Ranpak Holdings Corp.

Welcome to the RANDPAC Holdings First Quarter 2024 Earnings Call. My name is Benjamin, and I'll be your operator for today's call. At this time, all participants are in the listen-only mode. Later, we will conduct a question-and-answer session. During the question-and-answer session, if you have a question, please press star 1 in your touchstone phone. As a reminder, the conference is being recorded. I'll now turn the call over to Sarah Horbeth, General Counsel. You may begin, Sarah.

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. RANFAC assumes no obligation and does not intend to update any such forward-looking statements. You should not place under 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 8K 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 31st, 2024. 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. Good morning, everyone. I appreciate you all joining us today. Our first quarter financial results were largely in line with our expectations as we experienced 4.4% top-line growth and meaningfully improved profitability to start the year. We are pleased to report that we experienced our third consecutive quarter of volume growth in PPS as activity levels continue to improve. While the overall operating landscape remains uneven, we are pleased to see continued but moderate general improvement. Our gross margins on a constant currency basis improved by 400 basis points year over year, and adjusted EBITDA margins improved 500 bps on a constant currency due to the favorable paper pricing environment compared to a year ago and higher volumes flowing through the complex. Overall, we are happy with the start of the year and believe it sets us on a path to achieve our targeted results for 2024. Consistent with much of our recent operating history, we expect the first half of the year will be a lower contributor to 2024 top line performance compared to the back half, as we expect more large account activity to ramp up as the year progresses and traditional seasonality to drive higher volumes in the second half of the year. North American sales were up 2.6% in the quarter versus last year, driven by improved void fill and automation sales year over year. At a more macro level, box shipments were flat to slightly up for the quarter, while freight and trucking data remains mixed. The industrial and manufacturing sector remains sluggish, while we are seeing some improvement in e-commerce activity. The impacts of higher rates constraining housing activity and all of the spend that goes with it, as well as inflationary pressures impacting consumer discretionary spend, remain present. This has led to activity levels in North America being okay, but inconsistent from month to month. On a positive note, more recently we've seen improvements in consumer confidence, so hopefully that will inspire additional demand for goods. While that is the macro picture, we try to focus on driving outcomes that are within our control at RAMPAC, such as executing on our strategic account plan. We are pleased with our progress and optimistic that the ramp-up in the plastic-to-paper shift provides us with solid volume momentum for the remainder of the year. while the macro hopefully stabilizes and improves. We said in our first quarter call last year that the plastic-to-paper shift was a longer sales cycle given the complexity of some of the organizations involved, but that we believed it was only a matter of time before the volumes start to reflect the shift in thinking. I'm pleased to say that in April, we're seeing a pickup in activity from our strategic account initiative and many accounts are beginning the transition away from plastic. Europe APAC activity levels in the first quarter were solid with sales up 5.4% versus the prior year, driven by higher volumes in void fill and wrapping. Activity levels in the region continue to improve slowly, although manufacturing and industrial activity remain subdued, impacting cushioning utilization. Consumer confidence in the region has been improving since the end of the third quarter, but it's still well below pre-COVID levels. Geographically speaking, we've seen strength in Southern Europe in countries like Spain and Italy, as well as improvement in the UK. While the central part of Europe that is more manufacturing heavy like Poland, Belgium, and Germany are weaker. In APAC, Japan and Australia continue to be bright spots. The input cost environment provides us with a benefit for the first half of the year as paper pricing moved lower throughout the year before reaching a trough in Q4. We expect paper pricing in the first half of the year to be in line with Q4 as pricing flattened out to start the year. We are, however, seeing some producers in North America and Europe making a push to increase pricing as we get deeper into the year. Overall, we are targeting to maintain a gross margin in 2024 that is in line with our finish in 2023 So we're working closely with our vendors to plan accordingly and determine if we need to make pricing adjustments based on the commodity environment. The freight market has been roughly flat to start the year and in the U.S. has remained favorable given the freight recession that has been present for the past two years. Freight market participants have struck a more optimistic tone recently, so we're monitoring that closely to see how potential improvement in freight level activity, along with rising tensions in the Middle East, driving oil higher may impact pricing and availability. Inventory levels at our distributors and end users remain tight, with many in our value chain in North America and Europe keeping tight lids on the amount of product on hand, given the increased cost of capital and uneven environment. Destocking is no longer an issue, but we continue to watch inventories at our customers across the globe. Now, with that, let me turn it over to Bill for some financial detail.