- Earnings call transcript Q3 2022

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Operator

Good morning, and welcome to Pactiv Evergreen Third Quarter 2022 Earnings Conference Call. [Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference over to Mr. Dhaval Patel. Please go ahead.

Dhaval Patel

good and Operator, you, morning, everyone. Thank for to our you your call. interest welcome and Evergreen, Pactiv third in Thank quarter earnings XXXX With Baksht, today, and call me Michael on President King, we CEO, CFO. have Jon and the Please website the www.pactivevergreen.com Relations company's at Events visit earnings and presentation. section the supplemental the Investor of company's access be should today with remarks in tandem reviewing this Management's heard presentation.

today's information statements to of based required as refer recent Form as risks. filings, our are XXXX. differ would our those include on to Before we we our us These a any on to we all Form today actual differ materially everyone will should forward-looking statements. and XX-Q that guarantees you discussion performance, this forward-looking those as including those remind call uncertainties quarterly to make statements of guidance materially on our are results well we expect. on begin not to statements, statements you our and could detailed and forward-looking quarterly from cause subject for like except formal more not on also for disclaim SEC are and on actual report our contemplated to report remarks, XX-K forward-looking regarding statements. statements, annual forward-looking upcoming recent of I reports could The We of obligation what statements most date, XX-Q any These available reliance update as our by future from discussions numerous by including put undue risks Therefore, Form law. results that

GAAP believe which in be during evaluating our today's can certain and financial non-GAAP measures, call, we Lastly, will we useful performance. discuss

reconciliation substitute earnings continuing in operations available during figures King. the not isolation our to in CEO, me let is Michael only. with to to turn should for most release for and GAAP, be Mike? a and measures call otherwise With non-GAAP prepared over comparable directly stated, and measures in Our the today's presentation. are GAAP Unless the accordance President results as or all call considered that, today's discussed appendix Evergreen's Pactiv in

Michael King

company Thank the third operational Evergreen to results, to a the enjoy everyone, including in improvements prior year its million from quarter decline XXXX morning, company's continuing balance XXXX Yesterday, XX% off the and closed, $X.X solid on million show result, levels positive prior as year public up was versus for momentum $XX released and a our several quarter. in Good million sheet you, guidance after to quarter, continuing and increase million to from Pactiv quarter performance. $XXX fronts, a of quarter is market EBITDA de-levering Coming QX as the billion, $XXX $XX in the year Dhaval. prior raising XXXX X% and quarter. welcome. we're stability and Adjusted best its the history and The a reported full company, million. XQ a versus revenues decline the $XXX

consumer shifting trends, to impact customers. our on consumables, volume service our focus have declines volume and the we continued to ability of over our inflation are combination as due improved of Our a on value

balance and sale of we actions received the Evergreen continue closed number million. leverage quarter, that to our business $XXX our a the of During gross completed net We proceeds of improve and ratio. our sheet Asia

explore continue liabilities. reduce transfer another third to our also lift we the pension liabilities. marked additional lift out, will plan of to and out $XXX to opportunities We gross completed successful million This

of our remain approximately leverage sub-X availability labor debt-to-EBITDA. have to markets challenges our our lack we labor impacting has We are business the and This times year, tight goal lowering committed service X.X our ability the of times. the customers. a versus now reiterate net the industry. to times closing X.X at discussed at and of the of last Since ratio of net We and leverage XXXX impacted overall

have labor Today, every target in at to area are the steady of the situation. We on staffing levels progress improve we our also actions business. almost provided

as operations, we indicated labor state our proactive Our our in managing in are results, a stable, by our now are with demand. needs unison and customer

overall as operations. and improvements operationally, has addition, production seen production in mills reliability continued in company throughput. well There and In our the improvement our our in converting equipment been has paper effectiveness as

have our service we target to with inventories to our and restored overall levels. levels improved Finally, and customers pre-XXXX delivery our

strides improving have our we provide to the mutual securing pricing appreciate customers through we've to partner us needed support production our on-going with our support enable navigate businesses value benefit. to and together. to to we By get to been environment output, the favorably understand a made customers mutual and the the Our labor inflationary able

enabling this our despite and in the during remarks. call, a now Jon? favorably over it to to turn business my and am I to state pleased environment. on-going proactively hear are Jon state to markets. of progress our results management closing is before diagnose discussion more on have the proactive more rapidly segments. overview we you strong team will shifted all us you'll This detailed share macroeconomic give navigate on-going to outlook challenges a across from As our reactive momentum under we and a excited a I about the

Jonathan Baksht

Thanks the begin aspects affect logistics. we've of impacts few wages, by year on comments X. inflationary Slide business, regarding quarter starting of the Mike's highlights materials strength most in and Mike. many and seen This a I'll reinforcing notably provide input the

not to beginning in Our year. earlier increases we're and steep hourly are the wages seeing from moderate, the

elevated to and chemicals, some costs a remains seeing which softening albeit industry, coming costs seeking through run-up are impacted level and we're increases customers, The are skill polymers. at inflationary following seeing as customers. Resin material as are for year, we're prices seen year. to has segment. The costs passed our Beverage other the However, polypropylene throughout recover with our with see margins, lag. rise lower We're transportation the still in positions. the Other employee in to our continued such resin generally the mostly while from turnover with felt in the new down, we've the generally retention problematic have we're across particularly input wood, earlier to employees increases energy, impacts starting Merchandising

You'll margins pursuing note we're volume of seeing some preserve volumes, returns. declines in strategy as value to a Mike and mentioned, over and

million from last This Our depleted outside $XXX this replenish down quarter. inventory has levels quarter. year's to our $XX is build a down with million spending from wound inventory last

going smaller We are now movements at forward. quarterly inventory and expect levels target

the $XX from flow free capital in million portion accounts cash payable its impacted a proceeds of quarter rate spending $XX cash recent outlays. while in decline year the X.X% current Despite build beginning from expense Our the outflows from build. cash million, next and free sale of but to of the at position interest to of flow working invoices has benefited approximately was our this driven cash reverse of these I of also by LIBOR a the headwind year-to-date, a become of to million With $XX the quarter. Mike our largely outflows, rising to company $XXX generated expect million inventory. inventory from mentioned by generated has X.XX%, paydown

$XX every of in to remains LIBOR path some XXX-basis has direction, mitigate change annualized a interest look interest in million future we'll volatility. uncertain point either expense. of to rates impact the Presently, While that

Fabri-Kal a X, two that on integrated the As prior during systems largely October of the reminder, comparisons. the year integration we acquisition and companies. I'd impacting closed the have XXXX, quarter, highlight ERP completed

schedule of annualized million. well ahead with close are Our synergy targets $XX to this quarter synergies

sales of million For trailing a contributed future times XX-month August EBITDA comparison which purposes, the a Asia $XX implies from closing adjusted X, XX.X the business basis sold XXXX, on multiple. on

material. remaining QX, note businesses and financial final be we before Bahrain was forward quarter. committed this through scheduled and sale. mill proceeds for any outage the operational in Hungary, A the in referenced divest QX moved to last call completed pulled financials, are successfully impacts sales success the quarter, our expected the the has assets planned accentuating originally and Spain, to not closures further quarterly and The future on held the walking During company these to for Egypt,

the review volumes due while were X% due quarter higher Net price/mix food down and performance due and quarter. to prior inflationary pressures costs to as to to turn the manufacturing Adjusted sales merchandising. X million, quarter actions, market in down prior the Slide softening the versus I'll and material was down the versus $XXX food in versus X% and X% volumes, material up billion, Now pricing net and was pass-throughs, lower higher prior seasonal the service was $X.XXX quarter $XX revenue other our costs. cost million financial EBITDA of and pass-throughs trends

of negative flow versus cash to due flow the our $XX build. primarily free improved the to for million quarter, million strategic free $XX quarter completion inventory of Our last cash

higher our prior $XX lower segment bridge prior Slide Moving lower was EBITDA XX, manufacturing divestitures driven $XX due a to increase to of on Slide XQ revenue million versus in offset $XX higher XX which by volumes, costs $XX material adjusted million $XX quarter. results by detailed impact offset million of we decline and to from from results $XX from and the $XX QX price/mix. and partially Continuing a provide million volume price/mix. quarter. by partially million primarily sales the million decline $XX million million was sequential lower to in from a and primarily from The XQ due our more The for

as X% for net million the material EBITDA costs saw inflationary due pressures primarily market manufacturing higher due to trends. to XX%, due and well softening lower segment was segment volume. volume sales sales and down as seasonal down and Foodservice $XX to Adjusted revenues or the Our lower

X% pricing primarily due volume X% market pressures to pass-through. passed material EBITDA revenues customers was lower down offset the up partially sales net to XX% through primarily favorable due to and material costs actions, for of favorable trends. driven softening segment volume, saw X%, segment inflationary primarily due sales Merchandising Food and Our by Adjusted manufacturing the by price/mix, pricing and to partially lower offset cost costs, seasonal higher higher net and by

to operations, Beverage net material Adjusted $XX was to by arising decline packaging up due price/mix Our XX% segment flattened due sales from lower volumes net million offset higher largely of EBITDA former to X% liquid saw pass-through, a board cost lower higher partially the Asia X% business. carton up from of with and due manufacturing costs replaced which down revenues the material for primarily the to segment beverage to sales X%, costs. the disposition volumes Merchandising

lockdowns businesses EBITDA review year starting our beverage price/mix food of by performance on foodservice revenue up well the period market in Slide business was the amid year the as pressures in prior merchandising. XX% inflationary softening compared quarter financial XX. was the as improved I'll to Net the XX% prior $XX coated versus Adjusted Next, as as exit COVID-XX up and volumes in in merchandising pricing post groundwood due material comparison year primarily tough of X%. while cost and and were to reopened million Volumes were as well to and actions, pass-through to favorable restaurants lower employee-related $XXX the volume pass-through strong higher of due sales a pricing by benefit down as million offsetting impacted Fabri-Kal to acquisition, volumes. the material net costs manufacturing and costs last

Our free stronger for net the was with by $XX outflows. to improved cash combined million earnings which by cash flow working partially capital lower offset due CapEx, quarter

of driven QX These acquisition due due impact of a provide to material lower million to partially a versus $XX from positive due adjusted was XXXX primarily divestiture third Asia offset net of to million volumes. and million year-over-year costs and results Slide by was to Continuing and $XX Asia benefit acquisition, of third factors quarter results by of offset by Slide lower driven bridge $XX $XX volume. XX of higher divestiture partially and from XXXX. quarter XX, our million benefit detailed from of our Fabri-Kal due we Fabri-Kal and and price/mix The our to $XXX were a the by negative The employee-related negative business, impact from million $XXX the net on revenue improvement segment costs $XXX a prior to year-over-year million EBITDA price/mix costs, year. from Moving improvement due $XXX million million primarily our million by $XX business. SG&A of other for the to and more

acquisition from the higher Our material saw as same period as offset other declining was of dynamics higher Fabri-Kal, the by and the impact and sales XX% costs, which the segment cost impact higher XX%, pricing driven versus million Fabri-Kal, revenues the manufacturing up well the around favorable of year, partially costs. by to primarily previously for impact the by net costs of last Foodservice volume X% than to from up EBITDA pricing lower Adjusted or offset reopening we noted. segment increases of and due recover $XX businesses material employee-related the to that net acquisition more pass-through volume due

by inflationary pressures. cost for up XX% year period Our up to actions Adjusted pricing volume, Food costs by net favorable partially XX%, through to softening Merchandising and pricing manufacturing costs higher sales pass-through, market of was due EBITDA employee-related lower higher segment passed lower and due same versus partially the driven and the segment to primarily material material offset sales pricing, the net due revenues to last saw by and favorable primarily offset customers, volume. primarily

Storm higher the which prior year The $XX coal offset to a Tropical key costs of pricing, drivers primarily million were by lower to due material of from passed $X Asia pass-through related volume, million of originally partially the included segment XX% Adjusted to quarter, exit million Beverage higher quarter was decline which versus X% be material business expected pricing costs, segment cost Our in for to $X cost revenues the a coated partially offset scheduled the actions saw million during impact $XX sale higher X%, due from the X% our we up by through and primarily favorable to net EBITDA XXXX, net to the our XX% fourth customers, manufacturing and and mill outage due a pricing by increase. from event. Fred, Merchandising business. groundwood sales driven

debt. improvement Next on $X.X a and ended in reduction. highlight over net to deleveraging course Slide and the $XXX cash We significant XX, I'll year in EBITDA debt outstanding with billion the QX on past our due total of adjusted focus million

from the proceeds Our cash of business. position quarter Asia of benefited the the sale in the

debt end debt EBITDA consecutive times, ended third QX net with of ratio the adjusted Our net at billion. third We X.X quarter was of a for the the around $X.X LTM to quarter. declining

our to comments. debt to alternatives levels. reduce Mike Additionally, it we evaluate pass further to now our continue back for I'll

Michael King

ESG a Jon. Slide which and our Thank talk the under move our on umbrella. turn I as environment, to attention updates. could we take work social XX key want to covers initiative, you, your social about governance to minute responsibility of I If our to much

and science-based with to in establish a targets. In big and participated the over events reminded be also but addressing of our greenhouse of building our over gathered people performance a are As Illinois teams the our for together our companies, North to climate And a gas doing by tallying many doing Lake food better challenge Forest, these donations, targets neighboring communities. drives In we of ahead XX is example, prouder packing food donations committed set insecurity. What are package And we continue banks values-driven for in food plan I in better and employees We're Food headquarters volunteering Northern of Action. Kalamazoo, the target who our America, line to last of we of Across for our reduction Month holidays Evergreen X,XXX future couldn't near first the still and communities we hundreds their organized their in better of non-profits long-term business, to than creates value that give events of families. with Pactiv We change. XXX global well our so, pounds relieve our and aligning way near Bank. over emission participated help that employees, in communities. their quarter, teams the hat to part a future in purpose tip to illustrate employees purpose and coming packaging initiatives. a to for

some chemical to relates innovate to fiber to grease been it PFAS, oil an and our needs. molded repellency. for that our effective we used As continue We've provides a customers' to in replacement products, working our products develop meet of

customers time in BPI-certified our new year, growing comply and for fiber the state PFAS food regulations of compostable banning this with expect PFAS-free released be We containers in later to packaging. line number to molded of tableware a

offerings with than from chemicals, As offerings less of PFAS our to SKU an X% contain eliminate ultimate today, PFAS altogether. of goal our

we're to company. with pleased profitable and we're sustainable, a resilient, Finally, ethical, the taking build steps more

our This ethical These organizations. we trade quarter, started learn including with give help our for section. released for to look to our at latest operations to the ESG CDP own audit shareholders in leading our should Sedex, audits beyond and customers view we investors.pactivevergreen.com disclosures To procurement the invite world's sustainable and and strategic program suppliers disclosures, the expanded in of with XXXX inform a July, confidence strategy future. one our membership more, collaboration

Now please XX. to turn Slide

million along a to I With also questions. our vendor their us communicated Pactiv commitments have our continued the million closing, by environment. let open economy. for As for market along our organization, from operations our plan and will to these including would for continue for stay focus it This to like and thank are commitment workforce broader servicing impact continued and actions success. There's of to up hard Operator? stated, guidance vigilant strategy that, and year their have and on the partners work. mutual Evergreen range pressures, the confidence our customers visibility range attractive full modest the to while to valued macroeconomic inflationary view stakeholders. generating with to to of thank Fed demand We to the $XXX our would less across like factors million previously executing we the on customers in currently into updating stabilized I cautious our reflects In current returns all we increase end with $XXX $XXX the varying reduce to actions $XXX due inflation million. of

Operator

question [Operator from go Instructions] The Ghansham Please first from Baird. ahead. comes Panjabi

Thomas Digenan

is then XQ actually underperformed? thanks. and what so, more outperformed detail early on trends on Tom segment categories in volumes If And for sitting Digenan be Ghansham. of Hi also on This color terms provide any you would could helpful.

Michael King

comment I'll of by that businesses. each Sure. one our just

inventory from us be talk no customers low-margin on and kind largely oversold all of QX, that business, replenishments helping to a I tell the decline, noted through in we're that us start the our our our perspective, service we the difficult three there's serve our largely a the the very QX volume large where Hopefully, real that, in a just segments. is just In to products. as all volume of is versus of summer really large that in looking I this able improved difference stable. comps business, as to just things would year-over-year, And in. three seasonality you reopening Qs. merchant for for trend inflationary are was a as points. some thing supporting merch would need bit And terms We've from comparable, with been and enjoy, the that business price exited That we've systemic businesses. through throughout that first U.S. there not then say really three business really I there's QX is not builds. and see QX levels, that there at [ph] would The understood but all of just best QX And in still but of then about in Food started say, support, beverage but of that's Foodservice a I note overarch Foodservice our the we've in is and that is Q, reopening the us year. from thing obviously, timeframe in to helps. margins, so last year-over-year we're just you prior And terms of value.

Thomas Digenan

flow just of in for should CapEx, different for Yes, terms and one, XXXX just variances how think the And capital? about cash that's then working helpful. we interest cash next my

Jonathan Baksht

morning. good Yes,

into next not guiding anything tuned stay cash for give we're year. XXXX so For basis flow for you next a our some call. to year, more We'll guidance from next

Thomas Digenan

over. good. turn Well I’ll it

Operator

question ahead. Please The RBC from Viswanathan Arun comes Markets. Capital next from go

Arun Viswanathan

weakness impacts there. is consumer? Congrats of is the help well Hey some businesses? from thanks we resiliency you like see for pretty heard on could of us about expect positioned trade your taking questions. lines, a in nice Foodservice. my there the all with a progress a elasticity kind then And your understand, across most down We you along just up case standpoint. holding do bit had Maybe It you're in Thanks. of portfolio quarter as those well little seems a

Michael King

want be question, last I stated Yes. we demand as our I the stable. view to that careful us, underlying Foodservice just for as do in

Where down. largely made. there our While trade is are there in takeout our would we I people with that, get that of is would QSRs. stable tighter, say there trade the out a some very as in we're wallets softness dining And the are enjoying well is we people's channels, well out other positioned say decisions yes, and I calling enjoy for experience, outside to business the positioned what chains are position down, and certainly and we've

Arun Viswanathan

you've had there, how the one Maybe any just but sale I expect consummated know some going? And other actions I any Okay, on ask lines? update then taken, new just of that you've guess I could thanks. actions are beverage provide you if that those you the on of the learnings restructuring an further those more that if could along within you'd Thanks. asset packaging?

Michael King

We've back the of had noted. to divestitures, coated you've We've groundwood. the actions taken the Yes. a number of dating as closure

and But is challenge Obviously, opportunities, our for also, well. we've that terms in internal continued of to certainly. along look work contracts pricing, improve and and do to of to the and share commercially, that two-pronged. regard. and get as mill certainly and our have do you're to that invested have operating strategy, fitness talent we overarching terms at seen staying both as We've come that We that in to efficiencies seeing well trying as customer changed. operations focus great really need and seen our And the in throughput secret, say we our decisions core. improvement assets. what's there, performance. core controllable you progress in that's further as that a Nothing on no up mills. put And tightening would the continue strategy, to and in I us our tighten in hasn't tell CapEx, as business I'd in to really We the our focus look

In anything iterative terms around strategic the review, further process. or as again, of divestitures I've stated an before, it's

and decisions We further we are have things, As to this move that. those. made will we on open do be to forward about time nothing at just decide share on

Arun Viswanathan

Thanks.

Operator

Thank from Kieran you. from De Brun comes Please ahead. Mizuho. The question go next

Kieran De Brun

morning. good Hi,

rest wondering was the of costs. And I the next terms materials year XQ? could if XQ of front, to through how of you. And like and pipeline ability you're input environment raw softer Thank changed what of pricing your into we initiatives you price talk and material kind maintain looks seeing versus some in your with volume your in customers? get pricing kind the of terms those then on of that of do Just maybe what if raw some a have in

Michael King

in all three regard. ability so far stay whole businesses And contractual level stay to we which set, continue Yes, of as in great elastic our to strides XXX%. inflationary continue we've we that made our -- as terms of pass-throughs, have to just to we in Obviously, twofold. to continue our to recovery, recover

regards in to costs, to year. I input see think the we resin think our continue to cost. end the relates terms particularly continue And same some stabilizing QX food it the businesses, I our in then throughout in of As expect falling off largely we to of

bit merchandising, As different. beverage it relates to a

see have what to see that business costs. different delta costs All up between energy continue a go our impact and natural little We different food a and in bit indexed continue in fiber continue do up headed to terms direction. in It's businesses. you'd a that a on gas, business, and that of our the our than input recovery, We still to fully delta costs go input are that recoverable. in that impact albeit

Kieran De Brun

current a Great. follow-up quick on And then the just debt profile.

done year I post down X getting X.X guess a within on target that lower of a that times. about think below level X seems potentially. kind capital next deploying to basis? below to be times trending you. job your times of How really kind hitting Thank of priorities great do go-forward towards we the You've that It

Michael King

deployment I'd largely that on returning automation. focus around say continues returning is areas of to than of be geography say our capital not targets are would our different The our projects. today. largely I EBITDA

be to continue able to at at, to for to that on growth at would the looking the ready certainly the do overall, customers all to and is our Jon, that's certainly instance, That presented as profitable grow as umbrella partner have want take we capital new Fabri-Kal, with For Jon, didn't to is recently be at remiss well and we're done wall what and an portfolio where look other if -- certainly and the well. to customer volume with current wish become we've really who I'm de-lever. similar opportunity inorganically right we'd us say might what sitting -- here ear as looking continue I assets I'd if available be to all -- itself,

usage, priority to get our that below X is In of terms times. to that's

Jonathan Baksht

the bit deleveraging is to that. obvious, is on There's leverage. one I'll achieve but two expand just components way This front. a point the And growing EBITDA of

grow that and in increase EBITDA, that looking Mike we to mentioned, margins are capital As our projects we process. those at just returns our that look

of levels. bring and to continue aspect to do so some alternatives absolute in we're levels certainly what We balance looking one we cash that's that to as of absolute operations, can So the of some the the down use cash have excess equation. run well. the But excess debt is other just on sheet that's the it the takes at debt the

Kieran De Brun

you much. very Thank

Operator

The Thank next you. Adam Samuelson question comes from ahead. go with Please Sachs. Goldman

Adam Samuelson

of I presume $X of in Yes, kind there's discrete of historical relative some which first external the on. pieces going expectations factors years about is the think that But some us the all key was cost, question kind $XX [ph] thank volume, seasonality. other just I so results fourth decline driving fourth been million help the couple implies don't clarity quarter on guess would that for in third that decline updated to just performance. your the know, million within parse price, sequential I be sequential to given thinking of hard And I or on about to other it's good hoping from get quarter EBITDA. that of the factors last quarter. kind morning. to you, moving the guidance, the a of

Michael King

Yes. I'll the -- yes. give

If you external of kind out that about and XXXX, our masks would that go QX, certainly of coming Certainly, have. business any of normally to seasonality talked pandemic, factors. back the you QX

as calendar And and they choppiness So things. spike seen some looks so with the spike in the and increasing a we've typically, what also on volumes we that. And certainly largely in reopening put improvements our more in cautiously having is it's to spike the and reliance trying operations, consumer. move to is largely two a also That's Q-over-Q I was an our in softest certainly our really right-size mandates wanted the -- volume and in active. to driven, by our increase in usage, pulled the driven year say make It's very sure lot the our customers' would the our change. business, year, drove any were around quarter A Qs, happened And in because guidance off normal outage for QX a shifted that we we're coming last like of the mobility ahead QX the not but consumer we of really pull-through a reason This about year. well. optimistic inventories, in increase. grand recent that modest beverage so

some we demand see stable of segments. I've as we'll normal segment our one seasonality, still in every While previously, stable volumes, have, mentioned

Adam Samuelson

lapping level in framed taken think the better follow-up, of a as you just as this Okay. it And Can getting volume. a about back sales or that own kind your way we inventory from actions you've you of kind in and those year the internal given then the over of kind value position think I foregone of on this just amount actions XXXX? the is quantify that rebuilds year

Jonathan Baksht

as way Yes, targeting, Those really piece would foregone as Mike help is terms managing that that I a us Adam, through I will those in of lower volume so answer right we're you doing just the business, my is to customers. the -- don't perspective I that business really just the away, would of falling in an know with sales. the broader targeting is tell customers we're is broader cut value the that. terms in and a be inflationary But a environment standpoint it's we that impactful if it piece at that from it -- that is looking that EBITDA decision margin overly would or over selection. not and as volume said, strategic it

Adam Samuelson

thanks. helpful. all it I’ll right. Okay, pass That’s on,

Operator

Bank with of comes question from next The Wilde Montreal. Mark go ahead. you. Please Thank

Mark Wilde

Good Michael. Thanks, morning, good morning Jon.

Jonathan Baksht

morning. Good

Mark Wilde

incremental Jon, as that just here with fourth think guidance from benefits first is there full came view quarter, cost in increased coming just curious question, particularly there down? the that my resin for the anything your in year, of you potential for about

Jonathan Baksht

a standpoint, from From particularly No. beat. year that not

year think in talked next front. of the A basis to is into, than going probably something continue we've that probably it pricing on is lot the improve more an more on, able beat, to resin we'll that QX. see we've of declines up that into seeing pick operational I as been

Mark Wilde

curious, number Okay. increases. had open of in still the in how And a there just margins of with better And business? on kind kind price that I'm margins those much announced here that and of a kind that a dizzying all and increases is in of curious, factor seeing being in internal I'm paper. bleach is kind And that on you're sales lag in not raising of just price little in market paperboard business a both mid-single surprised terms of digits? of down just beverage merchandising, then over of I'm we've

Michael King

Yes.

effect terms lag we And in as but We it that. caught up that are recovery, in on just right just because price haven't can side disclosed I of we in not other just I've say that cost business, and calls said haven't the of the work front some what that commercial allow have will do falling commercial off do of were yes. get we to to margin, identified that done us legacy transparency, the you've back deals more the a certainly for and on with business in contracts that to as

Mark Wilde

closures I then extent realize offshore of to closures the color I that business. say, I little didn't this on have And any finally, was Michael, just surprised. business? a

Michael King

of not in facilities hands mean Yes. business are very we with looking color a knowing in was what of the I just really and about that getting you I but about really noncore us, insignificant distracted be for really certainly earnings continuing us set legacy and tell orphan it our it. right to you're managing that can for, terms not

Mark Wilde

very That’s much. all. Thanks

Operator

White Thank Deutsche The go you. Bank. ahead. Kyle comes next from Please question from

Kyle White

question. the Thanks for you, good morning. A Hey Jon. for taking question

do belt Now you see do half almost forward? the you here, company? have going Where see create the that year value opportunity what you And be improvement? to focus your a where most for might under most for your room the

Jonathan Baksht

Sure. Good morning, Kyle.

a really to that return things prioritize better capital that's question. really projects around and deployment, on at think to build Mike continue great methodology aspects. returns-based comment and business, made really to going the focused of a but those a are and margin. better I'll deployment, a different capital a there's to One, approach I -- earlier couple on focus having a grow It's

one that's think area. I

and kind business I certainly Operational And the some In more build core margins. those. terms continue to businesses, to But of are of just areas I business others as run of we the operational I've does frankly, then rising of challenging but business. we about lastly, in the cost can in the headwinds I've cash cash very business. external volatility think things ways talking some is the market think that the strength things doesn't area. right some which necessarily And ways And that around company, with and we're resilient, of think the I about rates, with entered macro interest reduce the deleveraging capital, of have a terms to to in just in the the some I business, in looking the where flow terms efficiently and bit at but from reliable enhancements continue this And say in business. capital, reduce reduce represent that talked of recession our of stability we're would announce trying a working improvements think in our in there just on that can that there underlying are to now, you streamline operations. of reduce in of flow evaluate terms I variability nothing cost the in of it the stream. terms volatility the quarter-to-quarter But

much And the a we so then reduce ways that reduce flows cash basis cost to and the quarter-to-quarter volatility capital. our drive to from focused on can continuing help very of in that lower volatility

Kyle White

then just clarity the maintenance. And point on a of

quarter? that is cold Just trying drags to this? Or that to then outage total was million into fourth And quarter? more related fourth understand, the planned was there for $X mill the originally the impact

Michael King

got I think you've it right.

Jonathan Baksht

in was It completed QX.

Michael King

October, It and in it August. we did was for scheduled

Kyle White

turn I’ll it Perfect. over.

Operator

Anthony Pettinari comes Citi. go Thank ahead. from next you. Please with question The

Bryan Burgmeier

Bryan actually Burgmeier Anthony. this Hi, for in sitting is

for I guide On number million the still flow last just use. that's to if think $XXX good a XXXX. mentioned you I'm free cash wondering call,

inventory not lower will cash Pactiv see from Just a if yearend, thinking which about seem resin normalized levels into sure your I'm prices. now, but benefit

Jonathan Baksht

Yes. Good morning, Bryan.

last flow from cash something We we see we make $XXX don't comments the did of where flow. guided clarify believe cash million just area me an mid-XXXs for area provided I free free of the just and some a would year. general probably call. as Let to

building did cash reiterate so three and million $XX we we're inventory. But of quarters spend free flow -- in. As we year-to-date, stand components. today, again, One, positive a couple $XXX on million

today, stand real free north I'm the that's million, flow. we how million in components the mid-$XXX there As if of working we're somewhere is guide I are not of think delta that And but and I targeting year. sure cash just the quarter-over-quarter capital million. seeing a ends being would $XXX north still probably we the $XXX to piece up

quarter, this bit working is you in a the us we normalized that Given this quarter quarter. more of in am should -- mentioned unwind levels, non-inventory so hit to quarter, this inventory seen cash where piece in back build remarks, might I piece up catch capital of bit for a is have the and this to we I this a that the see quarter. prepared more looking generation that some free last saw and that that is there a in last flow payables

Bryan Burgmeier

internal much demand a out I'm color just just are declines up. is decisions of then that mistake on wondering customers' to your Thanks follow-up, that of made for much it. clearing digits maybe thanks how possible if volumes million, it's down the levels? that $XXX Pactiv's parse Foodservice versus just so a Got how I mid-single to Yes, from And the year-to-date. And there. inventory seen at like for due is for

Michael King

generally, say volumes the disclosed I our stable. we've would Yes, that. not are at customer levels pretty

self-inflicted those we've lion's made of declines could say generally? share or the really are You choices

Bryan Burgmeier

I’ll turn over. it from me. it That’s Thanks.

Operator

any concludes for Mr. turn Instructions] conference I King further this session. questions, back [Operator As no to Michael the closing are would our comments. there question-and-answer like to

Michael King

Stephen. Thank Yes. you,

committed and our we versus months to have certainly just this there's thank amount XX we today's creating a short were to momentum like We where still that recognize just kind about progress significant management excited personally much strategies. to unlock do we that made unlock continue far value is a This today culture We are I'd we've we're to is and in that ago. the for and several And that and business. thus on team call. So certainly joining of the can everyone of recognize very the winning fronts.

a to to just today's months you thank great a for Our for be it's again, XX strategies being as in noted call, are the as Pactiv for journey. And We state I've short you conclude proactive and thank support. your always, that, versus paying part following today's a With of And on XX off. supporting we call. will you Evergreen. That ago. thank

Operator

Thank has attending concluded. presentation. for you conference the The now you. Thank

disconnect. now may You

Pactiv Evergreen (PTVE) 12 Nov 222022 Q3 Earnings call transcript