Ranpak Holdings Corp.

Hello everyone, thank you for joining us and welcome to the RANPAC Holdings second quarter 2026 earnings call. After today's prepared remarks, we will host a question and answer session. If you would like to ask a question, please press star 1 to raise your hand. To withdraw your question, press star 1 again. I will now hand the conference over to Sara Horvath, Chief Legal and HR Officer. Please go ahead.

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 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 10Q with the SEC for the period ending June 30, 2026. The 10Q will be available through the SEC or on the investor relations section of our website. With me today, I have Omar Asali, our chairman and CEO, and Bill Drew, our CFO. Omar will summarize our second quarter results and market conditions, 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, Sara. Good morning, everyone, and thank you for joining us today. We are pleased with our second quarter results and how we have started the year as we continue to effectively navigate a dynamic environment. Our investments in automation are paying off as we experience an exceptionally strong quarter in both North America and Europe. Automation delivered another quarter of strong growth with revenue increasing 139% year over year on a constant currency basis and excluding the impact of warrants. The momentum has continued to build across North America and Europe. In North America, we continue to experience strong activity with Walmart and Medline and are expanding the breadth of customers at a solid clip to start the year. In Europe, we are more established in that market as our automation product line began there and continue to experience broad-based activity. We believe automation will be a strong growth engine for us for years to come. PPS volumes increased 2.4% year over year, marking growth in 11 out of the last 12 quarters. Europe was the outperformer again as anticipated weakness following the start of the war has not immediately materialized to the extent we were concerned about. The trends we experienced in North America in the first quarter, where large enterprise outperformed while the distribution channel faced a challenging comparison, persisted into Q2, but did improve somewhat in the latter part of the quarter. Overall, we continue to expect to see improved performance in the distribution channel in the second half as the comparison normalizes and our new product initiatives in cushioning, void fill, and wrapping take hold. We're getting great receptivity to our new products such as Guardian 24, which has a smaller footprint relative to other units and provides meaningful cost savings versus phone. Now, more on to our results. Consolidated net revenue increased 12.2% on a constant currency basis for the quarter, or 12.6% excluding the impact of warrants, driven by an outstanding growth in automation equipment sales on a constant currency basis. We also benefited from a currency tailwinds in the quarter, which added 1.8 percentage points to top line growth on a reported basis in the quarter, bringing reported top line growth to 14% for the quarter and 12.5% on a year-to-date basis. Adjusted EBITDA increased 2.6 million to 19.1 million on a reported basis and was up 13.9% in constant currency terms. Excluding the impact of foreigns, adjusted EBITDA increased 15.8% on a constant currency basis and roughly in line with growth in sales and gross profit ex-depreciation on a constant currency basis. Now, moving on to the market environment and how Rampback is positioned. The macro backdrop through the second quarter was noisy, to say the least. We saw oil prices hit multi-year highs in April and then fall back. Consumer confidence plummet and then recover. and geopolitical tensions that started to fade have now heightened once again. Against that volatility, the quarter ended in a better place than it started. Several months in, demand seemed generally okay, but we see that customers remain understandably nervous about the impact higher oil and gas prices will have on input costs and the consumer, and are therefore being conservative and focused on cost reduction. The consumer at the lower end of the K economy is stretched as gas and energy prices remain elevated and other inflationary pressures for consumer goods persist. Recent improvement in consumer confidence is encouraging, but we would like to see it stabilize and also see it flow through to more durable sectors like housing and industrial activity before getting really bullish. In the near term, we are focused on driving our value and sustainability proposition. We're getting good traction with our cushioning offerings versus foam in place and would expect that product to inflect soon. In North America, the paper market has gotten somewhat tighter for the second half as producers try to push price increases. But from a competitive standpoint, we believe we remain well positioned against plastic and resin, where we saw meaningful price increases flow through in the second quarter. We continue to be aggressive in pushing the sales team to accelerate the plastic-to-paper transition, as this is a dynamic we have not seen in North America in years. In Europe, Dutch night gas pricing has been volatile since the start of the conflict, moving from more than 60 euros per megawatt hour at the end of Q1, back down to 40, and now back in the mid-50s. Paper producers in Europe have been passing on price since the beginning of Q2 and we in turn took steps to protect our margins through a temporary surcharge. We continue to be transparent with our customers and when conditions normalize, we will remove the surcharge. From a commercial perspective in Europe, we continue to emphasize the advantages we see for paper versus plastic as resin costs and availability in the region are experiencing greater pressures than what we are currently seeing flow through in the paper markets. Conditions seem to be changing daily, but overall, we believe they remain manageable. Just as we are doing internally, companies everywhere are extremely focused on costs to minimize inflationary impact. Thank you, Omar.