Ranpak Holdings Corp.

Hello, my name is Jean-Louis. Welcome to the RANDPAC Holdings Q1 2023 earnings call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star 1 on your telephone keypad. If you would like to withdraw your question, again press the star 1. I would now like to turn the conference over to Sarah Horvath, General Counsel.

Thank you and good morning, everyone. Before we begin, I'd like to remind you that we will discuss forward-looking statements as defined under the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those forward-looking statements as a result of various factors, including those discussed in our press release and the risk factors identified in our Form 10-K and our other filings filed with the SEC. Some of the statements and responses to your questions in this conference call may include forward-looking statements that are subject to future events and uncertainties that could cause our actual results to differ materially from these statements. RAMPAC assumes no obligation and does not intend to update any such forward-looking statements. You should not place undue reliance on these forward-looking statements, all of which speak to the company only as of today. The earnings release we issued this morning and the presentation for today's call are posted on the investor relations section of our website. A copy of the release has been included in a Form 8-K that we submitted to the SEC before this call. We will also make a replay of this conference call available via webcast on the company website. For financial information that is presented on a non-GAAP basis, we have included reconciliations to the comparable GAAP information. Please refer to the table and slide presentation accompanying today's earnings release. Lastly, we'll be filing our 10-Q with the SEC for the period ending March 31, 2023. The 10-Q will be available through the SEC or on the Investor Relations section of our website. With me today, I have Omar Asili, our Chairman and CEO, and Bill Drew, our CFO. Omar will summarize our first quarter results and provide commentary on the operating landscape, and Bill will provide additional detail on the financial results before we open up the call for questions. With that, I'll turn the call over to Omar.

Thank you, Sarah, and good morning, everyone. I appreciate you all joining us. Our first quarter financial results were mostly in line with our expectations, as we expected top line in the first half of the year to be more subdued with volumes projected to pick up more in the back half of 2023. We shared an update with you on our fourth quarter call that January and February top line results were tracking in line with 2021. And that is roughly how we finished the quarter. Our top line results of 84.8 million on a constant currency basis is just shy of the 85 million from 2021 and slightly above where we were in Q1 of last year. North America sales were up 1% in the quarter versus last year. I would characterize activity levels in the region as decent in the quarter, but not robust given the macro. The manufacturing sector remains sluggish, as evidenced in the PMI data, and on the consumer side, e-commerce activity related to more discretionary purchases of goods remains slow as consumers allocate more to services and essentials. You can see this environment reflected in the trucking and container data, where volumes are clearly down. I believe the impact of the higher rate environment bank stresses and increasing unemployment concerns have impacted consumer confidence and warrant a cautious outlook in the near term in North America. While the shorter term macro is a challenge, on a positive note, we are making inroads with many key accounts that have historically been plastic only. These are longer sales cycle processes, but we can feel the momentum in discussions throughout these organizations shifting towards paper. I believe it is only a matter of time before the volumes in North America start to reflect this. Europe and APAC activity levels in the first quarter were fairly solid, with sales up 1% versus the prior year. From a regional perspective within the reporting group, I would say Europe was stronger than Asia, as we seem to be through the destocking that impacted us last year, and the better-than-expected energy environment has improved confidence. I would not call it a robust environment there, as I think many businesses and consumers are cautious, given the continuing inflationary pressures and uncertain energy outlook, but I would characterize it as a solid baseline to operate from. In APAC, we had a strong start versus plan, but the outlook there is somewhat uneven, with pockets of strength in places like Japan and Korea and some weakness in Australia and China. The environment remains a challenging one where nowhere really feels robust right now. Overall, I would say the start to the year was stronger in all geographies with January and February results pretty solid, and then activity levels softening towards the end of March and to the start of the second quarter. Our trial activity and customer engagement is solid, and while the short term is choppy given the state of the world and the consumer, I do like what I'm seeing out of some larger accounts we are chasing. As a reminder, we have significantly more favorable comparisons in the second half of the year, which leads me to continue to be constructive on the outlook for the year, even with a slower start. While the top-line outlook is not as robust as I would like, the input cost environment continues to be a positive surprise compared to our plan as the paper markets have remained favorable. North America has seen some pricing improvements since the start of the year, but pricing remains higher than I would have anticipated under the circumstances, given the supply-demand dynamic, which to me would point to more pressure on pricing in our favor. In Europe, the better-than-expected energy environment has helped drive improvement in the paper markets to start the year. We have all seen how volatile energy can be and what extreme weather swings can do, so we continue to monitor the environment closely and are focused on de-risking the remainder of the year as much as possible with our vendors who are able to lock in forward pricing. Overall, we feel good about continuing to claw back our gross margins throughout the year and our commitment to getting closer to our targeted gross margin profile. Outside of favorable movements in energy, paper, and logistics, inflationary pressures in labor and services persist globally, so we are making adjustments to areas of spend within our control until the operating environment provides better clarity. We've examined all of our forward spend and prioritized areas of need while deferring areas that are not immediately required to support the business or do not provide near-term revenue generating opportunities. We are laser focused on productivity and doing more with what we have built over the past few years. I'm pleased to report we have opened up our new European headquarters in Eidelshoven. I want to congratulate our team on doing a fantastic job of making this transition as smooth as possible for our customers and our employees. Our operations have not missed a beat, and as of April, our employees are all working out of that new facility. Our R&D and Automation Center in North America is on track to open this summer, providing us with the ability to manufacture automation equipment in the region, and finally have a showroom in the region where we can bring prospective customers. I believe this will be a game changer for our automation business in the U.S. market and will really help propel us to the next level. We complete the funding of these real estate capital commitments over the course of the next few months. Beyond that, we are focused on conserving capital and getting back to the cash-generating engine RAMPAC has been known for since inception. We're a small company, but we now have a state-of-the-art digital and physical infrastructure to aid us in running the business and serving our customers. It is time for us to harvest what we have been investing in for the past number of years and drive efficiencies while being tighter on our capital spend. We're taking a more targeted and focused approach to the business and prioritizing only those activities in the near term that can really move the needle. I'm extremely pleased with the quality of our team and our product pipeline and believe a focus on execution and enhancing productivity rather than expansion in the near term will deliver the best results. Now, with that, let me turn it over to Bill for some financial detail.