Graphic Packaging Holding Company

Good morning, everyone. It's great to see all of you here at the New York Stock Exchange. And in addition to all of you here live, we have a large number of investors joining us remotely. I think the number is now 150, but it's climbing. So thank you to everyone on the webcast. My name is Melanie Skigis. I'm the Vice President of Investor Relations. Before I kick it off today for Safety wants you to be aware of two stairwells that you can exit if needed. Directly behind me down the hallway is a stairwell as well as one by the elevator bank. Before we get started, I told you about the exits. The presentation materials you have at your desk, we welcome you to walk through those with us today. On the webcast, you'll see it in the webcast view as well as a PDF is available on our investor relations website. The presentations this morning are being recorded, so they'll be available to listen in replay probably later this afternoon. We have a great agenda for you this morning. You'll be hearing presentations from senior leadership. We're going to kick off with two, and then we'll go into a 10 minute break. When we get back from the break, we'll have three more, and then we'll have a Q&A session. During the Q&A session, the remote participants, during all the presentations, you're welcome to go ahead and submit your questions. You should see a prompt in the lower right hand screen of the webcast view. WE'LL BE DOING QUESTIONS LIVE FROM THE AUDIENCE HERE AND THEN WE'LL JUMP OVER TO SOME OF THE QUESTIONS FROM OUR REMOTE AUDIENCE. FORWARD LOOKING STATEMENT. I ENCOURAGE EVERYONE TO READ THROUGH THIS. OUR PRESENTATIONS TODAY WILL CONTAIN FORWARD LOOKING STATEMENTS THAT WERE SUBJECT TO RISKS AND UNCERTAINTIES THAT COULD CAUSE these statements to not come into reality. So please look through the list of risks, and they're also available in our filings with the SEC. And with that, I'm going to turn it over to our first speaker today, Mike Doss, our president and CEO. I'm sure most of you are familiar and know Mike. He's been with the company since 1990, has been our CEO since 2016. And with that, I'll turn it over to Mike.

great thank you melanie and i also want to thank alexandria who's over in the corner here as all of you know it takes a lot of work to pull together one of these investor days they've been working really hard to pull things um all the materials together that you see today and we're going to cover so thank you guys for all that i also want to acknowledge mike ryan one of our senior designers who is uh drove all the way down from philadelphia a lot of the samples you see here today out in the lobby. So Mike, I don't know where you are. Wave your hand. Thank you very much for doing that. Much appreciated. I'm going to start with a few comments around a few announcements we made last night, and then I'll jump right into the presentation. Then I'm going to introduce our speakers that you'll see today. Then as Melanie said, we'll go through that cadence and ultimately, we'll have a few breaks in there. Then I'm sure there'll be a very robust Q&A session, which we're really looking forward to. Let's start by talking a little bit around the first announcement that went out last night, and that's the sale of the Augusta Mill to Clearwater Paper Company. Now, what you need to know is that really over time, Arson Kitchen and I have had a number of conversations around... kind of the overall fit of some of the mills that we've got. And for them, in the vision of the future they have for their company, it became pretty clear that the Augusta Mill, which is an outstanding mill with excellent people and a very good infrastructure, is a better fit for them in what they really want to do over the long term than it is for graphic packaging. And so as we kind of went through those dialogues, we worked through a deal. You saw it announced last night. We're happy to go into whatever level of detail you'd like to do in terms of talking about that in the Q&A. But the reality of it is for graphic packaging, The Augusta mill, the Augusta manufacturing facility, didn't offer the same strategic benefits over the long term as some of our other wood fiber manufacturing facilities or our recycled manufacturing facilities. So it was the right thing to do for our shareholders to monetize that, which we'll do. And again, we'll talk a lot more in detail about what that means during Q&A. Second thing I want to hit on real quickly, and there was a few questions I got in the lobby here, was the pricing declarations from RISI over the weekend. And many of you know, because I've expressed a fair amount of frustration on this over time in terms of how they do it, and I can absolutely tell you that on Cupstock they got it wrong. We're in that market every single day. It's one of our strongest markets. If you look at over the last three years, what we've done with our food service business, it's grown every quarter, and it's growing here in Q1. So that made no sense to us. It's 180 degrees out from what we're currently experiencing. And really, you've heard Steve and I talk about this. It just strengthens our resolve to continue to move away from third-party indices that really lack any level of what we believe to be accuracy as well as transparency. So over time, third-party indexes that really aren't accurate or have transparency hurt packaging companies and they ultimately hurt the customers as well. So we are going to strengthen our resolve to continue to march away. We've been doing it for a number of years. It's one of the reasons why several of the analysts in the room, you guys have had difficulty trying to track our pricing because we've been moving to a more value-added pricing model, which we'll get into a lot of detail today in terms of how we look at that. And it's going to continue to be the case. So third party indices will be an increasingly smaller part of our business going forward. And our resolve is very high to make that happen. So with that as a backdrop, I'm going to pivot now and talk a little bit about our overall results, which also were released last night. Look, by any measure. If you're a consumer goods company last year, food, beverage, or just actual goods, it was a very challenging year, as consumers really pivoted in terms of their preferences in some cases. And our customers had to adapt to that on a real-time basis. It really resulted in a fair amount of inventory destocking, which is well chronicled. You're all aware of that. And against that challenging backdrop, graphic packaging held up very, very well. You see our results here on the page. I mean, a few high levels. Our sales were actually flat on a year-over-year basis. We had $200 million of innovation sales in that number, and our value-added pricing actually more than offset the volumetric decline that I talked about, which for the year was about 4 percent. Third and fourth quarter most pronounced, down around 5.6 percent. Steve will get into those numbers a little bit more detail. But what we're really encouraged about here going forward is the fact that as we've rolled into 2024, our volumes actually to date through today are flat on a year-over-year basis, which is actually a very good thing because as you recall, last year in the first quarter, we were actually up. So we've seen some stabilization. The fourth quarter was really most pronounced in the last probably three weeks of December. It was almost like many of our customers just threw in the towel. That really manifested itself in Europe in a big way. We saw volumes that were down the last three weeks pretty substantially and they bounced back really well here to start the year off. That's what really gives us confidence in the year and a return to organic growth. But what I would also say, and you're going to hear this thematically through my conversation, is that our confidence is really more in what we do control versus what we don't. If you think about graphic packaging, and I'll go into a lot of detail on this, we're just a fundamentally very different company than we were just a few years ago. Our innovation is wide and deep. We'll spend a lot of time talking about that. Our customer relationships are strong and growing. and we're managing them different than we were before, and we're getting paid for the value that we bring. So with all that as the backdrop, I'm really pleased with the results that we generated. Our EBITDA was up almost 20 percent on a year-over-year basis. You see EPS that on adjusted basis is approaching $3. Remember, in 2019 when we talked to you about this, it wasn't even a dollar. So we've made dramatic progress in a very short period of time, and that momentum I expect to continue to move on. Look, graphic packaging is a leader in sustainable consumer packaging. You all know that. And you really touch our products every day. So think about the cup of coffee you have in the morning or the cereal box that your cereal comes in, the snack you have at lunch, maybe a frozen dinner you eat in the late afternoon, soft drink that you may have as an afternoon snack or hopefully a beer you have later on in the evening. All of those things are things that we do. You literally touch our products each and every day. It's rare that a U.S. consumer of almost any demographic doesn't in some way use our products within a 24 to 48-hour period of time. That's the reach that we've got at Graphic. We really do package products. you know, life's everyday moments for a renewable future. Thematically, you'll hear us talk a lot about that. And again, that's what gives us a lot of confidence in the company that we've built and that the one that we will build over the next, you know, seven years as we roll out our Vision 2030 here to you today. Look, you see our 100 facilities we've got around the globe there. We package thousands of different customers, but we also do it with some of the biggest brands in the world. In order to do that, you've got to have scale. You've got to make investments. Investments are much more than just physical assets. Yes, we've made those. A lot of those were done as part of our vision 2025. Think about the investment we made in Kalamazoo. Think about the investment we're making in Waco. Think about the investment we made in A&R. All of those were foundational to build the company that we have today. What you're really going to see and what we're going to talk about here is just how that will be leveraged as we bring 2030 to life, our vision 2030 to life here. The investments in people and capabilities sometimes are much harder to see than the physical assets, but they're very real and they're very important. You'll see our speakers really bring those to life today with their comments as well. OK, look, that's an impressive customer portfolio by anybody's definition. The depth and breadth of that is really unmatched in the paper packaging world. You take a look at really all the different segments we're in, and we've chewed those up now to really reflect the overall impact of ANR packaging at the year-end and what those sales are. So some of you may say some of those are slightly different. That's really what we did there. But our customer base is really as diverse as our innovation portfolio, and that's a big point to make. It wasn't that way just a mere few years ago. I'm going to show you that translation from one side to the other as we transformed the company over that period of time here in a few minutes. Look, we've got a strong presence in the at-home markets. That's always been kind of our core. It's gotten stronger over the last few years. You see that in food, beverage, household products, health and beauty. All those things are strong businesses for us. But we also have an increasingly strong and growing position in the food service part of the market. And really, one of our key themes that we're going to try to strike home today, and if I do my job right, I'll probably hit it on about five times, is just how our portfolio moves with the consumer. That's a big part of what we purposely built over the last seven years. All right, a little bit about our speakers today. In addition to getting Steve, who many of you, all of you know, I should say. You probably know Steve better than anybody. Steve will come up and chat, but we've got three other speakers that are actually going to present today. The first one that's going to talk to you is Maggie Bidlinmayer. She is our Executive VP and President of our America's business. So Maggie really controls and manages those relationships with the customers that I'm talking about, and they've changed and evolved very dramatically over the last few years, a lot under Maggie's leadership. She'll talk to you about how we're building deeper relationships with customers than we've ever had before. And that's really foundational relative to the innovation that we're driving and the sustainability benefits that we bring that are valuable to customers in ways that we couldn't even have those in conversations with them because it was just kind of a bid-ask situation. Not anymore. So Maggie bring that to life. She leads our global innovation effort. Ricardo works for her. ricardo where are you right there hi ricardo many of you know ricardo uh and so she'll actually give you a lot of insight and more depth into what we're really doing there too we have john francois roche uh also here wave your hand john francois um john francois i would challenge you to find a more knowledgeable person in terms of the breadth of experience he has in the european market than john francois He is an expert in that market. He's chaired the ECMA organization for the last three years, so that's the European Carton Manufacturing Association. His knowledge around regulation in the EU, as well as our large brands in Europe and the retailers, which is really important in Europe, and the intersection to the consumer are unmatched. So he'll do a town hall, and we'll bring some of that out for you, and you'll be able to ask him a lot of questions later on. Look, Europe is a great business in and of itself, but what we really love about Europe is it's the most sustainable economy consumer in the world. So what that really allows us to do then is to take all we learn in Europe and export it all over the rest of the globe where we compete, including North America. The trends there, as we like to say, start 24 to 36 months before they wind up here, but almost invariably they wind up here. We have that knowledge and we're able to take advantage of it much faster than many of our competitors are able to do. We think that brings real strategic advantage for us. Mark Connelly is our newest member of the team, but he's not new to graphic packaging, certainly not to Steve and I. For the last decade, Mark has followed our company as an analyst. And I would also say, and I think Steve, you'd agree with me, that one of the analysts that really helped us frame some of our thought process relative to capital allocation and challenge us along the way, are you making the right decisions? Are you putting money to work to really drive ROIC? He's a key architect of what you'll see today in terms of what we're rolling out. We're thrilled to have you on the team, Mark. Mark will facilitate that town hall discussion with John Francois. And we have Michelle Fitzpatrick up here in the front. Michelle. leads our sustainability efforts. You'll get a presentation from her that'll talk about all the different things we have to do to make sure we're compliant in terms of sustainability and regulation that's constantly evolving and changing. The good news is she will lay a plan out that you will be able to see that we actually have between now and 2032 to achieve all of the goals that we made for our SPI, Science Based Target Initiative goals that will be out there today. I challenge you to challenge any other packaging company to drive a proposal or to lay something like that out, like we're going to lay out to you today. We're going to deliver on that and it's really important because what you'll also hear from me today and talk a lot about from the speakers is, you'll hear from the speakers on this, is that not only are we going to reduce the amount of greenhouse gases we generate, the amount of fossil fuels that we use, the amount of water that is used in our facilities. Ultimately, almost every product we make helps our customers meet their sustainability goals. I'm going to say that again. Every product we make helps our customers meet their sustainability goals. Not very many people can say that. That's also one of the things that gives us a lot of confidence. in our ability to grow our volumes over the next few years and really be a key part of the consumer packaging leadership position that we want to have because we're at that intersection. They need us to do that. You think about the ambitions they've laid out, some of the targets they've put out there to be greenhouse gas neutral or carbon neutral by 2040 or 2050. They need people like Graphic Packaging to help them bring that to life. And we'll be able to do that. What I'm going to do now is actually lay out the from to where we were, give you a little context on background in terms of the transition we've made over the last seven years. Steve will come up later on in the presentation, bring the financial targets to life in more detail. He'll also talk about the large amounts of free cash flow that we're going to generate and the optionality we have for value creation over the next seven years, which is pretty exciting. OK, let's take a little step back. Look, many of you were here in September of 2019. And thank you for that. When we rolled out our vision 2025, it's hard to believe that's almost been five years now. And a lot has happened. If you think about it, it's really been pressure tested over that period of time. And for us. You know, that really was an opportunity to kind of revamp our growth and our ability to actually, you know, compete and transform the company. And, you know, as you look at the company we have today, it's just very different than what it was in 2025. And, you know, as we look at some of what we're laying out with Vision 2030, some of the targets that we had for Vision 2025 are no longer ambitious enough. and in some cases not as completely aligned with really the company we need to be and will be over that period of time. So we'll introduce Vision 2030 to you today, but maybe it's helpful to take a little bit of time a review around this journey we've been on really since 2017. So if you think about 2017 for graphic packaging, who were we? I'd been CEO for, you know, one year. And the reality of it is, is we had a solid business. We had a good business in North America. We had a decent business in Europe, primarily focused on, you know, beverage. In the U.S., it was more center of the store type stuff. We had a good position on, you know, recycled, you know, paperboard as well as unbleached paperboard. We had a business in Asia that was principally focused also on the beverage business. We had high customer concentration and our markets were also pretty large. If you think about beverages and examples as a percentage of our overall customer concentration, it was quite high. There were starting to be some signs in the European market that sustainability was going to be something that could be an opportunity for us. In the US, not so much yet. Yet, we had a very big problem. Our problem was that we weren't growing, we weren't generating any real growth, and our margins really were quite economically sensitive and really more commodity-based through a cycle. So that impacted our ability to really drive long-term sustainable shareholder value. Think about that for a minute. So what we were doing for customers was making a highly personalized branded product with excellent printing, in many cases, coatings, specialty thinning, unbelievable delivery terms, and yet in many cases, we were getting paid less because of the terms we had and the way the industry operated at that time than really what even a corrugated box was able to get. which is generic as it comes, right? So we had to change that. That was a key initiative for our company at that time. So we looked inward. What are the levers that we could pull? We saw this trend around sustainability. We knew we had to invest in innovation. We also looked at what would we have to do to expand our customer profile so that we reduce the amount of concentration we had with some of our largest customers, as well as we had to make our portfolio move more with the consumer. We didn't know exactly how we were gonna do it, but we knew it needed to be done. And then we started doing some work as far back as then around what we thought would be a pretty interesting value creation idea for a large investment in coated recycled paperboard. And so that is the backdrop. You wind the clocks forward to 2018, we had the opportunity to partner with International Paper and get their consumer packaging business. That was a huge deal for us because it gave us a whole bunch of options we didn't have then. And so, you know, it was a great transaction. I think IP would say it was great for them. It turned out excellent for us. Keep milestone for us. 2019, we rolled out our vision 2025. And our vision 2025, you know, was broad in a lot of ways and to be transformative and has exceeded our expectations in many ways. If you think about the financial goals that we took, targets we put out there. We've largely exceeded all of those and then some. I went through some of the results today. I think Steve is an example. We had $2 for EPS, which obviously we've well since surpassed. So a lot of those targets were done. We made real good progress on the other non-financial goals as well. But again, many of those targets just aren't ambitious enough or consistent with how we want to run the company going forward. But what I would tell you is that within Vision 2025, there were really four main objectives we laid out there. First, we knew we had to expand our innovation capability in a big way because we wanted to take advantage of being able to leverage the sustainability movement, which was now starting to take place here in the U.S. too. Our speakers will talk a lot more about how we're doing that on Vision 2030 today, but that was a key initiative for Vision 2025. We had to realign our portfolio to move more with the consumer, which meant that we had to make some acquisitions of different businesses that would allow us to actually do that. We had to capture more reasonable value for the reasonable share, I should say, of the value that we were providing to our customers. We had to invest in both our people and our assets. So those were the big things that we laid out there. If you look at Vision 2025, I think there were 21 targets that we assigned to it. But there were really four big things, strategic steps that we took that transformed our company during Vision 2025. The first, and I mentioned it already, was the IP consumer business. That was big for us. Because if you think about it, we had no exposure of any scale to the food service business, which I think about Americans, they love mobility, they like being on the go. We didn't have exposure to the drive-through window. We didn't even make a cup. So you put that all together, that created huge optionality for us in a whole new part of our business that we didn't have before. Secondly, we need to grow our US and European manufacturing capabilities. What I mean by that was we put out a target as part of our Vision 2025 in terms of integration. Integration back when we laid out Vision 2025 post the IP acquisition was around 67 percent. We finished this year around 80. So we've kind of grown that integration. But integrations really more was a yardstick for us in terms of how we measured. There were two things that we were really looking for in terms of building out our business and how we wanted to invest in it. First, we wanted to acquire businesses and markets that ultimately moved with the consumer different than what our core business did. The most recent example I can give you of that is Bell. Maggie and her team have integrated that business now well into our business, but Bell brought consumer mailers. That was something we didn't have before. If you look at the prior 10 different acquisitions, every one of them brought something along those lines that helped us build out our portfolio and I'll show it to you in a minute. and why it's transformed the way that it has. Secondly, and importantly, any business that we could find that had innovation capabilities that we could lever across a wider group of customers, both domestically or internationally, was prioritized. The best example I can give to you of that was AR packaging. It was an absolute home run for us. Yes, it was a good business in its own right, And it helped us get into Eastern Europe and build out our portfolio in a way that we couldn't do on our own. But they were excellent at driving innovation and had a lot of new products there that you're going to see us profile today that have allowed us to really scale across the globe. And that's really what we need to be able to do as a consumer packaging company. So those two things were really what we were looking for there. Our customer relationships had to change. As I mentioned earlier, we bring more than just basic design elements and manufacturing. That's what we were getting paid for before because that's what we were charging them for. But when you think about the security supply we bring, the sustainability benefits, the innovation benefits, our customers know that what we bring is more than just raw materials and freight. I had a boss one time who said, you don't want your product to be treated like a commodity, stop acting like it is. And that's really what we did. And so we put this value-based pricing methodology in place. You guys know we've done it because the pricing is flowed through our P&L in a way you can't follow based on just movements of paperboard. Maybe you go in a lot more detail there. So that balance is much more important for us going forward. and something that is kind of core to our DNA, and you'll see us continue to leverage that as part of our vision 2030. Lastly, we saw a significant opportunity to generate an unmatched cost position in the most attractive part of the paperboard packaging market, and that is really the recycled packaging. CRB. And when you look at what we've done with Kalamazoo and the startup on that, it's been nothing but a home run. Cost positions unmatched. The grades that we have come off that machine are fantastic. And it's integrated well into our business. And we're leveraging those opportunities with customers as we speak. So listen, all of that really transformed the business very dramatically. And what I'm excited about with Vision 2030 today is that now as we lay this out, our ambitions will line up more with how we're running the company and give you a framework so that you can hold us accountable going forward in terms of what we're going to do. Very exciting for us. Now, I'd like to tell you that everything we did with Vision 2025 really worked out the way we thought. We executed perfectly, there were no mistakes, but there were some things that we learned along the way there that really have helped us. Of course, this was September 2019, we dealt with COVID during that middle period of time. But even before that, we started having conversations with customers around innovation. We had some early success, and what ended up happening is customers would say, look, you did this good for us, so why don't you do these two or three things too? So we had to scramble in many cases to add resources back into the company, something we did. Those are resources that are now part of our business and part of our innovation engine that you'll hear Maggie talk a lot about. We also learned a lot of things during COVID. Some of them were just hard. The first one I'll point out to you was just supply chain resiliency. I mentioned earlier that our customers care a lot about security of supply. More now than ever, the worst thing you can have if you're a CPG is to have a stock outage. And our system had been optimized because for years everything just kind of flowed nice and we were able to take costs down to the last penny and our supply chain was long and expansive. You go through COVID and then you add winter storm Urien in February of 2021. and we had a lot of challenges. A lot of force majeure letters, things we had to deal with. We had to build a more robust supply chain. For a company that prides itself in execution, we took that seriously. Those are learnings that we will not forget. Our customers know it too, and that is a part of what they buy when they buy from Graphic Packaging. Also during COVID, we saw these massive shifts in overall demand. Casual dining went way down. And after about a month or two, you saw the food service side of the business really take off. Center of the store kind of came back. And again, we had run this kind of perfect ballet taking facilities down and optimizing our footprint to the point, our customers had some doing in that as well because they were pushing us for obviously savings and things there as well, which is to be expected. But we learned that we got to have some flex capacity so that we can take care of customers' demands as they shift, and they will shift based on different demand pulses that they have to deal with out there. So you'll see us not have everything on three shifts. We're going to have some flex capacity that allows us to be able to do it. We're not going to run everything seven days a week. because it doesn't give us the ability to manage our business. We have 100 manufacturing facilities, and the balance on that will be reflected there. Sure, we'll have some that run seven days a week, 365 days a year, but there's going to be a number of them that have that flex capacity. We also learned some things by spending $700 million in Kalamazoo and essentially making and creating a brand new mill. We went into that project thinking it was going to be totally an economic play. That's how we introduced it. We said, look, we had this unique opportunity to be able to take a bunch of cost out and drive a lot of really top line product through the marketplace. And we were uniquely positioned because of the concentration we had with our Midwestern manufacturing facilities of paperboard. But what we really found, we got those savings, but what we really found there was the grades and the quality coming off that particular manufacturing process just superior to anything else that's out there. You've heard us launch Rainier. Rainier is not even in a lot of the numbers you're going to see today. I think it can be bigger than many of the innovations we have out there. It will compete with the very best paperboard out there in SBS as an example, the brightness, the coding characteristics, the smoothness, it's fantastic. And we've got some early wins there. Maggie will talk about that when she's up during her conversation. The point to make that around integration though, and this is an important point to make, is integration for graphic packaging is a bit nuanced. And this is important. If you think about what we're doing in Kalamazoo and you think about what we're doing in Waco, If we have the opportunity to really grow with customers and generate excellent ROIC and consistent returns for shareholders, we are all in on integration. I'm going to say that again. We are all in on integration. When it makes sense, consistency results in higher ROIC. However, when we don't have a path to do that, like I just outlined with Augusta, then we're better off putting that capital somewhere else. So you'll see us put our capital where it will get the greatest return for shareholders, hard stop. So you're not going to hear us talk a lot about our integration rates anymore because we're really focused on our end-use markets. We're a consumer packaging company. But ultimately, that's how I want you to think about our overall integration strategy in terms of how we're building the business here going forward, and that's exciting. And the implication for that really kind of comes in the form of, you know, if you think about A&R packaging and that acquisition we made for a minute, we got a lot of questions from a number of people, hey, are you guys going to integrate, you know, with AR? And Steve and I answered it this way. At the time when we acquired that, we said, okay, You know, we have no plans to immediately do that, but over time it could provide some optionality. The reality of it is, is as we've gotten deeper into this and we've watched our European business, which generates outstanding results and excellent ROIC, we don't need to integrate that business right now. And it doesn't make sense. Things would have to change very dramatically for us to see a scenario where we would have to backward integrate into Europe. And that's a big change. And I think the points I'm making on these things we've learned through some of the things that we've come through is we form our opinions based on fact and how we actually generate returns for investors and shareholders over the long term. And that's really why you want to buy a company that is constantly learning in that regard, and that's graphic packaging. So I want to talk a little bit now about the company that we've actually built from the inside out. And I think if you look at the left-hand side, I think it's, yeah, the left-hand side that you're looking at there versus the right-hand side back to 2017. It's a completely different company. Look at that for a minute. Look at the different segments we have. And I talked about that March we were on and why we had to build the company out the way that we did. our market participation strategies have just changed. We went from 4.4 billion to last year 9.4 billion, and we're going to build on that. Ultimately, if you think about that growth, some of that came from acquisition, some of it came from innovation. We averaged about 2 percent sales growth over that period of time in our core markets, and compare that against any other packaging substrate out there, whether it's glass, aluminum, corrugated, that's on par at the very best. And it's really all driven by the innovation we see. And what you can see there, and what I'm excited about, is our ability to move with the consumer. As the consumer moves, we'll be there. And that's the portfolio that's really been generated in what we have. We have the scale to take care of the very biggest customers out there. If you're a QSR operator and you have 7,000 stores, in North America, you're probably going to do business with two, maybe three packaging suppliers. That's it. You don't want to do it with 27. Why? You can't control the quality. You can't control the materials there. And we have the breadth in investment and the capabilities to take care of the very largest customers, as well as take care of the regional business that we have. We're uniquely positioned in that regard. That's the company we've built over the last seven years, and it's really going to be on display over the next few. So let's talk about what we're doing and why. You know, the bottom line is our core values have not changed, but we have, as we've transformed the business, our aspirations have grown alongside of our confidence. And that's just... As you look at how that all comes together, I'm going to introduce you a number of key elements of our Vision 2030 right now. The most important one, we start with this one here, is really all around innovation. To be a global leader in consumer packaging, you have to be a leader in innovation. And we're going to continue to invest in our people and our capabilities so that we're the very best. Our vision 2025 laid out some pretty big investments. I've already outlined what they were. But what will really define us with our vision 2030 is the investments we've made in innovation and the people and capabilities that we execute on the scale that customers require. We've set three targets for this one, and they're ambitious. The first one is... 2% of our annual sales growth will come from innovation. We've done that over the last two years. You think about 2022 and you think about 2023. Both those years, we grew over $200 million in innovation sales under very different market conditions. So we've demonstrated the ability to be able to do that. We're pushing our teams to continue to find ways and to build that funnel. And our confidence level here in 2024 to deliver the $200 million is high. You think about the selling cycle for us, many of those things are already in the queue. And so we know exactly what they are and they're flowing through. And Maggie will talk about that in her prepared remarks a little bit as well. Look, every new product we make needs to be more circular, functional, and convenient than the existing product that it's replacing. This is nuance two. I mean, there are certain things from a material science standpoint that obviously have to be met. But it's also pretty simple in many ways. I've yet to ever have a customer say, hey, thanks for making that product that's less sustainable, less convenient, or functional. They just won't do it. They won't put their customers into that. So that's kind of the lens we put against. And all these things are iterative. They help us get better over time. Then, the last one that I will put out there is that our multi-generational portfolio is really iterative too. What I mean by that is if you think about things like KeoClip as an example, that product started over in Europe with carbonated soft drink. And then it moved quickly to beer. And it also went to some food applications. And each time we did one of those, we learned some things different. In that particular case, we also made the machines that went into both those applications. Our Bordeaux product, which you saw out there, started with infant formula. And now it's gone to confectionery, gum. You see the Mentos out there as well, as well as coffee. And again, Maggie will take you through that. And that's really important, that iterative learning that we get there, and why it's so important we have a big business in Europe and in the US, because those trends go back and forth, and we take that knowledge, and we can do that a lot faster. And that's what a leading consumer packaging company does, and that's the company we have built. Culture. Look, to be a leader in innovation, I can't overemphasize the importance of culture. We've got an incredible team, and we've done some really good work. But to stay the best, we're going to have to continue to focus on our culture of safety, inclusion, and take our customer focus to a whole new level. This is among my highest priorities as the CEO. We've set four targets for this one as well. Zero life injuries is up first. Look, I'm proud of the safety record our company has. It's by far one of the best in the industry, but we need to make it better. And that really starts with me and my executive leadership team and the tone and tenor we set from the top. We invest in well-run facilities. What we do is incredibly important, but it's never important enough for someone not to go home whole at the end of the day. That's something we take real seriously. And as an investor in graphic packaging, you can rest assured that we do it the right way there. We also really need, second bullet point here, 75% engagement score. So you say, why is that important? It really comes down to the fact that, again, those 24,000 employees that we have, we have to have their very best every day. They come with ideas. We need them. We need them to get better. We need them to get better in safety. We need them to get better in terms of productivity. We need them to get better in terms of innovation. And when we harness all of that and can kind of bring that forward, they're proud of what they do. They bring that energy to work. They're part of a winning company, and it's infectious, and it really helps us drive our results. So driving that is something that Elizabeth Spence, who is right there in the purple, who leads our HR organization, she and I work on all the time. So... The other part of that that I'll also say is women in leadership is something that is really important for us at Graphic Packaging. Right now, our women in leadership is around 25%. We're going to take it up over 35% over this next seven years. It's an important element for us. We get a lot of information. You think about what that's like in my staff room. We have a staff meeting, and it's kind of funny, and I joke about this sometimes, is You look at women in terms of many family units out there. They're the largest population in terms of making decisions around purchasing decisions as well as provisioning for families, and they're part of the family. And, you know, I'll be railing on something I joke about and I say, well, this is, and I'll look over and Elizabeth and Lauren and Maggie might be laughing. They're like, it really doesn't work that way. And that's important for me to know. And it's important for all of our business to have insight like that because it helps us get better. It helps us stay, you know, very close to the consumer. And that's insight that helps us drive our innovation. So it's a big goal for us. Our ethnic diversity, we want to make sure that that's representative of what we see in the US, around 40%. We've made good progress on that over the last few years. We have more work to do. Some of our locations are harder than others, but this is an important goal. We want a very inclusive company. And it's one that, again, when we have that level of inclusivity and that diversity, we get better insights into what is going on in the marketplace and what we can do to take advantage of it to service customers better. Last bullet point here is really enhancing the communities we operate in. This is really important. We've got 100 facilities around the globe, and what we want is that logo to mean something in each one of those towns. Of course, our employees are proud to work there. We want the community to be glad that graphic packaging is there. You know, that it's seen and has a reputation as a safe, sustainable company that invests in its employees and in its facility. When we have a job opening, we want many people to apply because that's a place where ultimately we want to, where they want to work. So that's a key focus for us. We've made progress in this regard. We're going to make more as part of our Vision 2030. Transitioning a little bit here to planet. Consumers want more sustainable, functional, and convenient packaging. I talked a little bit about that. And our brand owners and retailers know that we can deliver it, and so they're coming to us more and more. Our commitment to you and to our customers and all our stakeholders is to steadily and measurably improve our environmental footprint of our consumer packaging. And really, as I said earlier, why is this so important? Because it's not just reductions that we're driving in our business, but ultimately what our customers need in order to hit their objectives and our goals. Our packaging helps them accomplish their goals and the commitments they've made out there. And that's what a true consumer packaging company does that's in a leadership position. It's a responsibility we take very seriously, and we've got a high level of confidence that we can hit the plans and targets we're going to roll out to you today. We have four targets for our footprint. First one up is to hit our SBTI targets. And you're going to see Michelle take you through a very detailed look around exactly how we're going to do that. And a big part of that for graphic packaging is the decarbonization effort of our wood manufacturing facilities. It's about 75% of all the electricity that we make, as an example, comes from those operations. Right now, that particular part of the business is around 67% we make our own. We're going to take that number up over 90%. And all that's reflected, the investment that's required to do that's all reflected in the targets you're going to see today. We're really excited about that. Again, that helps our customers hit their objectives. And as all of you know, the materials that we make tend to be some of the most recyclable out there. They start with trees. They go through our wood manufacturing facilities. And then we're able to recapture them anywhere between five and 10 times. So it's a circular loop that truly does have us sitting at the prominent spot on a circular economy. And that's exciting. The remaining electricity that we don't generate ourselves, we're going to find ways, which is kind of a hedge more than anything else, to buy renewable energy. There's a lot of ways you can do that. We're going to do it in Europe. We're going to do it in the US too. But the big part of it, I want you to walk away from, Michelle will walk you through this, is just how we're going to do this ourselves with our biggest spend, which is at our wood fiber manufacturing mills. We're also going to ensure that 100% of all the fiber that we use goes through a sustainably sourced methodology. This one I've got a lot of passion around. I actually sit on the Sustainable Forestry Initiative, or SFI. Some of you are familiar with that. I've been the chair the last couple of years. Making sure that we can ensure and represent and certify to all of our customers that you can use our material, you can feel good about it, and your end-use consumer can really feel good about what they're doing is critical for our business. We're very passionate around that, and it's something that we're really, not only for ourselves, but for the entire industry to take a leadership role in to make sure that they can feel good about that. Because it's a great story, we need to make sure no one tarnishes it, and that's what we're all about at Graphic. OK, talk a little bit about results. What I can tell you about this is that with Vision 2030, we're going to bring the full force of what we built here to be able to, whether it's innovation capabilities or manufacturing capabilities or execution capabilities, to bear for customers and ultimately the end-use consumers that use them. I believe we can actually compete with the very best consumer packaging companies in the world for sure. For our shareholders, and Steve will talk about some of these specific financial goals, what you can count on from us is that through all economic cycles, you can expect strong financial results. I think the last few years have really demonstrated our ability to be able to do that. The moves we're making, we announced last night and we'll go forward here today, we'll further build on that. Again, our portfolio will move with the consumer and so it will reflect that balance in that consistency of the results. If one side of the business is down, the other side of the business is performing well, that's the balance we sought, that's the company we built. and it will be reflected in our results. That again is what it means to be a true consumer packaging company and a leader in that market. Finally, we're going to prioritize our people. and our investment in our people, because that's how we'll stay on top. We have the company we need today to run. It is here. And we're going to bring out some of these investments we're making in people and our sustainability and innovation process in a way that I think will give you more confidence that we can really do all the things that we're saying and hit this ambitious set of targets that we've rolled out as part of Vision 2030. Look, I'm really proud of what we've accomplished here through 2023. I talked about the results earlier today. They were excellent against a very challenging backdrop. But our company is very different in 2024 than we could have ever imagined when we put together Vision 2025. Our innovation is stronger, it's broader, and it's deeper. Our team is delivered through exceptionally challenging circumstances, and we've been tested along the way. And when we've been tested, we have learned, and we're applying that knowledge, which is something that the very best companies always do. We've made excellent progress on our own sustainability program. We're going to make more of it over the next seven years, as Michelle will walk you through, and again, We are a critical part of our customers meeting their sustainability targets. Our goal is to make Graphic Packaging the undisputed consumer packaging company in the world. And our Vision 2030 really puts that stake in the ground today. And we're very excited to have you here. So with that, I'm going to ask Maggie to come up. And she's going to go in a little deeper in terms of bringing some of the things that I talked about to life. Okay.

Good morning, everyone. I'm very excited to be here today to share with you information about the innovation capability at Graphic Packaging. As Mike just mentioned, innovation is a core component of our vision 2030. And after my discussion today, I hope you have really three key takeaways. The first is the demand from consumers for more sustainable packaging is accelerating. Secondly, our innovation, our global innovation capability is competitively advantaged and ready to meet that opportunity. And lastly, we see a $15 billion sales opportunity for paperboard packaging, which gives us confidence in our path to a 2% growth and innovation to achieve our vision. As Mike mentioned, our products are in the hands of millions of customers multiple times per day. Over the last several years, we've made many investments to dramatically expand our global product and our customer portfolio. We work with the leading companies and brands around the world, and with them, we meet consumers in many of life's everyday moments. We have a great responsibility because our consumer packages are at the interface between our customers' products and the consumer. We have to deliver on a product that meets those consumer needs while also delivering value to the brand owner. Our packaging meets consumers whenever and wherever they consume while also providing convenience, freshness, safety, and a host of other functions. We understand there are many trends driving consumer decisions today, health and wellness, convenience, experience, but most importantly, consumers are increasingly concerned about the impact their decisions have on the environment. Consumers want more sustainable packaging and 68% of them view that paperboard packaging is more sustainable than other alternatives. They're putting a lot of care and thought into the decisions they're making around the products and the brands that they buy and how they impact the environment. This is increasingly true for the next generation of consumers. A recent first insight shared that an astounding 73% of consumers and Gen Z shoppers are willing to pay more for sustainable products. As a result of this pressure, you're seeing that other stakeholders are driving actions. Retailers and brand owners, they're developing their own sustainability strategies to help meet those consumer expectations, to support their own environmental visions, while also navigating a very changing regulatory environment. This regulatory environment in the Americas is accelerating, really being primarily led by areas like Canada as well as the coastal regions. And then there are materials like foam that are clearly gaining much broader adoption across the Americas. Leading the way by a long shot in terms of scale and scope is Europe. And Jean-Francois will be sharing more about that acceleration when he gets up here. But activity across all of these stakeholders is accelerating as consumer demand for more sustainable packaging continues to increase. The core at every package we design is really three things. Everything starts with what the consumer wants. But we are also obviously very focused on our direct customers and their needs in terms of driving their brand values, their operations, and overall value proposition. But we're doing all of that while keeping the environment front and center. We strive for every new package that we introduce to have a smaller environmental impact than what came before. And that's whether that's our package or someone else's package. I want to take a moment to explain how graphic packaging manages their innovation capability, because we believe it's part of our winning path here. We are very intentional with how we align our people, our structure, and our process. And this is especially true since our acquisition of AR packaging as we've become more global. And while we have become a broader, more global footprint, we are still remaining centrally organized. At the same time, we clearly understand that within different geographical areas that there are unique consumer insights, regulatory environments, and other insights that require us to maintain a really sharp focus in terms of those regional trends. But to really drive our competitive advantage, we need to be globally connected and ensuring that as we unlock that knowledge and the insights that we get from one customer in one region, that we're sharing that to benefit all of our customers in regions across the globe. Today we have eight innovation hubs, we have 120 fully dedicated innovation employees, and we protect what we create with nearly 8,000 active patents. We leverage these investments along with the structure and process that we drive to keep accelerating our launches of new unique solutions that help support the customers and the markets that we're in across this global network. Next, I want to take a couple minutes to walk you through the innovation journey that we take hand in hand with our customers to develop these solutions. Over the past seven years, we've made significant investments in many key areas across this process in terms of people and capability, and we are delivering more value for our customers than we have in the past. Starting with market insights, we have made investments in our consumer insights capability along with marketing. We've made talent acquisitions from CPG companies like Coca-Cola and PepsiCo. And as a result, we're seeing faster consumer insights while also developing stronger relationships with our direct customers and retailers to unlock their unique needs and goals. One of the areas that I was most excited about when I joined graphic packaging is in the first few months when it started to unveil to me how deep our talent and our capabilities are within R&D and the creative design group. I can't express how impressive and extensive these capabilities are. And more recently, obviously going beyond that really competitive foundation that we have, we've been investing in things to help accelerate the front part of that funnel, things like rapid prototyping. So we can be in an ideation session with one of our customers at one of our eight innovation hubs, and we can be ideating and creating new packaging concepts, and we can turn that into a tangible sample. on that day which is very powerful and it really drives speed in our process. When I think about all the centers of excellence that we have across the company that comprise all the components of packaging, it's very extensive. Everything from our paper science capabilities, our overall paper packaging capabilities, really strong breadth across material science, and then you take our machine capabilities on top of it, and it really is unmatched. And what it allows us to do is to really drive innovation across our entire value chain that we operate in. And that's really critical and important when we think about the creative design process. Because one of the most important things that we do is when we design a new package, we are designing that with the end in mind. And what I mean by that is our teams are looking at that package and they're being able to adjust and understand how to develop that so it can apply seamlessly into our manufacturing and our supply chain as well as to our customers, which is even more critical. This is what helps us drive cost efficiency and speed to our innovation funnel. Also, we have some other fun new tools in terms of 3D visualization and also using augmented reality. And this helps us make designs come to life faster than ever before. We are leaders in the design and implementation of packaging machinery, which in some cases is a critical component of our overall solution. This is something that we've developed for many years as leaders in the beverage market, but we're finding new homes for this capability in the food segment as well. But be very clear, our number one goal when we design new packaging is to get it to work in the existing machine and equipment at our customers. That's what really drives cost effectiveness and speed to the market. In the event that we have new innovative solutions that do require machines, our team is extremely capable to help them both in the testing and the piloting phase, as well as a full global rollout when it's ready. They are very good at designing machine types that are flexible, which is important to accommodate different substrates as well as different sizes of substrates while also minimizing the footprint impact of that machinery for that precious manufacturing space at our customers. The final stage is commercialization, which is very complex. And this requires a very close working relationship with our customers to make that happen seamlessly. We have dedicated technical resources around the globe to help execute on these pilots, as well as these experiments and these pilots. And at the same time, we have unmatched scale with over a hundred manufacturing facilities with discrete printing and finishing capabilities that allow us to meet our customers wherever they are. No one else can match the scale that we deliver. And our large global customers really value that about graphic packaging. At the same time, we provide a lot of benefit to the small and medium sized brands as they can benefit from the sophistication of our innovation capabilities. And we really value working with the small to medium brands as well because they are often early adopters of some of these innovations. All in all, this journey that we go on with our customers is anything but linear, but it's, I hope that you can take away a lot of, obviously not able to talk about all the things that we've been doing, but I hope you take away and understand that we've made an incredible amount of investments advancements and again you know having you know worked for lots of other companies I cannot tell you how impressed I felt like I hit the lottery when I started unveiling some of the key technical capabilities and you pair that with the tailwinds of sustainability and it's a really exciting place to be Our capabilities, our team, and our collaborative process is really helping us drive to new and exciting winning solutions. So speaking of winning solutions, we have an unmatched portfolio of five global innovation platforms that are competitively advantaged and constitute an opportunity of $15 billion for paper packaging, Some of you may recall the unveiling that Mike was just talking about of our Vision 2025. At that time, we identified a $5 billion opportunity. So as part of these investments that we've accelerated as a company, we've been able to triple our addressable opportunity during that time. In addition, these platforms offer a value proposition over and above sustainability. There are discrete value propositions related to functionality and convenience for these products. And equally important is they are leverageable across our geographies, across markets, product categories, and they are ready to be deployed at scale. In addition to packaging innovations, we've been busy innovating on paperboard with the launch of our most recent Pacesetter Rainier. Customers and consumers are asking for recycled content. As a result of our two transformational investments in recycling paperboard, this has enabled us to create a unique sheet that brings many of the advantages that Bleachboard has today. with this new sheet is going to allow us to access underdeveloped markets here in the Americas, like oral and personal care, healthcare, and beauty. The good news is as a result of our acquisition of AR Packaging, we have strong strategic relationships with the global brand owners that support these markets. I'm very excited about Paysetter Rainier, and while it's still relatively new, we are getting very positive feedback from our customers and the market. And to be clear, we view this as an incremental opportunity that's over and above the 15 billion that I just highlighted for the consumer packaging innovation. Next, I'm gonna take a drink of water. Next, I want to highlight how these five global innovation platforms and Paysetter Rainier come to life in the retail and food service channels that we operate in. Traditionally, our stronghold has been packaging in the center of the store in cookies and crackers and cereal and pasta. These transformational investments that we've made in recycled paperboard has secured our long-term advantage in these categories. The expansion of our diverse capabilities and portfolio let us move with the consumer as their spending habits shift between traditional grocery store, club stores, e-commerce, and quick service restaurants. The next slides, I'm going to walk through each of the five platforms and give you an example of a couple of the innovations and help them become more real for you. Our products, like paper seal and punnets, are expanding paperboard packaging. We have a lot of P's in this business, I've realized. Yes. Moving those to the perimeter, another P, outside of the center of the store into areas like the deli and the bakery and the produce section and in products like fresh proteins and fresh pasta. At the same time, consumers are increasingly asking for more convenience when they prepare their foods. Our proprietary microwave and convection oven technology allow us to work with our top branded customers to provide products that not only give you that convenience, but they do it without sacrificing quality for themselves as well as their families. One of the most exciting developments in our platform here is the work that we've been doing to drive paperboard substitution for foam. both in retail as well as in our food service. We expect this opportunity to continue to grow based on foam regulation expanding, and this portfolio is well positioned with unique solutions that offer performance characteristics that either meet or exceed foam today. Many of you have seen our Chick-fil-A cold and go cups. There's some great examples out there for you to take a look at. And this is an area where obviously it provides benefits in terms of insulation for beverage in the quick service market and will continue to drive penetration of that across those markets. At the same time, we've developed a unique microwave coating that will allow our cup portfolio to move into the food section of the grocery store and other channels. We have a recent launch with Nissin Cup Noodles. That's a microwavable product, which I'll share a little bit more information about that in a bit. But this product is allowing us to move into those types of applications that support things like noodles and other ready-to-eat microwavable meals. Our Bordeaux canister was originally developed by AR Packaging. This gained early traction in Europe as brand owners were facing oncoming regulation. Many of these same global brands are looking to utilize this canister in the Americas market as well. And this line, as you can see here, is being used to replace other types of packaging materials like plastic, metal, and composite packaging. The original package was actually developed for infant formula, but it's finding its ways in many new segments. Just a handful here highlighted. As many of you know, we have a strong position in the beverage market today. However, our new innovative offerings allow solutions for customers who are looking to replace their plastic rings and shrink film across the globe. Our comprehensive portfolio of multi-pack products and machinery is equipped to accommodate all the beverage formats that are in the market today. We've since expanded these into newer markets outside of beverage into food, as you can see examples here. And we're excited about that because we know as club store volume continues to grow, we're seeing that the multi-pack configuration is gaining in popularity. You can see here examples of condiments and sauces, and it works well in other cylindrical food items. Clubstore, they are accelerating and the good news is club stores themselves with their private brands have made some traction in adopting paperboard packaging to replace plastic and they're encouraging their suppliers to do the same. Speaking of club stores and e-commerce, we're seeing much greater demand for more durable packaging as a result of their robust supply chains and heavy weighted products. We have a proprietary strength packaging portfolio that ensures the right level of protection without the overuse of material, which is really key for cost optimization as well as being more friendly to the environment. Highlighted here is the Integraflute. This is a package that replaces commonly used plastic bags. while also delivering a ship and own container configuration, which is really important for e-commerce. It provides a total omni-channel package for the brands that utilize this. Our unique package also provides an easy to open characteristic for consumers where you can either pour or scoop the product directly without having to transfer it to yet another container. This allows the branding on the package to remain in the home throughout its use. I really love this, I love this example of a graphic packaging innovation because it helps solve the sustainability challenge on two different dimensions, but at the same time, it offers a benefit to the consumer as well as the brand owner. Lastly, this is where a paste set of Rainier will be making its debut at a retailer near you, and it'll be supporting the key markets that I just highlighted a short bit ago. To summarize, this is where we've been, and this is where we are. Through these innovation platforms, we have extended the ability for paperboard packaging to reach new areas for consumers in their quest to have a more sustainable future. And it takes a lot of work and a lot of collaboration with our customers to arrive at one of these coveted retail spots. And what I want to do next is really share with you three examples of how we co-create with our customers while also strengthening and deepening our relationships. Here's the first one. So Kraft Heinz came to us with a challenge. How do you make a convenient microwave food deliver the crispness of a longtime family favorite, the grilled cheese sandwich? with our innovation teams, deep knowledge in microwave science, which yes, that's a thing, which I didn't know until I came to graphic packaging, but a really great team of microwave scientists, along with strong capabilities in overall packaging science, we were able to develop a carton that allowed the grilled cheese to be cooked in all the right places, allowing it to have the perfect bite throughout the sandwich. Our accelerated process, this is to me one of the more impressive things of this example, is from the time that we got the challenge from Kraft Heinz to a commercializable product, it was nine weeks. That's the kind of speed we need to drive these innovation platforms. This is another great example of a Bordeaux innovation, and this was in partnership with a co-packer, Club Coffee OFI, who helps support private brands for retailers in coffee lines. Their retail partner came to them with a challenge. They wanted to increase recyclability while maintaining a high-quality, easy-to-use coffee canister. Ultimately, we worked very closely with Club Coffee to develop a Bordeaux solution that gave them the recyclability, the reclosability, paperboard package that also enhanced branding on the shelf. And in fact, this retailer was so excited about the Bordeaux package that they dedicated advertising time to talk specifically about the Bordeaux package. And even more exciting, that was the second time that a brand owner has done that in a matter of months, where they dedicated precious time and money to do nothing but highlight the Bordeaux package in advertising. Lastly, I want to highlight a product that many of you have consumed at some point in your life, the beloved Nissan Cup Noodle. This was a challenge that we got from Nissen Cup Noodles. Actually, I'll walk through four challenges that they asked us to try to solve as part of looking for a new package. One is they needed to meet the foam replacement. So for many of you who've consumed it, you know that today, or historically, it's come in a foam cup. Secondly, they wanted this cup to work seamlessly in their current manufacturing filling facility. obviously to drive cost and efficiency and time. The third thing was is they wanted to be microwavable. So that was something that we had to work on and they wanted to provide obviously that convenience for the consumer. And then lastly, they wanted all that work to help to ensure they were maintaining their B Corp status as a company. Our team was able to work on all of these challenges and overcome them, and our custom-designed cup just hit retail, and beloved Nissan Cup Noodles will be microwavable for the first time in 50 years. So I've shared with you our exceptional innovation capabilities, but at the end of the day, it's our customer's vote that matters and will change the trajectory of our growth. At Graphic Packaging, we take the voice of our customer very seriously, and we consistently go out and survey our customers to understand how we can get better. So we've recently done one where we went to hundreds of contacts across our global customer base, and what you see here is an excerpt of the area where we specifically wanted to understand what they thought about our global innovation capabilities. Just to be clear, these quotes are from well-known global brands and national brands that you would know. One thing that I think is very clear with all of our customers is they have two big challenges in front of them right now. One is they need to grow. And the second is they have to respond to the consumer's demand for more sustainable packaging. We believe our innovation and our capabilities are critical to helping them solve some of their biggest challenges. In summary, demand for sustainable packaging is accelerating. We are uniquely positioned with unmatched scale and capability to take advantage of those opportunities. With a $15 billion addressable opportunity, we are confident in our ability to deliver the 2% innovation growth to achieve our vision 2030. We are creating more value for our customers than ever before, and we are getting paid for that value. I'm very excited about the last seven years of the journey that graphic packaging is on, but I'm even more excited about what's ahead. And with that, we're going to take a 10 minute break and we'll return to have a fireside chat with Mark Connolly and Jean Francois. Thank you.

Most people underestimate the value of packaging. People tend to think about a box or a cup, but it's much more complex than that because we are really that interface between the brand owners and the consumers.

When consumers pick up a package and dispense a product, if they work perfectly, they're not even noticed. But when it fails, that's when the problems arise. You don't want to add frustration. You want to take that away and make people's lives better.

Packaging for consumers serves many different functionalities. Packaging needs to preserve the product, help with the convenience and the ease of use. What our customers are looking for is how do they combine all of these functional aspects of what a package needs to deliver with the sustainability angle. And that is where they come to us to find solutions.

There's a process for design and innovation. Five steps, we look at insights, we look at design, explore those solutions, we collaborate together, we work through R&D, we get through the machinery validation, and we commercialize these ideas. That's how we get to breakthrough innovation.

The most important thing around our culture is inclusion in terms of everybody feels comfortable in providing inputs on how to make things better. We are continuously feeling the pulse of that particular customer relative to that solution.

Packaging is really a driver for shoppers to take decisions. It is about really discovering what consumers want and need and see how we can deliver on that.

We take the inspiration that we get from Consumer Insights and the design work and we bring it to life really quickly. What if we could change that package from a plastic structure into paperboard? What if we could make the package safer for children? We can do all of those things, but it has to start with what if.

I'm really proud about the investments that we have made as a company in understanding material science, in employing development techniques that are based on design for the environment principles. We tend to look at the world from an outside-in perspective and understanding what is happening out there, translating those trends and insights into new product development opportunities. Innovation has no finish line, so we will never be done. We got to invent the future of sustainable packaging.

We're all born to this blue planet and into the great project of life. Question is... What are we going to do with it? Are we along for the ride or do we work to make it better? At Graphic Packaging, we choose better. We choose purpose. Ours is to package life's everyday moments for a renewable future. This commitment shapes our plans, guides our relationships, drives our actions. The packages we make touch millions of lives for the better. Keeping food fresh, beverages portable, and making everyday moments easier, safer, and happier. We start with trees from sustainably managed forests. We also repurpose fiber from the recycling stream, designing packaging that can be recycled again and again to support a renewable future for generations to come. Graphic packaging. Every one of us has a role. Every day is an opportunity. Let's push the limits of possible every time.

most people underestimate the value of packaging people tend to think about a box or a cup but it's much more complex than that because we are really that interface between the brand owners and the consumers when consumers pick up a package and dispense a product if they work perfectly they're not even noticed but when it fails that's when the problems arise you don't want to add frustration you want to take that away and make people's lives better

Packaging for consumers serves many different functionalities. Packaging needs to preserve the product, help with the convenience and the ease of use. What our customers are looking for is how do they combine all of these functional aspects of what a package needs to deliver with the sustainability angle. And that is where they come to us to find solutions.

There's a process for design and innovation. Five steps, we look at insights, we look at design, explore those solutions, we collaborate together, we work through R&D, we get through the machinery validation, and we commercialize these ideas. That's how we get to breakthrough innovation.

The most important thing around our culture is inclusion in terms of everybody feels comfortable in providing inputs on how to make things better. We are continuously feeling the pulse of that particular customer relative to that solution.

Packaging is really a driver for shoppers to take decisions. It is about really discovering what consumers want and need and see how we can deliver on that.

We take the inspiration that we get from Consumer Insights and the design work and we bring it to life really quickly. What if we could change that package from a plastic structure into paperboard? What if we could make the package safer for children? We can do all of those things, but it has to start with what if.

I'm really proud about the investments that we have made as a company in understanding material science, in employing development techniques that are based on design for the environment principles. We tend to look at the world from an outside-in perspective and understanding what is happening out there, translating those trends and insights into new product development opportunities. Innovation has no finish line, so we will never be done. We got to invent the future of sustainable packaging.

We're all born to this blue planet and into the great project of life. Question is, what are we going to do with it? Are we along for the ride or do we work to make it better? At Graphic Packaging, we choose better. We choose purpose. Ours is to package life's everyday moments for a renewable future. This commitment shapes our plans, guides our relationships, drives our actions. The packages we make touch millions of lives for the better. Keeping food fresh, beverages portable, and making everyday moments easier, safer, and happier. We start with trees from sustainably managed forests. We also repurpose fiber from the recycling stream, designing packaging that can be recycled again and again to support a renewable future for generations to come. Graphic packaging. Every one of us has a role. Every day is an opportunity. Let's push the limits of possible every time.

Most people underestimate the value of packaging. People tend to think about a box or a cup, but it's much more complex than that because we are really that interface between the brand owners and the consumers.

When consumers pick up a package and dispense a product, if they work perfectly, they're not even noticed. But when it fails, that's when the problems arise. You don't want to add frustration. You want to take that away and make people's lives better.

Packaging for consumers serves many different functionalities. Packaging needs to preserve the product, help with the convenience and the ease of use. What our customers are looking for is how do they combine all of these functional aspects of what a package needs to deliver with the sustainability angle. And that is where they come to us to find solutions.

There's a process for design and innovation. Five steps, we look at insights, we look at design, explore those solutions, we collaborate together, we work through R&D, we get through the machinery validation, and we commercialize these ideas. That's how we get to breakthrough innovation.

The most important thing around our culture is inclusion in terms of everybody feels comfortable in providing inputs on how to make things better. We are continuously filling the pulse of that particular customer relative to that solution.

Packaging is really a driver for shoppers to take decisions. It is about really discovering what consumers want and need and see how we can deliver on that.

We take the inspiration that we get from Consumer Insights and the design work and we bring it to life really quickly. What if we could change that package from a plastic structure into paperboard? What if we could make the package safer for children? We can do all of those things, but it has to start with what if.

I'm really proud about the investments that we have made as a company in understanding material science, in employing development techniques that are based on design for the environment principles. We tend to look at the world from an outside-in perspective and understanding what is happening out there, translating those trends and insights into new product development opportunities. Innovation has no finish line, so we will never be done. We got to invent the future of sustainable packaging.

We're all born to this blue planet and into the great project of life. Question is... What are we going to do with it? Are we along for the ride? Or do we work to make it better? At Graphic Packaging, we choose better. We choose purpose. Ours is to package life's everyday moments for a renewable future. This commitment shapes our plans, guides our relationships, drives our actions. The packages we make touch millions of lives for the better. Keeping food fresh, beverages portable, and making everyday moments easier, safer, and happier. We start with trees from sustainably managed forests. We also repurpose fiber from the recycling stream, designing packaging that can be recycled again and again to support a renewable future for generations to come. Graphic packaging. Every one of us has a role. Every day is an opportunity. Let's push the limits of possible every time.

Most people underestimate the value of packaging. People tend to think about a box or a cup, but it's much more complex than that because we are really that interface between the brand owners and the consumers.

When consumers pick up a package and dispense a product, if they work perfectly, they're not even noticed. But when it fails, that's when the problems arise. You don't want to add frustration. You want to take that away and make people's lives better.

Packaging for consumers serves many different functionalities. Packaging needs to preserve the product, help with the convenience and the ease of use. What our customers are looking for is how do they combine all of these functional aspects of what a package needs to deliver with the sustainability angle. And that is where they come to us to find solutions.

There's a process for design and innovation. Five steps, we look at insights, we look at design, explore those solutions, we collaborate together, we work through R&D, we get through the machinery validation, and we commercialize these ideas. That's how we get to breakthrough innovation.

The most important thing around our culture is inclusion in terms of everybody feels comfortable in providing inputs on how to make things better. We are continuously filling the pulse of that particular customer relative to that solution.

Packaging is really a driver for shoppers to take decisions. It is about really discovering what consumers want and need and see how we can deliver on that.

We take the inspiration that we get from Consumer Insights and the design work and we bring it to life really quickly. What if we could change that package from a plastic structure into paperboard? What if we could make the package safer for children? We can do all of those things, but it has to start with what is.

Hello. OK, let's get started. So I'm Mark Connolly. I'm with Jean-Francois Roche, who is our head of international sales at Graphic Packaging. Jean-Francois spent most of his career at AR Packaging or Graphic Packaging. He's also, as Mike said, the chairman of the European Carton Manufacturers Association. So welcome, Jean-Francois.

Thank you, Marc. Good morning to everyone. Good morning to everybody on the webcast. And bonjour a tous if there are any French-speaking person in the audience or on the webcast.

So what I'd like to do, Jean-Francois, is start off with just give us an overview of the European business and where Graphic fits in.

Yep. Thank you, Mark. So in Europe, we are roughly a 2.2 billion business in a paper-borne market, which is in the range of 15 billion. If we look at the total consumer packaging market, I think the size of the European consumer packaging market is in the range of 100 billion, so this gives us plenty of room to grow. We operate in 18 different countries, which include Indonesia, Australia, and New Zealand, where some market patterns and customer base are the same. And we operate as well across six segments, which are food, healthcare, beauty, beverage, food service, and what we call household. And that's quite a benefit for us because you know you might have some volatility and some seasonality in those segments and that help us to balance out a bit those market fluctuations.

So when you think about the difference between the US business and Europe, we have a very well established healthcare and beauty business in Europe. Relationships with all of the major pharmaceutical companies there. And of course, a much smaller food service component than we have here in the US. Jean-Francois, you show us the sales progression, and it was looking pretty good up until 2022. But can you give us a sense of what recent performance is going on there?

Yeah, so if we step back a bit and look at who was the market before something called COVID happened, you know, it was pretty much straightforward and I know it's a European view of the things, but for Western European part of Europe, we were looking at GDP growth, and somehow the market was performing like a clock on the GDP growth. If we look at developing countries in Europe, which was more the eastern part, because of the way the market was getting structured, we were looking at twice the GDP growth for the market development. Then 2020 happened, COVID came on stream, consumer behavior went all over the place. um petropolymer substitution started as well at that time so you can see on the graph the the market went up pretty dramatically specifically in 2022 that was driven as well by further things because we saw finish good stock increasing raw material stock increasing because people were wondering we have seen our customer as well increasing their good stock from six to nine months and then we the price went up a bit and we were just wondering at the end of 22 when the pendulum will bounce back because that's the way it works so and beginning of 23 we we saw clearly you know we saw some resilience in the first quarter but then we had to unwind all what was in the pipe so In 23, the performance of the market was in the range of minus 7, minus 8%, but that was compensated as well by innovation and what I will call petropolymer substitution, which is the beginning of what I will discuss later on, which is a packaging and packaging waste regulation. and that brought a bit of a bit of bonus to the market so we end up in the range of minus two minus four percent on the total market for 24 you know i think we just consider that 23 will be the base and we go back a bit to the basics so i looked at the number from the european european central bank and what is the forecast of gdp For 24%, it's roughly 0.91%. So this is how the base market will evolve. But we see a strong trend still on innovation and what I call the petropolymer substitution. And we believe, because as Mike said, we have a pipeline which is already filled. We believe that this will drive a 3% to 4% growth. So we are fairly confident about 24%.

So John, first of all, you spent 24 years at AR Packaging. You left, then you joined, later you joined Graphic Packaging, then Graphic Packaging bought AR Packaging. So there's probably nobody out there who understands the impact of AR Packaging on graphic better than you do. And I know that when I was sitting out here in the audience, I didn't really appreciate the impact. So can you walk us through what the real impact was?

And this was all planned by the way, you know, when I moved to graphic. No, so before we went through the, we made the acquisition of R&R in 21. We were the third operator on the market. We were operating through 14 different converting facilities. We were operating in food, in convenience, and in beverage. We were quite successful on the beverage side of the business. And we were, what I said, embracing the European channel between UK and the rest of Europe, and as well the Iberian Peninsula. And then we made the acquisition of a company called A&R. And that was, we were adding 30 facilities. It was what I call the game changer for us. We entered into new market, which were healthcare, duty, and household as well. We entered into new technology. We entered into paper canister. We entered into barrier technology because there are the flexible division, which was highly knowledgeable about barrier technology. And just for the history, this is where Tetra Pak was developed in 1968. But they had an immense knowledge in biotechnology, which is helping quite a lot right now. And as well, they had good knowledge of finishing capability because of the beauty market and as well of security device on the healthcare market. So clearly... That was a game changer and then we supply no multinational customer, regional customer, local customer across 50 different countries. The good about that merger is that there was very little overlap on the customer base and when it comes to the footprint, it was nearly a perfect match. So it was something which was... And we became number one on the market in Europe after that acquisition.

So Maggie talked quite a bit about changing customer relationships. And it's been less than two years, but how are relationships starting to change in Europe?

It's a very interesting point you made. So I remember right after the acquisition, so I stepped back to my shoes of and I went to meet some of the large healthcare and beauty care company in Europe. I had a bit of cold feet the first time I met them because they told me, why do you care and what are you doing here? Where does that make sense? I said, guys, so we take time to listen to their expectation, to understand the market trends, and to set up the strategy. We moved radically our position with those customer because for most of them we are seen as the partner for the future. So it was a very big change in the way they were approaching us.

In a short period of time.

In a relatively short period of time as well. One thing which is a bit unique and Mike was involved not lately, we have been choosing by Danone. We are one of five supplier worldwide which will help them to drive their transition and their strategy toward packaging. which is quite of an achievement. It's what we call a joint business development plan. And I just recall one thing which was said by my friend who is a CPO of Danone, and the CEO made a call on that one. He said, even though you are a large multinational company, you have kept an entrepreneurial spirit which is a bit unique, and this is what we are looking for. And that was a bit of a compliment as well for us. So we were

You said one of five suppliers at one of five packaging companies worldwide?

No, one of five suppliers worldwide.

How many packaging companies are on that list of five?

None. We are the only one. Then one thing which have changed a bit dramatically and so we have seen the number of application for people to join the company increasing dramatically over the last 18 months. Then you just wonder because are we becoming attractive because we are number one? are you becoming attractive because of all the amazing innovation we are launching on the market or it's just because you want to be a bit selfish are you getting a lot attractive because of the amazing management that we are in europe and i suspect it's a bit all of that and it's really something which which has been which is a very big change because it's coming not from one specific company but The number of applications we had from the industry is clearly impressive and we have taken on board some people because at the end it's all about people and it's all about talent and this is what makes companies successful.

So as chairman of the European Carton Makers Association, you're right in the middle of all of the regulatory swirl. And there's a lot going on What is the most important thing for investors to be thinking about in terms of European regulation right now?

Yeah, I think it's just so Let's just talk about the Green Deal and I won't go into the detail because it's it's rather complex but it's it's something which is made out of 11 initiative and you have a lot of below those initiative law, regulation, directive, which will be set. But the aim of the Green Deal is to aim for carbon neutrality by 2050 in Europe. By the way, some of the large food and consumer good company in Europe are already aiming for carbon neutrality on their scope one and two emission in 2035 or in 2040. But let's focus on the six which are on the screen. One back. Yes. So let's focus on the six which are there. This is what will have an impact for our industry. There are six out of the 11. And out of the six, we will just focus on one, which is what we call the packaging waste regulation. That's the one which is important for you to understand. So where are we right now on the packaging waste regulation? We have had several iterations about the law and what would be the implication. I think what you have to understand, there are three governing bodies in Europe. One is the Commission, the other one is the Parliament, and the third one is the Council of Europe. They have all had a sort of different appreciation of what should be the packaging waste regulation. And they have entered right now into a trilogue phase because they want to issue one common text which will be voted in the April, May of this year. And as the parliament is due for re-election in January. June, and as the actual president, Ursula von der Leyen, she has applied to be re-elected, there is a lot of pressure to get that thing through. And we won't focus on the headwind and on the tailwinds because it's a bit too complex. I will just ask you to focus on the green box because it's a bit more simple. So on the consumer packaging, what would be the impact on the consumer packaging? It might have a bit of headwind impact because of the reuse and the recycle which is involved in the packaging waste regulation. When it comes to the paperboard industry, for the paperboard industry, I think it would be modest tailwinds because of the inherent... I did it well, that's why. benefits of fiber-based packaging compared to plastic. As us, as a company, I think it's great tailwind because we are an innovation provider in packaging and in fiber packaging, and this is what the packaging waste regulation will drive. So I am extremely confident about the tailwinds.

So the regulation for us is a tailwind. AR has dramatically expanded our innovation capabilities, but Europe is slow right now. Is that slowing down our ability to get our customers to get products in the market?

No, not at all. As I said before, 2023 was an expected reset because we know that the market end of 2022 was a bit overspending, if I may say it that way. And our sales were up on the innovation by nearly three to four percent. This is what I said for 23. So we are still fairly confident for 24. And as well, if we look a bit long-term objective, three to five years, we know that 70 to 80 percent of our growth will come from innovation. That's what gives us a bit of confidence. There is one noticeable things to change that we have noticed across several multinational company. Normally large multinational company are slow in innovation because of who they are, because of their processes, because of what made them. It's a bit something which is, and I recall a discussion I had once upon a time with the CEO of Kellogg's. He put his mobile phone on the top of the whiteboard because he said, any breakthrough innovation will never come to my desk because of who we are. And I think the large multinational company have understand that. And there is a clear change in the way people address innovation. Top management is involved because they want to get it done. They don't want it to be a three, four, five years process. As Maggie said, they want it quick. And that's a major shift in the way people are addressing innovation. Just some highlight about what we have done in terms of innovation lately. So Kill Clip started at the right time, just at the beginning of COVID. We cannot hit a better date in Europe. And it became extremely successful. I think the capacity we have installed today in Europe is in the range of three, three and a half billion packs. This is what the installed capacity we have on the machinery side, and we have seen a very strong tech from Kill Clip. It's something which is now developing in in North America. So we see great traction. This is a bit what we discussed. It was launched in Europe, and now it moves to North America. PaperSeal was developed for the retail industry in early 2020 to replace CPET trays. And we got great traction. Inflation then came. Then we have to rework a bit. And then we have developed a new technology, which is called paper seal shape, where we have seen an amazing demand in Europe. And we see, as well, a lot of traction on the North American market, as well, with that technology, because it's replacement. Bordeaux, as Mike said and as Maggie said, was developed for infant nutrition in Europe for a customer called because it's public knowledge. And then it was reiterated, we developed it, and clearly we have seen an unexpected traction on the U.S. market on Bordeaux. You have seen Montos, you have seen Club Coffee. I don't want to make any teaser, but you might see many new things soon, if I may say it that way. which is clearly because it's a replacement to blow molding technology. So we are getting great, great traction. And then we launch with Unilever, this childproof solution for the pots in Europe. And because it's Unilever, it was a large launch in Europe, but they are expecting to launch that product worldwide, which will give us the capability as well to manufacture that product because of the network we are having a bit all across the world. And we are getting traction with other customer as well in North America. What I want to say is that when I look at the pipeline of opportunity we are having, sometimes I am wondering when I see the volume. I'm just scratching a bit my head because I have never been exposed. And you have to be balanced in what you promise because the opportunities are so big that you want to be careful. But it's something where we are fairly confident. And what we try to do at the same time is to manage the resource. in an appropriate manner, because when it hits the ground and when the things go, you better be ready to manage the growth of the innovation. And I just want to make the last comment on that slide, because I have had that before. When we talk about petropolymer substitution in Europe, some people think it's a myth. I was right with that, because I know that you understand a myth. It's different. And I just want to tell you, Kill Clip was shrink replacement. PaperSeal is seep trace replacement. Bordio is blow molding technology replacement. And what we have done with Unilever is rigid plastic replacement. So it's just the reality of what's happening right now and which is driving the innovation.

John, switching gears a little bit, every couple of days the Wall Street Journal has a story that says that sustainability is over. It's too expensive. It doesn't make any sense. Nobody wanted it in the first place. And lately they're pointing to the German and French protests and saying even Europeans have figured it out. This stuff just costs too much. So, you know, have we seen our 15 minutes of fame for sustainability? Are we on to the next thing?

Yeah. So first, just a small adjustment. It's not the French. It's the French, the German, the Italian, the Spanish, the Czech, and the Polish. And they are not, because it has been a bit noisy in Europe, and they are not against the regulation. They might have some question around the pace of the regulation, but not because they understand that certain things have to be done. I think if you look at the demonstrations, they are more about the fairness of the regulation because what's happening today is that you can import goods from outside Europe which are not under the same regulation. So they feel a bit disadvantage. So that's the first point. So I don't see that as something slowing down. When you deal with multinational company in Europe, and I can guarantee I live with that every day, the first thing is you have to be competitive. The second thing they ask you is, what is your ASG strategy and capability? The third thing, and it's by order of important, the third thing is, what are your innovation capability and how can you help us to match what the market is demanding? The fourth one is the market. your capability to supply the market. Those are the key elements which are in any discussion you are having in Europe. And if you are not able to take all of them, then you are a bit gone. And then if you look at the top 10 multinational company in the world, five of them are European based. And it's in their DNA. I live with that dichotomy every day between how much we are pushed from those companies in Europe. And I might see the difference as well from North America. And I don't see any reason for them to slow down on that process. And I will even say what I feel, especially if the packaging waste regulation is coming into As a law, it's my conviction, the large multinational company will push because they believe that at least the European one, they want to be shown as a virtuous company. They understand that it's part of their brand equity and they further understand that it's what customer wants.

So if I understand what you're saying, the European CPGs are simply giving consumers what they want. They're not backing away. We heard Maggie say that U.S. consumers want more sustainable packaging, and that's what the U.S. CPGs and our customers are doing, and that's what we're working with them to provide. So it sounds like a change in U.S. administration, if it were to happen, doesn't have a whole lot to do with what graphic packaging is doing today and where we're going.

You just wrap it up in a way that I would never have been able to do.

So, yes, you are spot on. All right. Well, unfortunately, that's all we've got time for. So next up, we're going to hear from Michelle Fitzpatrick, our chief sustainability officer.

Thank you, Mark.

Thank you. I appreciate you making sure that I don't trip over the chairs. Got it. Thanks, Mark. Good morning. I can't tell you how excited I am to be here and to be able to talk about one of my favorite subjects and be able to share with you all of the amazing things that we're doing to transform our sustainability program and approach and the goals that we've got in front of us between now and 2030. So as we think about where we want to start with updating our strategy and how we best build that strategy into our business strategy and have it become an integral part of Vision 2030, it starts with first understanding what that global landscape looks like. What are those external sustainability trends that have the potential to create both opportunities and challenges for consumer packaging? And as we look at that, we see four, actually I said three before, four major goals that are really where we see there's the potential to create impact on consumer packaging. The first is population growth. Talked a lot about people want packaging. Well, we're going to have a lot more people on this planet in the very near future. Most recent study by the United Nations that was released in November of 2023 says that there's going to be 8.6 billion people on our planet in 2030, and that's going to grow to 9.8 billion people by 2050. That's a lot of people. And not only are we going to have more people, but we're also seeing growth in socioeconomic status. So the middle class is getting bigger. And those people are moving from rural communities into cities. And so what does that mean for packaging? Well, that means they're going to want more goods. They're going to need more food. They've got more buying power. They're going to want more consumer goods. And those goods are going to have to travel further to get from where they're produced to where they're going to be consumed. And that means we need more and better packaging to safely get those products to those consumers. And as Maggie laid out and Jean-Francois have laid out, our stakeholders, our customers, the brands, the regulators, they're all taking action in response to these trends. and thinking about how they're going to adapt. And we have the solution for them. Our innovative packaging is going to provide the solutions to help them embrace the opportunities in front of them and mitigate any potential challenges that they may have. I forgot to have a sip of water. I forgot to bring my glass of water with me. Okay, so our promise and how we think about sustainability. You know, you've heard Mike share our purpose statement that we package life's everyday moments for a new and renewable future. And what we want our promise to be is that every single one of those moments is going to be better for people and for the planet. And we're doing this through taking action in our three pillars that you see up there. We're creating better packaging, by innovating our packaging and our manufacturing operations to drive out waste, improve recyclability and circularity of our packaging, and really fuel a circular economy. We're doing better for people. We're creating safe and engaging workplaces that foster people's growth and development, and we're engaging our communities while we do this. And we're creating a better future for our planet by taking action to mitigate climate change in our contributions and reducing our footprint, as well as by being responsible in the way we source forest products so that we're protecting valuable forest ecosystems. And as we do this, we've got a really good plan in place to achieve all of our goals in each of those three areas. And we've laid it out so that step by step, we're going to make life's everyday moments better every day. OK, so how are we going to do that? You've already seen Mike lay out for you our Vision 2030 plans, along with three impacts of better packaging, better for people, and better future. And when we think about this, not only are our goals tied to delivering against those four global sustainability trends we talked about, they're also embracing and addressing some of the broader societal aspirations for us to have a more fair and just and equitable society. And they're underpinned by our commitment and our long history of operating with integrity and with responsible business practices, and they're reinforced by our commitment to the United Nations Global Compact to implement the 10 principles of the Compact that address human rights, and protection of the environment, into the way we operate, and also to help do our part to advance the goals of the United Nations, like the Sustainable Development Goals. And I hope that you can see the connections that we have to our contributions to those UN SDGs come through in how we've mapped our goals our 2030 goals to where we can drive impact and where we think we're going to deliver the most impact is with providing decent work and economic growth through our better for people and our better future pillars and how we're going to advance progress against responsible consumption and production climate change and life on land through our better packaging and better future goals Mike, Maggie, and Jean-Francois have already really laid out a good roadmap for you for better packaging and better for people pillars. And I'm going to be spending my time with you today talking about how we're going to bring our better future goals to life. Okay, but before we dive in, I want to just take a step back and say, we know that being a sustainable company is about a journey, and we've been on this journey for quite a while. And I just want to share a few milestones. You know, we're really proud of the fact that in 2021, we joined as a participant to the UN Global Compact, really solidifying our commitment to embrace and act on those principles. Last year, we delivered on our commitment to have set new science-based targets and have them validated by the Science-Based Target Initiative. We're very pleased that our progress has been recognized with favorable ratings by MSCI, Sustainalytics, and ISS, and we are committed to continuing to assess our progress and transparently share how we're doing through participation with organizations like CDP and Ecovatus. Okay, so now let's dig in a little bit, pivot our conversation, and talk more about our better future platform. And through this, just spend a little more time on our climate goals in particular and help them come to life for you. So we think about our better future pillar and our forest goals and our climate goals. The great thing about them is the way that we've structured them. They're going to touch packaging at every single point in the lifecycle of packaging. It's going to start with how we source our raw materials to find more sustainably sourced materials that are more renewable materials or recycled materials that go into the beginning to start that circularity engine from the very start. Then we're going to look at how we optimize our manufacturing operations to make sure that we're using resources efficiently, that we're reducing emissions, we're generating less waste. You've heard a lot about our innovation team, and they're awesome, and how they are thinking about designing packaging that is going to be a more sustainable alternative to non-renewable packaging formats that are out there today. And then we think about how we transport our packaging products to our customers, to the brands and the retailers that then use our packaging to ship their products to the consumer. We look at not only how do we optimize the transportation footprint as it's moving through that cycle, but also we kind of get back to our forest goal that the packaging that we purchase to ship our packaging products into has to be just as sustainable as the packaging we produce. And then lastly, we think about that end-of-life piece of it and how do we design our packaging to be more recyclable and more easily recovered or to help put the infrastructure in place to recover it and take it back so we can close that loop and drive the circularity of fiber-based consumer packaging. The paper-based packaging is a great story. Roughly 80% of paper-based packaging in the United States and Europe are collected and recycled today. And once collected, you know, that packaging has five to ten lifetimes that it can be recovered and recycled. And that is just something that is just amazing. I mean, paper-based packaging has the highest recovery rate of all packaging materials, more than aluminum and metal packaging, more than glass, and far more than plastic packaging. So we are really invested in making sure that our commitments to put facilities in place like Waco to further drive the circularity, make sure that we can take back even more complicated types of packaging and reprocess them and put them back in there and just continue to close the loop and fuel the circularity of paper-based packaging. So now let's talk more about climate. When we think about how our commitment to climate action is, we're looking to reduce our carbon footprint. And we're going to do that in a way where we're reducing our greenhouse gas emissions and increasing our use of renewable energy. And if you look back to where we've been, we've had climate goals for quite a long time. Original goals were set in the 2016-2017 timeframe. They were intensity-based goals, which were the right goals to set at that time. We achieved those goals three years early in 2022, and then we followed up with that by delivering on our commitment to set new science-based targets and have them validated by the Science-Based Target Initiative so that the world could see that, yes, these are the right goals. They're in line with what's needed, and we're are doing the right thing. Now, if we look forward, how are we going to actually achieve those goals, and what are we going to do? Well, our plan is we're going to reduce our scope one and scope two emissions by just a little over 50% by 2032. And I know 50.4 is a weird-looking number. That's all a science-based target initiative. They're very precise, but that is what we're going to do. And then we're going to reduce our scope three emissions out in our value chain, not within our direct control. So it's going to take a lot of collaborative effort to work with our partners to reduce those emissions by 30%. And then through that process, we're going to look to increase the amount of renewable energy we use, both in the fuels that we source as well as the electricity that we purchase for our operations. OK, so I heard finance people really like a waterfall chart. So I decided to put it in a familiar format as I break down for you our decarbonization pathway for our scope one and two emissions. As we think about how do we approach that, because 50% reduction between now and 2032, that seems really daunting. That's a lot of work we have in front of us. So it all starts with understanding where you are today. And when we look at our footprint, we see that about 60% of our Scope 1 emissions come from using fossil fuels in our paperboard manufacturing facilities. We've done a lot of good work to decarbonize those operations. Don't get me wrong. I mean, they're currently at about 75% renewable fuel, but we still, 60% of our Scope 1 emissions, or combined Scope 1 and 2 emissions, come from burning fossil fuels. you know that big big target i've got to work on got a lot of very talented engineers in our manufacturing division and they uh you know they went to work and they came up with three very great projects and those projects are going to take us from using 75 renewable fuel in our wood fiber paperboard manufacturing facilities to 90 renewable fuel between now and 2032. So that, combined with the natural grid greening that we're going to see just as the world around us gets greener between now and 2032, is going to get us 70% to 75% of the way to our 2032 target. So we're almost there. Where do we look next? Well, our next largest source of emissions comes from our Scope 2 category, and it comes from our purchased electricity across all of our operations. And that represents about 30% of our greenhouse gas emissions. So if we look at transitioning half of that to renewable electricity and wrap that up with modest year-over-year energy efficiency improvements in our operations, that gives us a clear line of sight to hit our 2032 target. and achieve that 50 percent reduction. So I'm sure you're saying, Michelle, that's all great. You've got a roadmap. But what is that going to look like and how is that going to play out over time? So let me show you. Right now, we are busy Completing the construction and startup of our Waco facility for a lot about it But while we're doing that and we're laser focused on getting keeping that on schedule getting that built and up and running our engineers They're working on the engineering design. They're working on the front-end loading They're working on taking those three projects that they've identified to get them into the queue to start executing against them once we get post Waco and The great thing about these projects, I mean, I think even more exciting than the fact that they're going to help reduce our emissions, is that they are already built into our capital plan, and they all deliver a positive return on invested capital. I mean, how great is that? We're not only doing good for the planet, we're doing good for our business. And ultimately, that's going to be good for our customer and the end consumer. So you can't ask for anything better than that. And then in the same timeline, while we've got my engineers working on the capital plan and the capital execution for our three projects, our procurement teams are actively working on trying to identify attractive renewable electricity projects. Given that it takes a lot of time to, one, identify them, and then enter through the contract phase, and then the permitting phase, and then the construction phase, because we don't want to just take any old wrecks off the market. We want to make sure that we're continuing to do our part to help decarbonize, which means looking for good projects that add additionality, additional renewable generation capacity, so that they are truly removing emissions and not just shuffling them from one place to another. So when you look at the lead times it takes to execute against all of that, we expect and project that we'll start to see the benefits of those projects along the same timeline as our capital projects, which shows, you know, acceleration of emissions reductions following Waco, you know, in sort of the second half of our period here. All right, so we'll move on to scope three. And just for your benefit, you have another waterfall to follow. The same approach that we followed when we looked at our Scope 1 and Scope 2 pathway starts with understanding your current footprint. And when we look at our footprint for Scope 3 emissions, there are really four categories that really stand out as our largest sources of Scope 3 emissions. One comes from all the purchased goods and services that we buy every day that we need to make our products. The second one comes from transporting our packaging products to the brands and the retailers so that they can put their products into it and then ship it to the consumers. The next one comes from what happens to our packaging at the end of life when the consumer is done with it. And the fourth category comes from the upstream emissions that are associated with all of the fossil fuels or grid electricity that we purchase. So the nice thing is that if we execute well against all that Scope 1 and Scope 2 projects we talked about just now, that automatically will reduce that bucket of emissions for those upstream emissions because we won't be buying those fossil fuels and that dirty grid electricity anymore. And then to get to the other groups, our procurement team, they're actively at work working on their maps to understand where are the hotspots in our category one purchase goods and services emissions so that we can then put together and engage our suppliers to work with them if they don't have science-based targets to get them to help set science-based targets to reduce their emissions and then help them reduce their emissions, which then benefits us. And same thing is going to happen with our transportation network. We're going to be working with our transportation vendors to understand where do we have opportunities to maybe shift transportation modes from truck to rail, which would have a lower footprint, or to take advantage of some of the newer emerging technologies around electric trucks or hydrogen-powered trucks or biodiesel trucks that are then going to help us get our packaging, consumer packaging, shipped to the brands and the retailers with fewer emissions than what we do today. And lastly, and probably the most exciting one, is how we're going to think about that end of life. And Waco comes back here too, is that there's this perception that a lot of food service packaging, and cups in particular, are not recyclable today. I don't know why this urban myth continues to persist, but I was in Starbucks recently. I mean, at the Starbucks R&D center recently, not even just a Starbucks, but at their R&D center recently, where they are developing their new reusable cups. And I said, hey, this is great, but there are just times when consumers are going to want a grab-and-go paper cup. They're not going to want the burden of a reusable cup. We can recycle them. Let's talk about partnering to recycle them. And the R&D engineer at Starbucks told me, paper cups are not recyclable. I'm like, what? You guys are in Seattle. Seattle is one of the first cities to accept paper cups into curbside recycling. How can you tell me that it's not recyclable? So we are going to partner with many in our value chain. We're actively working on doing this to be able to increase cup recyclability and acceptance and bring them back and be able to transform them into new packaging in our Waco facility where even better is that when we do that, we can create beautiful packaging that uses fewer materials because we don't need as many coating materials on the top surface of the packaging. And that kind of gets, so when we look at all of those four things together, that gets us about 70 to 75% of the way to our scope three 30% reduction target. we do have a little gap and we have some ideas right now that we're working on how to address that gap the first is how do we think about using our raw materials more efficiently and improving the yield on that because if we get more out of them then we have less waste that we have to deal with the second gets to the waste okay we do a really great job today recovering and repurposing and recycling the paperboard waste in our manufacturing facilities almost 100 i think we're at 98 right now gets recovered and recycled, either by us or by third parties. But we want to look at the rest of the waste that we send to landfills and how are we going to move that out of landfills and into beneficial reuse. And then the last thing we can think about doing, or that we're really looking into right now, is how do we get more recycled content into our unbleached and bleached paperboard and increase the recycled content there, all getting back to that consumer need or desire to want to have more recycled content in their paperboard. And we're convinced that with all of our very smart and talented people working on this, that we're going to close that gap and hit that 30% reduction by 2032. So with my last slide, I just want to bring us back full circle. We're talking a lot about consumers and what the consumers want in consumer packaging, how our customers are responding. Many of our customers have set very aggressive greenhouse gas reduction goals in addition to their sustainable packaging goals. The plan that I've just laid out for you on how we're going to reduce our greenhouse gas footprint not only reduces our emissions, but it helps reduce our customers' Scope 3 emissions and helps them achieve their net zero greenhouse gas targets that many of them have set. And in addition to all of the work that we're doing to provide them packaging that is more recyclable, has more recycled content, and meets all of their expectations around what they're trying to do to make their packaging more sustainable. But it's even more than just helping our customers achieve their goals. It's helping our customers meet the end consumer's desire. Their desire is to have more functional packaging, more convenient packaging, packaging that comes with a lower environmental footprint, and packaging with less plastic. So as we do our part to get better every day, we help our customers also get better every day. And with that, I'd like to turn it over to Steve Sugar, chief financial officer.

Thank you. Thanks, Michelle. Great to see everybody, and thanks for taking the time to join us today. We've covered a lot, as you would expect us to, including some new things that I want to touch on here in just a moment. Mike did a phenomenal job of, of course, laying out the transformation of what we have become as a global consumer packaging company and the path forward for us to continue to execute on that with Vision 2030. I think Maggie, Jean-Francois, provided enormous confidence that we have the innovation capabilities to grow consistently 200 plus basis points a year in real new to the market growth every year. And the pipeline continues to evolve and grow. And Michelle, I think, beautifully laid out for us that our commitment to the planet, our commitment to our customers, our commitment to the consumer is real and it's investable. And I think that's very unique relative to who we are as graphic packaging. Let me touch on for a moment some of the things that we did touch on last night. Mike touched on it, Augusta. We're very pleased that we're entering into an agreement with Clearwater Paper for them to acquire our Augusta bleach paperboard facility. It's a facility, as you know, about 600,000 tons of capacity. As Clearwater Paper indicated, it's operating today at roughly 70 to 80% of that. The acquired EBITDA, about $100 million. We'll work through all the regulatory environments over the next few months and would expect to close the transaction in the second quarter. Importantly, on a pro forma basis, and this is important as you're thinking about what we're about to share on our financial model, post the Augusta sale, that's kind of the company that we are. Roughly $8.8 billion. EBITDA on the $1.8 billion range, plus or minus, margins in the 20%. That's the business we're going to build from here. So kind of start there, great balance sheet, 2.6 times levered. This assumes we take the cash provided from the divestiture and put it against debt. And that's the business upon which we'll grow, and I'll share those financial metrics with you in just a moment. But it's important. Very important inside of that pro forma. Probably the last time I'm going to use the word integration with you ever because this is a 90% integrated business and 95% of our sales will be products that you as a consumer interact with a six pack, a 12 pack, a couple of bowl, a canister. It's the products that we utilize. 95% of the company post the Augusta transaction. Let me touch briefly on the results. You've seen them. I won't overdo this. Yes, it had all the challenges of a year, all the things we saw D stocking, all the, all the activities, three quarters of down volume growth quarters two through four. But the business performed an exceptionally high level during that period of time. We're working with our customers to get paid for the value that we create for them. Margins increased 300 basis points. And as Mike mentioned, we're off to a good start this year. And it's important because pivoting to back to organic sales growth in 2024, which we're confident we will do, is important for us because that's how we'll earn on the model that we'll talk about here in a moment. But the innovation pipeline is working. $200 million of sales last year, high confidence in the next $200 million this year and beyond. And we're off to a good start. Year's off to a good start. As Mike mentioned earlier, a little flattish right now. That's good, because last year in the first quarter, we were actually up modestly. And most of the headwinds that we felt through destocking, inventory management, and the like, occurred in quarters two through four, which gives us confidence that we'll return to organic growth as we pivot and take advantage of the innovation pipeline, as well as return to more normalized inventory management at our customers' levels and at the consumer level. You've seen the numbers. You've seen the financials. I won't overdo these. At the end of the day, Top line for the business, relatively neutral, significant execution on getting paid for the value that we create for our customers. volumetric growth down a few hundred basis points, 20% EBITDA margins. Those are margins that we aspired to several years ago, and we got to. And so we're going to talk about how that pivot creates opportunity for us to grow EBITDA from here going forward. Balance sheet's in a good spot at 2.8 times levered, and margins very, very strong coming out of the year. So execution. It worked in an environment where we were very actively matching supply and demand. So if you stand back from it, we ran our manufacturing facilities to match the demand of our customers. And that demand, in some case, was down. And so we matched that supply and demand. And when we did it, we were able to do it cost effectively, wisely, and still generate 20% EBITDA margins. And it's a testament to the resiliency of the model, the nature of how we're working our business every day. Let me touch on guidance. We provided guidance, adjusted EBITDA, adjusted EPS, 1.75 billion to 1.95 on the adjusted EBITDA. All of this, of course, assumes currently the Augusta Mill being a part of the portfolio. And so, of course, down the road, we'll adjust that for you and lay that out depending upon the timing of the close. adjusted EPS in the $2.50 to $3.00 range. We provided the normal, some additional modeling stats for you. It's there, want you to have that in hand. One of the things that we'll talk about here in a moment, and I'll just point to it, this is peak CapEx for graphic packaging. This is absolutely peak CapEx for graphic packaging. It will be driven down from here, and we'll talk a little bit about that in a moment. Just briefly on Q1, we're obviously actively continuing to manage and balance supply and demand. And if you kind of look through the first quarter, the open market paper board sales that we have today will be down on a year-over-year basis, probably $60, $70 million or so. We're managing and balancing inventory quite wisely here in the first quarter. Through that, as such, EBITDA on Q1 relative to last year, probably down 35, 45 million. And that's going to be very consistent with the guidance that we're providing for you today. So just to give you a sense for kind of where Q1 is landing. We feel very good about that. We'd like the start that we're off to with our consumer packaging volumes. returning to more normalized levels, and that sets the stage for the year that we're looking forward to have. So let me drill a little deeper on the results side. As Mike said, and he said it extremely well, results are actually quite wide. This is about our people, our capabilities, the who we are as a company, the impact we're having on society, the impact we're having on our customers, And then, of course, underneath that are the financial results that come along with that. And you heard us talk a lot about the portfolio that we have now moving with the consumer. It's critical. Moving with the consumer is an imperative for us, and we have the portfolio to do so. And that's vital for us as we look forward, because we've got this great balance of consumer staples products. We're in your life every day, eating, drinking, enjoying the home life that you have, being on the go. We're in your life on a staples basis, on a day-to-day consumption basis, which gives us incredible stickiness on the volumes and the capabilities of the business. And so let me drill down a little bit here for you with something new. A lot of arrows here. What you're going to hear is talk a very different language as we kind of move forward with our business. We're going to be talking to you about how are things going in the food market? What's happening there? What's happening with beverage? What's going on with the consumer on food service? What's happening with our household business? And so this is going to be a new disclosure. It's going to be a new conversation for us with you, which is what's going on here inside of these markets. And let me give you a couple of examples. 2022 talked a fair amount about it. All the arrows are up by the way, up is greater than 5% growth of sales sideways, two to five sideways, this way or up, up this way to two to five diagonal plus or minus two, the opposite direction on the red, pretty straightforward. 2020 22, every arrow is up. or 2% to 5%. That was the year that we just talked about. It was the realities of COVID. It was the realities of supply chain challenges, inflation, price needing to move up to deal with the realities of inflation, some of the onboarding of folks buying more than they necessarily needed. So every arrow there is just up. But in 2023, a little bit more of a normalization. It's our ability to articulate to you as an investor what's happening in this business. Talk about food for a moment. First part of 2023, pretty solid. Volumes were hanging in there. And then we kind of went through the destocking. And it showed up. It showed up because volumes came down, quarters two through four, more than offset the pricing that we were working through with our customers. And you saw some downs for the year, relatively flat. Pretty good outcome, actually, given everything that we worked through on food. Beverage, it's a great business. It's a business that continues to grow, grows globally, all the innovation activities that we talked about. And really throughout this, growth up, but a little neutral in 23. Pretty well chronicled, actually, in terms of what was going on with at-home consumption, which is where we play in beverage. And so yeah, pretty neutral. Food service, it's a franchise. It's a phenomenal business. It's on-the-go consumption. It's innovation. It's our cups. It's you driving through the drive through up consistently and up again here in the first quarter of 2024. Household, think about that. Things like laundry detergent. Think about filter frames. Think about pet food. We don't put pet food in the food. We put it down in household. Everybody bought a pet in the 2022 time frame. We didn't fall out of love with our pets, but we didn't buy them as many treats. And so we actually saw a little bit of activity on our household business. And so a little bit less growth, OK, got it. It's kind of played itself out to a draw. But we want to call those things out for you to articulate what are we seeing and what are we doing about movement in those categories. And as Jean-Francois said, We've got a great health care and beauty platform that came with AR packaging. It's powerful. It creates opportunity for us to grow globally, particularly here in North America. And it's been very steady. Our beauty business inside of that has been outstanding. As Mike said, we saw a real step back in Q4, just overall consumption in Europe. Europe was really very, very slow in Q4, but it has returned back to more normalized levels. So I give you a lot of examples there because we're going to talk more about this. When we talk about the company, when Mike talks about the company, when we're sharing what's going on, we're going to be talking about this. And this is the business we are. Because when 95% of our sales are basically making products into these markets, we need to be able to inform, provide confidence that we're winning in these markets with examples. So I wanted to take a little bit of time on something you're going to see us talk more about. The base financial model for the business, post the sale of Augusta, we have the business we need to have in hand today to execute against this. We have the business. We've been building it. Through the investments we've talked about, Kalamazoo, Waco, AR, Bell, investments in people, capabilities, talent, value-based pricing. All of those things have come together to create a business that we believe, going forward, can keep it simple. Grow the top line consistently, low single digits. Couple hundred basis points of growth inside of that. Make that work year in and year out. That will drive mid single digit EBITDA growth. And I'll talk about how we believe and why that's relevant on a go forward basis that then can drive significant EPS growth high single digits. So we're going to talk a lot about low mid high single digit growth in key categories sales just the EBITDA adjusted EPS all in the context of CapEx migrating to 5% of sales, which allows us to invest for growth in the business, to grow at those levels. And that's very important. And we'll get paid for the value. And so let me just walk through these with a little bit more. The low single-digit top line, it's right there. It's right there. Maggie talked about it. It's a $15 billion addressable market. And this isn't a TAM that's some number that's developed off of some very pie in the sky. No, these are identifiable, real products that exist today. They're in the market. They're in an alternative. And we believe that they're the environment where we will create solutions that we already have that we will apply into these markets. And if you look at this, I think one of the most powerful things about this, particularly as Mike was telling our journey going back, the history going back to 1617, you really only thought about graphic packaging as a cereal box and a 12-pack. That's how you thought about the company. And now trays, bowls, cups, containers, canisters, that's an entirely different portfolio of packaging solutions that we're inventing, we're creating, and we're bringing to life in the marketplace, which creates confidence in the low single digit sales growth. I didn't even talk about Rainier which Maggie did a phenomenal job talking about that's incremental beyond that we're in the early days we couldn't be more excited about what the ability the opportunity that exists by having the world's lowest cost highest quality most capable coated recycled paper board that we can apply in places where it just hasn't been able to win in the past that's powerful. So going back to this. and the simplicity of it. 2025 is in 2025 we set an EBITDA margin target, 18 to 20 percent. It was a target. It was important because we needed to improve upon the business. We needed to change the model, value-based pricing, getting paid for what we're creating, all the things that Mike and Maggie and John Francois talked about in their comments. We got there. We got there through value pricing, M&A, all the good work that we've been executing on. Well, now we're in that margin zip code. So we're going to pivot because from here it's about low single digit sales growth creating EBITDA growth, dollar growth in that mid single digit. And that speaks to the fact that we're not here about selling paper board. This is about a consumer packaging company selling packages. to our customers that result in products that we as consumers eventually take off the shelf. The mid single digit EPS or EBITDA growth nicely leverages into high single digit EPS growth. It's just the math. It allows us to leverage a great balance sheet and to invest back in the business. And we're looking forward to the 5% capex. Because just repeating, we're at peak capex this year. And I'll take you through that here in a moment. It'll start to cycle down in 2025 as we bring Waco to life. And then it's on the way to 5% of sales in 2026 and beyond. And it allows us to grow. 5% is all that we need. Because for us, that ability to generate the kind of growth, a couple hundred basis points a year, put money to work to do that, we really need with all of the investments we've made in our infrastructure, in our facilities, we need 2% of sales to maintain them well. So it gives us the ability to invest behind it and to grow. And so 3% of sales to invest behind growth as well as continue to be world class at the manufacturing that we do allows that to be in place. And the cash flow generation that's coming, I'll share with you here in a moment. So what do we do with this? How are we allocating capital? We've got the model. The model's going to have that $8.8 billion business growing steadily. It'll have those EBITDA. The EBITDA that's there growing steadily. Cash flow generation will become very material over the next couple of years as we wind down the capital required to bring Waco to life. And so these are the priorities. The priorities, invest in who we are. First and foremost, put the money to work in us. You've seen a cross-section of the capabilities we have here today. And we've got 24,000 colleagues who are rowing in the same direction and who are committed to building the business that we've been collectively building. And so we'll continue to invest innovation capabilities, R&D capabilities, the kind of work that's required to have a margin profile that allows us to have a good narrow band of consistent margins that allow us to grow EBITDA consistently. And so first and foremost, we'll invest in ourselves prudently. We have an incredible opportunity to grow our dividend. We've increased it a few times in the past. But as we come through this peak capex cycle, probably not 2024, but as we move towards 2025, we're setting our own expectation of a good, steady, consistent growing dividend. We have the cash flow to do it, smart to do it, returns appropriate capital to our investors and it's an opportunity that we have and that we've created with the investments that we've made. And we're going to set that expectation on ourselves obviously approved by our board but we see absolute line of sight to a good steady consistent and growing dividend as part of who we are as graphic packaging. Achieve investment grade, we've talked about this a fair amount. It's not an imperative but we have the balance sheet and we'll have the balance sheet. What achieved investment grade also basically fundamentally says is lower debt, a clean balance sheet, drive leverage probably below the 2.5 times range. It's been the low end of our range. You should expect us to apply cash flow, create that opportunity because it exists. And we'll pursue investment grade at the right time and the right place where it makes good sense, where there's value that comes from it relative to borrowing, relative to investor interest and the like. Pete capex probably not the time to do that. We've got to show the realities of D levering and we'll, we'll do that. We'll do it at the right time over this vision 2030 time horizon. But that speaks to a very wrong balance sheet and leverage that is at or below the range that we've talked about historically repurchasing the company buying back shares. We've got a history of doing that. where there's value to be created. Since 2018, we've bought back $900 million of graphic packaging. You can look that up against our market cap. That's a lot of company. And we did it at times where it was very value creating. And we did a big chunk of it coming out of the international paper transaction where we created some equity as part of that transaction, as part of the partnership. and we actually ended up acquiring back the company more cost effectively even than it was part of that transaction. And so we're going to hold, and you should expect us to hold all of our investment decisions up against buying back the company because that's what you got to do. You got to just smart balance capital allocation approach. How does it stack up? What you're doing relative to that. So we'll be thoughtful about it. We'll be smart about it. But the cash flow generation that's about to emerge for the business, it's a tool that we'll keep handy for us. We've been acquisitive. You've seen us be acquisitive. But the bar is pretty high right now on acquisitions. And as such, we're very thoughtful. And it'll end up being about capabilities. It'll be about things that accelerate growth if we choose to do so here in the, certainly in the short to medium term. Because that's the opportunity to extend leadership. We've got a strong business investing capabilities. And what's interesting, and I'm sure many of you understand it, and I'll say the word integration one more time just because I will, and then it'll be done. But our acquisition lens was in the lens of integration, because it had to be, because that's what we were driving. Post Augusta, 90% integrated, 95% of the top line, making an end product. You don't have to have that as the lens around which you look to acquire. It actually opens up the aperture quite nicely for capabilities if we choose to do so. But I'll repeat, we have the company in hand today to execute against the goals that we're aspiring to on the financial model. What's not on this page? There's not another Kalamazoo. There's not another Waco because we've made those investments. We've made the investments necessary to create the business. And as Mike said earlier, to have a business that has the capabilities to grow as a consumer packaging company and to make paperboard raw materials where we have ROIC advantage, competitive advantage, the right to win, and the ability to do so. And we've made those decisions around recycled paperboard, And we've made them around some of our wood fiber paperboard in the businesses, those facilities that will be a part of our infrastructure going forward. And it's important because we want them to be a part of our business where there's a reason for it. Better returns, ability to grow. That's why you do it. And that's why there's not another one on the list because we don't need to have another one on the list. And there won't be. And then Augusta, obviously, we took a decision with Augusta to actually exit out of the essence of making something that made it very well. It's a world-class facility, by the way, with phenomenal teams, but it's not required for us to execute on our vision going forward. An arrow with a few numbers on it. This is the next seven years. Will it play out exactly like this? Probably not. But is this where we're heading? The cash flow that we're about to generate is very substantial. We're still generating strong cash flow, by the way, even while investing at peak capex. But the trajectory for the business 2024, peak capex 2025 starts to narrow down. During that period of time, we'll still continue to grow at low single digits, have our innovation pipeline, have our margins continue to stay in a very narrow band and grow them. And then it creates an opportunity in 2026 to begin to earn on Waco. which actually has an opportunity for margin enhancement, which is great, because it allows us to have confidence, 26, 27, to bring to life the next $160 million of EBITDA and earn on it. And that business, if you stand back from it and model it, start with your 8-8, move from there, grows. EBITDA grows. Cash flows move from $800 million towards a billion. That's what we're focused on. And so over the next four years, we'll generate $2.5 billion of cash flow that we can put to work under the allocations that we just chatted about in the prior slide. About $8 a share in today's environment. And then we'll do it again in the following three years. So $5 billion of cash flow that we are confident we can create. The model is there for us to grow on a very steady and consistent basis, top line, EBITDA, EPS, generate the cash flow, have exceptional returns on invested capital, and build the business and return significant value to our shareholders. And so that just gives you a little bit of a sense for the where to from here. And with that, let me turn it back over to Mike to wrap up, and then we'll move to Q&A. Mike?

Well, thank you, Steve. And really, thank you all. I tucked this off. I don't like having a mic on when I'm not talking. general counsel advises against it there we go Look, now is the part of the presentation where I'm usually supposed to say, boy, I hope you're as excited about our future as all of us are here at Graphic Packaging. But what I'm really hoping you took away from our presentation today is just how much stronger we've become in the last seven years. And that you can begin to appreciate what it really means to have the ability to provide real lasting value for our shareholders, our customers, and our employees. Look, we aren't just a paperboard packaging company anymore. You know, Steve kind of talked about that. 95% of everything we do is some kind of package. We don't sell paperboard. We are a global consumer packaging company. It's a big shift from where we've been in the past and a big shift from many of the conversations that we've had with a number of you over time. I hope you've been able to see that today. We believe that paper packaging is really the most sustainable median of packaging out there. And ultimately, we've become a partner of choice for many of the biggest brands in the world. They understand that both in the packages that they're making today and the ones that we believe we'll package again in the future for them. Look, we package consumer staples. We do it well, and we get paid for that, which means, as Steve just outlined, you can have confidence when we outline the types of gains in free cash flow and overall profitability, both in terms of sales growth and what you'll see on the bottom line in the years to come. It's a proud moment for me to stand up here in front of all you today as we kind of look back over the last seven years. Look, seven years ago, I couldn't have stood up here and made the types of commitments that we're making you today. I just couldn't. We didn't have the investment in capabilities. We didn't have the investment in innovation. And certainly, we didn't have the investment in people that we bring to the party today. I can stand here and make these commitments to you today with a lot of confidence. And I'm even more excited about what the next seven years looks like for our company. Hopefully, really as you think about this and put it in context, the last seven years has been an incredible period of time of heavy investment, strategic change, and transformation. What's really going to become apparent over the next couple of years is just all the results that are going to be generated from the investments that we've made with the hard work that we've put in today. Actually, you see and touch our products every day. You've got many of them in front of you right now, and I love our tagline that basically says, we package everyday moments for a renewable future. As shareholders, you've had the opportunity to benefit in that, and you'll continue to have the opportunity to benefit in that from what is truly a fantastic company that we're building here. With that, thank you for listening, and I'm going to ask my team to come up here and join us on the stage, and we're to that part where we get to take questions now. A couple more of these.

I'm not sure why that followed over.

Melanie, I think you're going to handle Q&A.

And Alexandra in the blue jacket, they will be carrying around microphones. We'll start here in the room, and then we'll go to the questions coming in from the webcast.

Hey, guys. Phil Ng from Jefferies. Thanks for the awesome presentation. You talked about spending a lot of capital last few years, and it's going to be pretty elevated still. Steve, give us a sense of how much of that drops off in 2025 and 2026. Could it be more normalized in that 5% range? And I guess the bigger picture question I have is you guys have invested a lot. I think you guys should have a pretty substantial lead versus the industry and most of your competitors. Give us some perspective what you can do as a graphic packaging company with all the investments you've made that your competitors perhaps can't do. It would be helpful. Thank you.

Can we start and then you touch on that? I mean, I think, you know, cadence-wise, as we just talked, here in 2024, high watermark, probably into the nines. We spent about $300 million last year, by the way, on Waco, so well along, which is great. And so it's our expectation, if you kind of cut it in the middle, don't have the exact numbers, but in the nines, probably moves into the, you know, seven range and then back to 5%. And that'll be 5%, so think about that at, know if we continue to grow the company it'll obviously the math there's pretty obvious for four or five hundred million dollars a year so it's a good cadence down we'll generate good cash flow uh obviously still generating cash flow here in 2024 um and then in 2025 start to really see that accelerate and then 26 and beyond it really really drives so that's a little bit of just the the cadence piece of it i think capabilities wise Do you want to touch on that?

Yeah, look, our package manufacturing facilities are incredibly well capitalized. And if you think about our paperboard manufacturing facilities, they are as well, particularly with what we've done with Kalamazoo and with Waco. We've got a significant cost advantage, as I mentioned, in the most attractive parts of the market. And really where our growth will come from, Phil, in terms of the gains we make, is all about innovation and driving this whole sustainability message that we have and what we talked about. You heard Maggie go through a lot of the different examples in the markets where we compete. That's why we broke that chart out because we want to talk more about the markets and how we're actually going to win in those different verticals because where the consumer goes, we go. We built that business purposely to allow us to be able to do that.

Okay, I'll go ahead and take one from the remote audience. The first question is from Gancham Punjabi of Baird. When you established Vision 2025 targets back in 2019, you gave a specific threshold for EPS. Vision 2030 is more of an algorithm on EPS. Why is that? Is it basically now an acknowledgment that margins have reset higher and going forward earnings will be more correlated towards end market growth than perhaps internal improvement initiatives?

Steve, why don't you go ahead and talk? Yeah, I mean, thanks, Gontram, for that. I think part of it is a little bit of what Gontram is raising is with Vision 2025, we were setting margin goals and targets, and EPS came along with that. I think one of the things we're very excited about is now that we've gotten to that level of margin capability, so think plus or minus 20%, that we can actually, because of the value-based pricing, because of the organic growth, we can actually consistently operate the company in a pretty narrow band of margins. And as such, we're pivoting more towards an ability to maintain good, strong margin capability and allowing the top-line growth to provide steady and consistent EBITDA growth as well as EPS growth. And so I think it's an important pivot to the model around earning the right, if you will, having the margin profile that we can build upon and having the top line generate EBITDA growth consistently.

We got a lot of levers to pull there too with cash flow that you outlined. I was joking with George at the break. I said, I'll know that we've really established ourselves as a consumer packaging company when we move off the paper packaging list and we move into the packagers portion of it. So that's also part of how we're thinking about the goals that we laid out there today because you think about it, our goals and targets, our aspirations, the algorithm really lines up well with the customers that we're servicing.

Hi, Mike Roxland, Truer Securities. I want to echo what Phil said. Thank you for the great details in the presentation. Can you help us frame some of the bigger moving pieces around your EBITDA guidance of $1.75 to $1.95 billion? Does it reflect organic sales growth? Does it reflect the $40 per ton decline in SBS cop stock? Does it also reflect the $50 per ton increase that you guys announced last month in CUK and CRB. Just trying to get a sense of what you're embedding within that guidance for my first question. And then the second question is on free cash flow for 2024. Can you help us frame some of the larger pieces there in terms of free cash flow conversion, working capital, just to give us a sense of what type of level of free cash flow you think you could generate this year, realizing that it is a PCAPX year?

Thank you. Sure. Yeah, no, let me take that. I think, obviously, in terms of the cash flow generation, I think the modeling that we provide provides pretty good clarity that there's still positive cash flow generation, $300 million to $500 million if you kind of just stack through the EBITDA and the like. One of the things you're going to see us do a lot more of is kind of change the dialogue, too, on how we respond to your first question. And we're not gonna talk about whether Arisi's 40 up or down is in the numbers, because at the end of the day, we're operating a value-based pricing mechanism, and we have an enormous number of initiatives underway always with our customers in terms of the value we're getting paid for our products. Obviously when you manage through like like the $40 you're referencing obviously that works through our economics We're executing on other price initiatives that we've announced We are executing on those and so overall the algorithm for the business next year is really what you said We're going to grow organically and earn on it. We expect to have a good strong productivity year with our manufacturing facilities in a growing environment the innovation we're bringing we will we will earn on and as such the overall uh top line growth from the packaging that we have will be good we are because of some of the things that we're managing through on matching doing the right thing on supply and demand for the paper board sales that we still have that's a little bit of the the early headwind that were that we uh conveyed to you But really the model for the business as we talk about it, we're gonna talk more about sales and we're gonna talk about it in a way that provides you and us the confidence that we're growing that top line through the totality of how we're investing in the business. value based pricing, the volume that we're growing, and the like. But in essence, the guidance has in it a full portfolio of what we're working on today, on the pricing front on the volume front and our ability to earn on it. And as such the business this year, in many ways, as currently configured, which includes Augusta has margins and top line that are quite similar to the year we just completed.

Thanks very much. Everyone, good morning. George Staffos, B of A. Echoing everybody else, thanks for all the detail and thought you put into your analyst days. They're not just a bunch of slides and a bunch of goals that we forget about in three years and we come back and have new goals. I had a bunch of questions on vertical integration, but I'm going to leave those to the side. Thank you for that. Yeah, so growing low single digits is hard, right? I mean, we can do the math on your addressable market. If I take 1% on that and I drop that into your revenue growth, you get your 2%, voila, end of annual estate. But the reality is there's churn, right? You're not going to win every jump hole, as you said. And so where in your markets do you feel the other substrates have the best opportunity to compete against paperboard? Where do you feel really through innovation, sustainability, you've got more tailwind incrementally and you can separate? And talk to us about Rainier, which you said isn't really in the goals, but could be important in terms of that next analyst day in terms of what the growth is. So if you can talk to those points, that would be great. Second question is nearer term. So obviously food service is a wonderful business for graphic packaging. What we've seen in recent months is the CPI on food service products generally has far outstripped what you've seen for center of store. What are your thoughts about how that might, I'm pretty sure I know what you're going to say, but what do you think that's going to mean in terms of your business this year in terms of mix, in terms of volumes, in terms of the shifts across your five categories? Thank you very much.

Thank you for the question, George. Maggie, would you like to give us a little insight into some of the attractive markets that you're seeing and some of the growth we see along those verticals?

Yeah, I think to your question around our paper as relative to other materials, clearly a lot of the key markets that we've highlighted here as part of these innovation platforms and some of those examples, obviously many of those are in plastic substances today, but obviously the consumer demand for more sustainable and consumers looking as paper as the primary source The primary driver of that, they're really leaning in, our customers are leaning in as Paperboard as that solution. And when we look at the total cost of ownership, it's not always on the unit price, but on that total cost of ownership for some of those innovations, it becomes clearer in terms of those being a solution that they're moving forward with. So we feel good about our overall portfolio relative to other material alternatives.

Well, look, why don't I take a piece of that? I think, George, you summed that question up perfectly. It's a competitive landscape out there. We compete every day for the right to win. And really, when you look over the last seven years, the fact we've been able to post that 2% stack average over that period of time I think should give investors confidence that we've got some really good momentum in being able to do it. Our confidence level that we can deliver, the $200 million of innovation growth that you heard Maggie and John Francois talk about for 2024 is high. Because as Steve said, we know that locked in going into the year, the conversions have happened, so it flows through Ricardo smiling because he always has to give that to us in advance so that we can go on it. And we've done that in some very different economic environments. 22, arguably a lot easier than 23, but we got it done in both years. So I think that's there. To your question around food service, and it's a good one, and that's really why I opened up with my comments about the price declarations for RISC. We expect our food service business to be very busy this year. Again, there's less than 4% unemployment here in the US market. The American consumer loves mobility, they love being on the go, they got a lot of things they're doing, and they appreciate the drive-through window a lot and the convenience that provides. We've given you some good insights into some of the trials we've got going on with Chick-fil-A and others, and that we expect to be a flywheel for us for years to come. And that's why our Texarkana paperboard manufacturing facility is so important to us because we'll have the raw material that we're able to use all the way through that whole supply chain. And it's another great example around the differentiation we make around where we choose to be backward integrated and where we don't because we can provide good growth to our customers and ultimately higher ROICs and cash flow. Thank you. You bet.

Okay, I've got the next question here from the audience. And Steve, you've talked a little bit about price, but Mark Weintraub at Seaport wants to ask about different component items as we bridge EBITDA from 2023 to 2024. Volume, again, we've talked about price, labor, productivity.

Yeah, and you know, this is not going to be easy, but we're just not going to go there. And what I mean by that is... If we're gonna grow organically, we're gonna earn on it. Yes, of course, the fundamentals of what we've shared with you in the past, they're the fundamentals. And so as we look out to 2024, of course, we're gonna earn on our organic sales. We're gonna continue to be highly productive. We'll have labor and benefits inflation. We'll be running more than we ran this year, so we will have the opportunity to earn and take less of the of the natural downtime that we take across our manufacturing facilities right now. That pricing environment relative to the commodities. It isn't very different than the last time we talked. We've got a lot of activity underway as we value base price and work with our customers and move through some of the pricing. Not much has happened on the commodity cost front. So the fundamentals of how you came in the room are still the fundamentals. And it's why our midpoint looks like it is in terms of the expectations we've set. But we're going to go down a path where that language is going to change. and I know that that will be challenging, but we're going to, and so it's just important, and the algorithm for the company, important. It's on us to earn the value for our products, in environments where costs move, so that our margins are able to maintain themselves at the kind of levels that we're at today. So the fundamentals of the midpoint of our guide are very similar to the last time we've talked about the company, not much has changed. But we are going to change the dialogue along the way. And I'll look forward to those conversations.

Hi, good morning. Matt Roberts with Raymond James. I'll echo everybody else, all the hard work that went into the presentation, as well as over the past six to seven years that have really changed the business. That being said, another question on price, but really the value-added price to actions that you've implemented. You know, you've done a very good job holding on to margin over the past couple years via price mechanisms. And then the February price increase seemed like it was due to certain raw material cost changes in certain substrates. So how exactly is the value-add price implementation different? I mean, are there ways we can quantify things like innovation or supply chain dependability or consumer insights that Maggie brought up? Or is it something that your customers are now more inelastic because of more innovative products?

No, I wouldn't say they're inelastic. I mean, again, it's a competitive market. It's packaging. But what I would say is that there's a general appreciation, particularly by our largest customers, around the need for security of supply, the need for innovation, and the need to help them accomplish their sustainability goals. I hope when you see that waterfall up there, I mean, you know graphics DNA. We measure everything. And so being able to put that in and the context around, no, this is real, we're actually going to reduce this down and you saw the scope three, Michelle had that on there. We need our suppliers to do the same thing. Guess who we are for most of our customers? We're that bar. And so the fact we bring those things is really valuable to them and they understand that. Like I said, we expect them to buy well, but they're willing to compensate us for those types of things that we do. And if we do start to see input cost inflation in the market, and I know that was a question we had over here from Mark earlier, we'll take price. And our track record is really good at doing that. Look at what we did in 22. Look at what we did in 23. So I think we've demonstrated an ability to do that. But it also comes back to making sure we're getting paid for the value we provide our customers and have an equal sharing on that. So it's a number of things.

Thank you. Certainly appreciate that. My second question, Maggie, I want to ask you, in your remarks, you said that innovative products, the goal is to not have any switchover costs, correct? Have them work on the exact same machinery. Is there a certain percentage where it does not work? And in those cases, I mean, how do those conversations go? I imagine it's a lot of incremental investment. Machines have a certain lifespan themselves. So So what percent is that, and how are customers receptive to it? Thanks for taking the question.

Yeah, no, it's a really good question. I think the percentage is evolving, because I'm thinking about a lot of projects that are in queue right now. But if I were to do a range, maybe 30% to 50% could go higher in certain of those innovation platforms. But I think it's obviously something we continue to try to hit the mark on our ability to do that. The Nissan Cup was a great example. Our ability to commercialize that quickly. We could get onto their filling lines and do that pretty seamlessly. And so we're going to continue to focus on doing that. There's obviously... different machine capabilities that we're trying to develop to help make that as efficient as possible when it is required. We also partner with co-packers who can help leverage that so they may make an investment and they might be supplying to multiple different customers. So we're really trying to utilize that as a leverage point. So we're getting creative around that and at the end of the day, if the value proposition is there and if it's regulation, and there's other things that they have to drive, or it's bringing better performance on shelf at retail to help drive top line performance, those can overcome a lot of those investment costs.

If I may just ask one comment on the, that's one of the reason why we are getting a lot of traction on paper seal shape, because somehow we are matching what CP trace is, and the volume on CP trace are, extremely large and the seeding technology at the end is the same. That's why we are getting traction because in terms of CapEx for those people, they use technologies as they are having and we are just replacing a base seedbed trays by a paper seed shape which has nearly the same capabilities in terms of seeding. That's why on that specific, we are getting a high level of traction in Europe. That's a great point.

Yeah. Thank you all. Gabe Haiti, Will Sargo. As per usual, you guys provide good detail. A question about becoming a packaging solutions provider. And I know it's been a journey that you guys kind of initiated, let's call it five to six, seven years ago. Almost like packaging as a service, if you will. Um, but the question is, you know, the last three years were pretty conducive to maybe transition to a value-based pricing methodology or strategy versus historically how business had been conducted. So the question is, um, how would you instruct us to think about some, again, I know you're not, it's tough in a format like this to give us specifics, but to think about, um, how frequently there are openers for contracts or how, how long those may have run, um, to maybe think about go forward as opposed to just sort of this simple algorithm of 2% translates to 5% to 10%.

Yeah. So I think, look, Gabe, we've got a certain percentage of our portfolio that's up for contract renewal every year. It's almost like clockwork. Some years are a little heavier than others, but for the most part, I'd say it's 20, 25% that is constantly rolling through. So it's not like that ever stopped during that process. But what I was trying to do in my prepared remarks is really kind of paint a picture for where we were kind of bid ask, which is really the market we were in versus where we are now, which is a much more holistic supply position we have with our customers, deeper relationships with customers because it's needed for them to accomplish their goals, As the world's gotten more enthralled with regulation and it's been harder to reach customers, we have solutions that will help them do that. So it's really not so much that we're just trying to, hey, look, we're changing all the vernacular because we want to. And that's why Vision 2025 doesn't really even apply right now in many ways because some of those targets aren't ambitious enough and it's not aligned with how we run the company. That algorithm, well simple in nature, is really hard to do. But if you can do it year in and year out, and that's what we put the stake in the ground today, it's incredible value creating. That's what we want you to take away from. That's the commitment we're making today. That means we have to manage a whole bunch of those little indiscreet things that you're talking about. price cost, what the volumes do, how did this happen over here? All of that gets encompassed in there and we think it's a better way to talk about what we're doing. That's why we want to make that shift to talk more about the markets because that's really what will drive the overall performance of the company over the long term.

I'll go again. This is another one from Mark Weintraub. Steve again.

He didn't like the first answer.

Is the anticipated impact of reinvesting excess free cash flow captured in the Vision 2030 base financial model growth expectations, or is the impact potentially accretive?

Can you read that question again, please? Say that again.

Is the anticipated impact of reinvesting excess free cash flow captured in the Vision 2030 base financial model growth expectations? Is it in the growth expectations? Or is the impact potentially accretive to what we laid out earlier?

I think the way I would talk about that, if you kind of look at how we shared it with you today, is the base model of low, mid, and high single digits results in an ability of the business to generate very substantial cash flow. And what we shared is that that actually allows us to allocate capital in such a way that potentially says put cash in to drive innovation even faster, more capabilities, and have the flywheel spin even faster if we see those opportunities. Or increase the dividend because we have every opportunity to do so through the cash flow. Or repurchase the shares where it makes sense to do because it's the best way to provide return to shareholders. So I think the way we'd articulate that is The base model does a great job of indicating that we believe, as Mike said, it's not an easy thing to do, but we believe that we can actually generate low, mid, and high. And if there's opportunity to invest faster back in the business, capabilities grow faster organically, we'll absolutely do that. But we'll hold it up against the other capabilities to return value to shareholders, dividend, shares, low debt. So I think it's really, that's how you think about the model. And I guess, I know Mark's not here, ask him if that addressed his question or anything.

No, maybe I just might add their really good response there. Steve made a couple of points in his prepared remarks that I just want to put a little emphasis on. He talked about 5% of sales is CapEx and 2% being a robust amount for maintaining those assets. These are well-invested assets. You look at what we've done over the last seven years, we're proud of our package converting facilities and our paperboard manufacturing facilities. If you think about it, Kalamazoo and Waco will be brand new. That's a pretty long tail as you wind that forward. That difference between the two and the five is substantial in terms of the things that we can invest back in the business. As we grow on the food service side, Maggie needs cup plants to fill out that geographic piece. That's all in that 5 percent. that we wrote out there. What Michelle talked about, the decarbonization, those three big projects that she put out there, that's in the 5%. So the cash flow that Steve kind of outlined on the ARC, I guess it was, which is pretty darn impressive, it anticipates those investments and the things that we need to do to continue to deliver on those things for our customers and so you asked about how we're positioned against other competitors it's not just our paperboard packaging peers it's really all consumer packaging companies and we love the relative competitive positioning that we're in right now

Thank you, guys, for all the information. John Dunnigan at Jefferies here. If I understood Mark's question, maybe I can just ask it a little bit differently. The CAGRs that you're expecting with the Vision 2030, you know, maybe is it more back-end weighted given all the projects you have now where you see more of the growth coming in that 26, 27, 28 timeframe after Waco's already up, or... Do you think that you can achieve some of these EBITDA growth with the project still in the investment stage now? Is this growth potential mid-single digits and high single digits here in the next couple of years with everything you have going on? Thank you.

Oh, sure. Yeah. So again, the way to think about it, excellent question is, look, you know, we've got Waco that's going to come to life here, end of 25, end of 26 and on. So there's $160 million of EBITDA we committed to that'll be there. That'll drive some additional sales growth. The Rainier piece of that's, you know, a creative on top of that. But look, we're committed to growing our volumes each and every year, and that starts in 24, and we gave you some insight into how we're thinking about it and why our confidence is there that we'll be able to do that. We see that as accelerating and continuing to be a creative over that entire seven-year planning horizon. Our track record, as I talk you through, is solid for being able to do that.

Yeah, it's definitely not a back-end loaded scenario at all.

I think the only thing that's back-end loaded is a little bit of the cash flow because we're still in the investment phase. But if you adjust for 25 and 26, you saw that ramp up to a billion dollars of free cash flow a year in those outlying years, and that's why.

I have another question from the remote audience. This is from an investor. From your remarks today, what is your approach with RISD moving forward?

Look, I think I characterized that in the beginning pretty sharply. It's not new for graphic packaging to not like third-party indexes. We've been talking about that for years. As you can see by our value-based pricing model, we've been moving away from third-party indexes for years. So what I'm saying is that we don't agree with the assessment on food service for all the reasons that I've outlined here, food service cup stock in particular. And it just strengthens our resolve to continue to move away from third-party indexes that are, in our opinion, historically inaccurate and very non-transparent in terms of how those things are generated and how they're scored. So I'd just say that's how I would answer that question.

Hello, everyone. This is Gregory Andropoulos from Citi. Thanks for the detail in the presentation today. I just had a few points of clarification around the Augusta sale, and then a bigger picture question about your substrate mix going forward. So just on Augusta briefly, do you expect any disenergies from the sale? I know you mentioned the $1.8 billion pro forma EBITDA number. So any disenergies there? And then any retained liabilities we should be aware of post-sale? And then just kind of bigger picture, The sale would reduce your SPS footprint by about half with MyMath. And you've made investments seemingly focused on CRB over the last two years with K2 and now Waco. So the question for me is, do you see an opportunity to move customers from SBS, maybe even CUK, to CRB? And what role do you see SBS playing in the long term, you know, 2030 vision, acknowledging that there's some import competition from FBB now and, you know, the market may see some capacity coming online in 25 plus.

I'll start and then Mike can add on. I think to your first part of your question, we don't see any dis-energies with the sale of the asset. What we'll have is a little bit of a transition because our internal needs, our packaging needs, We were running between two facilities, and we'll migrate those to Texarkana. So there's a little bit of transition, but not anything on the dis-energies front. And there are no retained liabilities. I think that was probably just a normal boilerplate statement. There's nothing that we're retaining that is of any substance at all. It's actually quite clean in terms of the transaction. The paper board facility stands on its own quite nicely. It's got an outstanding team. and that team's in place and very committed to the success of that facility. So there's nothing there dis-energy-wise or retained liabilities that would be impactful for us. We'll just be managing through a little bit of transition here in 2024 relative to really servicing our capabilities and our needs that we have at the Texarkana facility to create packaging.

And really, the way I'd answer the second part of your question, which is a really good probing question in terms of how we think about that from a strategy standpoint, is ultimately this is consistent with our view. Our view is that recycled products, in particular, are going to be at the heart of the most attractive part of the industry. paperboard packaging market. And so the result was we made the investment in Kalamazoo and then we couldn't even see some of the things that we've got in Waco before we made the K2 investment. So as we take that as a follow on, our ability to continue to ramp up like our Rainier grade you heard Maggie talk about, which competes with the very best premium SBS grades that are out there. it puts us in a situation where we're not doing those kind of trade-offs. That's where we're going to spend our time. We'll always convert some SPS. It's important. It's a good grade. We'll make some of it ourselves in Texarkana and where we need more, we can always go to the open market and buy it because people are continuing to invest in that market. You've got a North American producer that's building some. There's a European producer that's discussed about bringing another mill online. So we like how that positions us. And what you don't want to do with a new grade of paper board, like Rainier, is start to cannibalize what you're already doing. So this really fits us well, and it's consistent with our overall strategy around driving long-term customer investments that help them drive the innovation, as well as higher ROICs and more consistent cash flow.

I think, Mike, to the point you're making, too, the Texarkana facility is a phenomenal manufacturing facility for making the cup raw materials that we need to really support what is going to be a long growth trajectory for our food service business. So cups, bowls, trays, and that's the right raw material for that. Texarkana does that exceptionally well and has a long growth trajectory of the ability to make that raw material, that paperboard, to support our growth trajectory for food service.

Okay, I've got one more. This is from an international investor. As you increase your focus on end markets as a driver of your top-line performance, will you be able also to get a better measurement of customer inventories for each of the end markets? And your growth should be much more aligned with your customers. Is that a correct statement?

Yeah. So, I'm going to hit that first and then you can add on on that. Look, we work with our customers all the time to try to get the best insights that they've got around what their overall demand profile is going to be. But there are times, quite frankly, they don't necessarily know. I mean, things shift quickly here and they want to be able to be responsive to their end-use consumer. So, that was that flex capacity that I talked about that we've got to make sure that we have. Something we learned as we kind of came through COVID. Our customers need us to be able to do that. I love the question, though, because ultimately the closer we get to the customer here, the deeper we have, the more integrated we are into their business. And there are some cases where our overall demand planning models are actually connected now. And you'll see us do more of that in the future where we're closer to they sell one, we make one. It's ultimately something that we strive to achieve. And you probably...

Yeah, I think you said it really well there. I think coming out of COVID, a lot of companies, just like Mike was talking about ours, are looking at how robust their supply chains are. So one of the good outcomes that we have in working even closer with our customers is that we are getting better visibility. in terms of some of their aspects of their supply chain. And we would expect that to continue to evolve. I mean, that's really a goal that we have with our top customers so that we can have it much tighter. There's efficiency, obviously, for both companies in being able to do that. So we feel good about that over time.

There's a question in the back, yeah.

Hey, guys. It's Will Muller at Greenlight. Going back to what Steve just mentioned on cup versus carton, any chance you could put a finer point on where your mix sits post-Augusta? Maybe spend a minute on how those two markets are different. I think the intuition is that the cup side is a little more attractive, but...

Well, yeah, I think, look, if you look at Augusta, I mean, both mills are roughly the same size. Now I'll mark $20 because I've said it twice. You notice that I have to change too. I'm not using that word anymore. We have paperboard manufacturing facilities. But they're both about the same size, roughly 600,000 tons. If you look at the Texarkana facility, it actually is indexed about 400,000 tons of cup stock and then the balance, of course, coded. So it fits us perfectly with what we're doing. And as Steve said, and we've talked about publicly, is our pivot is we would prefer to run more cup out of that facility. And we'll either make Rainier for the grades that need that kind of premium paperboard. And Maggie showed you the kind of end use markets that we're really targeting for that. Or if we need to buy some paperboard on the market, we can do that. And as we've demonstrated in Europe, You know, we can get really good ROICs by doing that. We're one of the largest purchasers of paper board in the world. We buy it well. We know who to source it from. And ultimately, we benefit from being able to do that. So we've got a lot of great options, I guess, is the punchline.

Does that answer your question, Will? Hmm.

I guess I'm more wondering about the actual market structures of the customers for Cupstock versus Carton. Sort of supply-demand. If it's a more attractive market to be selling into, less competitive, so on and so forth, or if it's not, if that's the wrong thought.

There's less people that make it for sure. It's a complicated grade because one of the things you've got to be able to do is make the brim around the top. And that requires some real knowledge of material science and the type of furnace you use in that whole process. And in the case of our business, it's a highly integrated model. Almost 95% of all that material goes through our own cup plants, which again gives me the ire that I talked about earlier around the third party you know, scoring a market like that when we know exactly where all that material is going. Most of it's coming to ourselves. So it's a very attractive market and one that's growing, as I talked about in my answer to George, you know, in terms of overall demand. Every quarter over the last three years, we've shown growth in our food service business, including the one we're in now. Thanks for that, Will.

I've got one more, and then I think we're going to end with George. The last question coming in remotely is from Mark Weintraub of Seaport.

We need to have a call with Mark.

Referring to slide 65, which is the arrow slide, and this is good just for us to confirm this. He's talking about the sales performance by market is very helpful. Thank you. But it seems to be dollar sales driven rather than net organic sales. First of all, is that right? And going forward, does it make sense to drive the analysis using dollar sales or net organic sales?

Yeah, thanks for that, Mark. And it'll be dollar sales. But what we'll do is, of course, describe what's happening inside of those. So we'll raise it up to dollar sales. But where it's material and appropriate, we're actually looking forward to kind of talking about what are we seeing Or what are we seeing volumetrically? What are we seeing on value pricing? So we'll talk about those things when we describe what's happening with those arrows, but it's a really important pivot. I appreciate him asking that question. It will be dollar sales, but we won't lose the ability to speak about what's happening with the company organically, and we will. I mean, you can count on us. We'll know exactly where we're at. We'll talk about it appropriately, particularly when it has an impact on the business. And so we'll definitely be prepared to do so. We'll definitely share our innovation sales on a quarterly basis. So we'll talk very specifically about how we're doing against that 2%. And we track that very methodically. literally month to month. And so it'll be dollar sales, but we won't lose the ability to articulate what's happening underneath that where it's appropriate and balanced in terms of sharing it.

Thanks, George Stafford. I wanted to one of my last questions was piggybacking off of Mark's question. So along with the arrows and probably percentages or at least ranges in terms of the growth by end market, will you be giving us revenue every quarter by end market? uh or maybe every year in other words or percentages so that if we want to build you want us to build a model that's based on revenue by end market will you give us more tools to be able to do that on a going forward basis so that's question number one question number two again with rainier what could that be in terms of an opportunity for you three years from now if if you want us again to think about revenue and opportunity and lastly Our perception, perhaps incorrectly, is the plastic guys who we all love and as well are talking a lot about carbon footprint. And that seems to be the narrative that comes from the plastics industry. Not so much recycling rates, but carbon footprint in terms of defending their position, why they're sustainable to Maggie or Michelle. You know, where does paperboard stand in terms of aggregate carbon footprint versus plastics, recognizing it's dangerous to talk about an aggregate? And where does paperwork particularly stand up well versus plastics in that regard to either of you? Thank you, guys. And great presentation.

Thank you, George. Why don't you take the first? I'll do the first one, George.

We're definitely we're working through what you just asked around and what we've provided today is kind of a big bucket. So what percentage of the company falls into each of those categories will be providing the arrows what's happening inside of there. I don't know that we'll necessarily get to a spot where every quarter we're articulating the exact dollar thing because I don't know that that well that's probably Not necessary, if you will, but what we will do is articulate to you and to all kind of what's happening inside of those categories so that you have a sense for, okay, where are we for the quarter? Where are we year to date? And you know the baseline. And then, of course, as we work through, I'm sure we'll reconcile that in a way that provides visibility into, hey, what's going on inside of food holistically? So I appreciate you raising it because this is new disclosure, and it's one that we're looking forward to. We're obviously open to feedback on that as well. But we're looking forward, actually, to talking about it in a way that allows you to constructively build the model for the company.

Yeah, and look, we've got the customer base in there. You'll look to true that up. So I get the point. It's a good one, and we'll give some thought to that and how best to do that. In terms of the other two questions, I mean, in terms of Rainier, I'm really excited about that one. As you know, I'm a printer. And when we look at kind of the surface of that particular sheet, and Maggie did a really nice job going through the different markets where we think we can penetrate that. I'm hesitant to give you a tonnage figure because I want to move away from that, but it definitely all, you know, inures to our benefit in terms of package sales. And that is actually one of those substrates that we would seek to sell on the external market because it's not available from anybody else. We make it. Others don't have it. And so it makes sense for us to actually make that available, and we'll do that kind of going forward here. So I think it's got a lot of promise, and we've already got our first commercial application. You've got to... Dozen or so trials underway, so we're quite encouraged with what we see. I'll hit the first part, and then Michelle, I'd like you to kind of respond to this. George, it's a good question. Everybody's sustainable. Every presentation you go to, they've got it out there. I want to know, do they have the detail that we laid out here? We just laid out a very good waterfall with discrete bespoke projects that show you how we're going to get there. And we told you how we're going to pay for it within the capex that we laid out there. It's one thing to say it. It's another thing to do it. And so from our standpoint, that's what you can count on us doing. Michelle laid it out really well. And we know exactly what we need to do in order to do it. And it comes with cost of capital type returns. It's not knock your socks off stuff, but the mere fact we can decarbonize the way we did and we can earn cost of capital, that's a pretty great position to be in. And so, you know, I think the best way I can answer your question, I don't know everybody else's stuff, but I know ours. And, you know, I think the more transparent other companies are in terms of the claims that they're making, actually, I think, you know, shines a light on it and will let you as analysts and ultimately the investors and our customers, the end-use customers, actually be able to make those decisions.

And consumers.

And consumers. Thank you. Yeah, that's really a good point, Maggie. Michelle, anything you would add over and above that?

Yeah, so I think what I would say about carbon footprint and when they're really trying to get at the product carbon footprint calculations is these are are models and the models are only as good as how you define the boundaries of the models and the quality of the input data that you put into the models. With life cycle assessment models in particular, you have a lot of flexibility in terms of how you define the boundary and the input conditions that you use. Like any model, even statistical models, If you want a desired outcome of your answer, there's a great way to configure the model to give you the answer that you want. And what's interesting with the plastic packaging manufacturers is not only are the virgin plastic manufacturers trying to say that their products are better than paper, they're also trying to say that their products are better than the bioplastic manufacturers. And the bioplastic people are saying that their models are better and their footprint is better than the virgin plastic people. So there's a lot of misinformation out there. Most of the data that gets published isn't third-party validated, and they don't provide the details behind their assessment where you can reproduce their analysis and show that they've had a really good and thoughtful approach to it. So I think you need to take lifecycle assessment models with a grain of salt because there's a lot of smoke and mirrors going on right now. And that's an area that we plan to invest in and build our capability and be able to help brings some more clarity and transparency to a lot of the misinformation that's out there.

I just wanted to add one comment because that's part of the 11th initiative we are having in Europe, and one of that initiative is on greenwashing, where you provide information and where you disclose information because we have seen a bit everything. What I can just say from a customer experience, at least for the large European multinational company, they are on it i mean you cannot claim something you know they are into the detail of the all the calculation and they are very advanced on the way they assess things so because they don't want to be stuck in something that they are claiming which is not the truth the other thing i'd add george in to piggyback onto those comments too is if you think about what we're doing at our waco paperboard manufacturing facility we've got a vertical drum pulping system we're going to install there

We're going to be able to take up to 15 million paper cups a day. You heard Michelle talk about that. That's going to be the top wire fiber. Top wire fiber, which right now today for most people who manufacture that paper board, it's, you know, sorted office paper, which is going the way like this, right, from an availability standpoint, which means the price is going up like this. So if you're a consumer, and you heard Michelle talk about fiber, one of our customers that manufactures that, you want to know that your stuff is actually going back and being reused again. We're going to be able to show that within about a 200 mile radius of that mill and the mill we have in Kalamazoo, we'll have the capability to bring that stuff back, clean it up, and put it back into first line packaging again. It's not downgraded somewhere into a park bench, planking, you know, and I'm not disparaging that. I mean, look, that's important too. But the consumer, as you talked about, really cares about, hey, can I use this? Do I have a license to feel good about this paper cup I've got in my hand? And if they know that that's actually happening, and you talked about a very learned person who... Didn't have that perspective. You know, that actually makes a big difference. That's incumbent upon people like graphic packaging leaders in consumer packaging to make those kind of investments back in our business so that we can actually say that kind of stuff. Not that we're saying someone else needs to do it or the taxpayer needs to do it. We're going to do that. And we compete in those markets every day for that fiber. And our customers are really excited about that. So I think ask for the details because they matter. And you can't ignore the whole upstream operation because when we lay ours out, we're looking at it from beginning to end. That's pretty exciting. All right. Well, listen, it's been fantastic to be here today at the NYSE. It never gets old for me to be here. It's our third time, Steve, I think, doing this. We had some new speakers today. I thought they did a great job. Really appreciate everybody's input. Thank you for coming and for all of you on the web. Thank you for your interest in graphic packaging. It's an exciting time to be a part of the company, and I'm actually more than thrilled to have the opportunity to lead such a fine group of people each and every day. So have a great