Sonoco Products Company

Good day and thank you for standing by. Welcome to the Q1 2024 Sunoco Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 11 on your telephone. You will then hear an automated message advising that your hand is raised. To withdraw your question, please press star 11 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker, Lisa Weeks, Vice President of Investor Relations. Please go ahead.

Thank you, Operator, and thanks to everyone for joining us today for Sunoco's first quarter earnings call. Last evening, we issued a news release highlighting our financial performance for the first quarter, and we prepared a presentation that we will reference during this call. The press release and presentation are available online under the Investor Relations section of our website at sunoco.com. As a reminder, during today's call, we will discuss a number of forward-looking statements based on current expectations, estimates, and projections. These statements are not guarantees of future performance and are subject to certain risks and uncertainties. Therefore, actual results may differ materially. Please take a moment to review the forward-looking statements on slide two of the presentation. Additionally, today's presentation includes the use of non-GAAP financial measures which management believes provides useful information to investors about the company's financial condition and results of operations. Further information about the company's use of non-GAAP financial measures, including definitions as well as reconciliations to GAAP measures, is available under the Investor Relations section of our website. Joining me this morning are Howard Coker, President and CEO, Rob Dillard, Chief Financial Officer, and Roger Fuller, Chief Operating Officer. For today's call, we will have a prepared remarks section, followed by a discussion of the results for the quarter and outlook for the second quarter, followed by a Q&A. If you will turn to slide five in our presentation, I will now turn the call over to our CEO, Howard Coker, for business updates.

Thank you, Lisa, and thank all of you for joining us today. Let me kick off the discussion this morning with an update on our first quarter 2024 overall financial performance. We executed well and delivered solid results in the quarter, which were in line with our expectations. Sales were $1.6 billion. Adjusted EBITDA was $245 million, an EBITDA margin of 15%. Our adjusted earnings per share were $1.12, which was above the midpoint of our guidance, and operating cash flow was $166 million with strong working capital management. Productivity in the first quarter came in strong as well at $51 million, which is just an outstanding result from our team's focused execution and operating discipline. Our productivity results are from the value-adding capital investments across our plant network, including automation, process improvements, and energy cost reductions, all of which is underpinned by our portfolio simplification activities and strong expense management. So I do want to say thank you to our team for your hard work and commitment for our results this quarter. If you'll turn to slide six, this past February, we were happy to host our Investor Day 2024 in New York, share our strategy updates, and what's next for Sunoco. As I took over the CAO role in 2020, we've been on a transformation journey to improve the performance of the company and we are making progress. We've built a strong portfolio that delivers greater value, simplified the company, and unified our global operating model to improve financial results while maintaining our disciplined capital structure. At our investor day, we provided our outlook over the next five years where we are targeting adjusted EBITDA of $1.5 billion with a high team's EBITDA margins. And we are expecting to generate cumulative operating cash flows of $4 to $5 billion, all while we remain committed to growing our competitive dividends. Our next era of enterprise strategy is supported by our commitments to maintain a focused portfolio, align the appropriate capital to our businesses, and invest in our people and sustainability while we operate with disciplines. If you turn to slide seven, we committed to keeping you updated on our progress along the way on our near-term strategic priorities through 2025, which are centered on continued alignment of our portfolio and investments in our four core businesses. We'll continue focused on investing in streamlining operations for these core businesses or resolve the all other group of businesses. If you turn to slide eight, we made an important step toward the all-other resolution with the completion of the protective solutions to vestiture on April 1. This was a great business for Sunoco for many years, but through our portfolio simplification and investment analysis lens, we deemed this business to be non-core and took the appropriate action to find the right owner. As we progress through additional portfolio activities, we'll keep you apprised of our progress, which is focused on strategic sales time for value. In parallel, we announced that as of January 1, 2024, we have taken five businesses that were run independently and now merge them under one leader and operating structure in our consumer segment called TFP. This new scaled platform of $1.3 billion based on last year's revenue is focused on niche markets where we believe we have the right to win and the right to grow. The integration of these businesses is well underway, and we expect to see operational and sales benefit in the future. The spirit of innovation to drive sales growth in the business is alive and well. Two of our most recent products were recognized with PAC Global Awards for 2024. Our environmentally-sense paper blister award won the best in show for sustainable packaging, and our environment paper can with a paper bottom also won Best in Class Award for Sustainable Packaging, and Award for Distinction for Design Innovation. We're delighted to be recognized for our proprietary designs to help our customers achieve their sustainability packaging goals. In support of our environmental commitments, we were pleased to announce that we entered into a 15-year virtual purchase power agreement with NG's Wind Project. Starting in 2025, we will contract 140 megawatts of electricity through Engie, which is almost half of our U.S. electrical needs. Projects like this help in our progress towards our emission targets by consuming clean, reliable power in the communities where we operate. If you'll turn to slide nine, our sustainability efforts are highlighted in our 2023 Corporate Sustainability Report update, which we published just last week. Similar to last year's report, our materials were prepared in reference to GRI, TDFC, and SASB standards, and detailed progress to our 2023 targets are in line with the science-based targets initiatives. On the social side, we've updated our workplace diversity hiring progress, provided updates on our supplier diversity programs, as well as our community investments through the Sunoco Foundation. We're grateful for the recognition we received for these efforts, and we are most recently named by Newsweek as one of America's most trustworthy companies, which is fully aligned to the mission and values of Sunoco. And with that update, I'm going to turn the call over to Rob to take us through more details on our results and second quarter outlook. Rob?