Thank you, Operator. Good morning, and thank you for joining us for Reynolds Consumer Products' second quarter earnings conference call. Please note that this call is being webcast on the investor relations section of our corporate website at ReynoldsConsumerProducts.com. Our earnings press release and presentation slides are also available. With me on the call today are Lance Mitchell, our President and Chief Executive Officer, and Scott Huckins, our Chief Financial Officer. Following prepared remarks, we will open the call for a question and answer session. Before we begin, I would like to remind you that this morning's discussion will contain forward-looking statements which 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 the risk factors section in our SEC filings. The company does not intend to update or alter these forward-looking statements to reflect events or circumstances arising after the call. During today's call, we will refer to certain non-GAAP or adjusted financial measures. Reconciliations of these GAAPs and non-GAAP financial measures are available on our earnings press release, investor presentation deck, and form 10-Q, which can be found on the investor relations section of our site. Now I'd like to turn the call over to Lance.

Thank you, Mark, and good morning, everyone. Our business is performing well. We had our best second quarter earnings in our history as a public company with the exception of the pandemic-fueled second quarter of 2020. We exceeded our second quarter revenue guide, increasing retail revenue 1% as we outperformed our categories and the categories moderately outperformed our expectations. We continue to drive product innovation and household essentials, providing consumers with new product benefits and expanding range of affordable, sustainable solutions. We continue to recruit Gen Z and millennial consumers who now represent the majority of the U.S. workforce. We identified and unlocked additional revolution cost savings in our ongoing commitment to reduce operational costs. And we delivered earnings exceeding our second quarter and first half objectives, further demonstrating the advantage of our business model and the effectiveness of our people in a dynamic consumer environment. Before I review each business's performance, I'd like to first comment on our retail trends overall, our product innovation pipeline, and our plans for driving revolution cost savings. We drove sequentially improving retail trends in the second quarter and did so in an environment characterized by declines in personal savings, record levels of household debt, and decreases in year-to-date SNAP funding. Our products are affordable and convenient. making eating at home even more attractive when away-from-home consumption is pressured. And we're doing a very good job leveraging our business model and category leadership together with our retail partners. We're also accelerating innovation across RCP, increasing speed to market, expanding the range of brand and store brand products to be introduced over the next three years, and adding to our growing portfolio of sustainable offerings, putting us well on track to achieve our commitment for providing sustainable solutions in all of our categories by 2025. This doesn't happen overnight, and it reflects our success in R&D, upgrading innovation processes, further prioritization of new products, commercial potential, and our ongoing work with our retail partners to deliver on opportunities that consumers value. Considering our trends, our competitive advantages and the programs that we are implementing to continue leading our categories, we expect further moderate improvement in our retail volumes on a like-for-like basis in the second half after adjusting for shipment timing and product portfolio optimization. And in terms of operational excellence, we've identified significant revolution savings beyond 2024 in each of our businesses in the areas of procurement, manufacturing, and supply chain. These savings continue to represent a major source of earnings growth and funds for reinvestment in our categories and leadership positions. I'll now review our performance and outlook by business. The Reynolds cookie and baking business delivered another strong quarter, and we're building on the business's commercial, operational, and financial success. Reynolds graph gained additional share in the household oil category. Reynolds Kitchen's parchment continued to grow, reflecting the strength of the brand, successful innovation, and consumers' increasing usage of parchment for cooking and baking. We drove additional recruitment of younger cooks with our Chef's Kiss multiple product advertising campaign, and we maintained a high level of operational stability and advanced new plans to increase production efficiencies. It is also worth noting that Reynolds is the only vertically integrated aluminum foil manufacturer in the U.S., a significant competitive advantage, providing us with a high level of control over quality, continuity of supply, and cost. Our hefty Impresto waste and storage bag businesses continue to perform well in the second quarter, and the outlook for these businesses is strong. We delivered sequential improvement in our waste and food bag sales volumes, Product innovation remained a major driver of growth, reflecting a number of new products, including the successful expansion of Heptree Ultra Strong with Coastal Plastics, additional Hepti-Fabuloso scents, and the launch of Hepti-Compostable press-to-close food bags. And for our store-brand food bags, BioBay sandwich bags made with 20% plant and ocean materials and half-gallon storage and freezer bags continued the sequential improvement in Presto's volume. Presto is on track to launch a record number of new products this year. Turning now to our disposable tableware segment, the initiatives we put into place earlier this year are proving effective. Volume trends continue to improve with a decrease of 1% in the second quarter compared to declines of 6% in the first quarter and 8% in the second half of last year. The improvement was broad-based, reflecting improvement in plates and party cups, and was driven by a number of factors, including target trade promotions, lower pack counts at competitive price points, increases in cross-portfolio promotion, and the disposable tableware category continues to be under pressure, but trends are sequentially improving, and we have a high degree of confidence in the initiatives we're implementing to drive sales across our portfolios. Before turning the call over to Scott, I'd like to reiterate that our business operates with a competitive advantage by providing both brands and store brands, and we have a high level of confidence in the plans and actions we're taking to continue driving our categories, increasing earnings, and investing in the long-term growth. Scott, over to you.