Earnings call transcript Q3 2022

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Operator

Good morning. My name is Rob, and I will be your conference operator today. At this time, I would like to welcome everyone to the Ranpak Holdings Corporation Third Quarter 2022 Results Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. Instruction] [Operator

Horbach, Sarah Counsel. General you, Thank

your You may begin conference.

Sara Horvath

you, good everyone. and morning, Thank

press Litigation remind I'd defined our we with as Securities our XXXX. begin, Form our from filings we result filed differ XX-K SEC. discussed a you results risk under the statements various Act may Actual like Private as Before those factors, statements to and and forward-looking those that factors materially the of forward-looking will the Reform discuss including of in release identified in other

Some this of differ to future cause forward-looking are the questions statements could in responses results to conference statements materially to your from subject events in that actual include and these uncertainties call statements. may our that

such Ranpak assumes no obligation and does statements. any forward-looking not update intend to

You copy the our forward-looking on release undue for posted X-K speak of the should are of which A only these and the SEC earnings a submitted in today. been The reliance that call press morning before section all presentation on we Form to to Investor this statements, of release company call. included as today's the has website. of this issued place we Relations the not

conference also call We of company via replay make the will webcast on a available this website.

that reconciliations and information slide accompanying presented to financial presentation Please is basis, to included non-GAAP table the For earnings the on information. we have a refer comparable GAAP today's release.

SEC SEC on with website. the will XX, XX-Q we'll ending section the available The for be Relations of the be or our filing the Lastly, XX-Q XXXX. period Investor our through September

the our on operating the for will additional questions. our Bill and Chairman and landscape and up our before provide CFO. call on commentary Asali, and the Omar have I results today, detail results Omar open summarize will quarter me we Drew, Bill, financial provide third With CEO;

that, the to turn call Omar. With I'll over

Omar Asali

everyone. you us I Thank good all you, appreciate joining Sarah, morning, and this morning.

fuel, on our as at pressure remains to and results under QX the quarter macro discussed due headwinds a call travel many throughout challenging food to reducing and consumer weakness in related the third inflationary purchases we the and patterns expected, the global favor rather e-commerce one experiences intensified energy impacting budgets income. impacted pull to remain disposable during than was Ranpak As Adding firmly forward The globe. of their as challenges, and pandemic. headwinds consumers in the goods spending personal

expect to consumer the begin to Due reducing an goods recently, rapidly we having and a in headwinds. of of rates recovery year impacted head to growth. network rising exit macro confidence will discretionary impact to to impact term. household from pattern and spend ultimately shift under the More willingness shift timing e-commerce the trajectory rising housing some brick-and-mortar from near remain the the to costs by return share into e-commerce and on with the to the and as Overall, experiences the we pressure short-term on near-term XXXX, expect and on items. we and is purchase lap But of the

which been have e-commerce back us and can have are a products developing challenging, the new ideally for on environment the While we growth trajectory suited back working get we velocity certainly the for environment, bounce our remains we towards. that of improve believe been

be alternative continent a at through headwinds and this viable from supplies natural pronounced. energy gas. forward skyrocketing on persist in we the has more the and Europe The communicated of ramifications prices the to up, to can expect crisis energy path impact we become the economy expected flowing are to July, energy we economy without and time, In worsen that until its Russian

hands and taking securing helping reduce coal, storage take we companies would and their demand the than all key like, region switching is to slower new are own their been inputs and have to in oil from sources natural to meet many gas matter winter. energy ahead governments action which the targets While in of energy into the of

Pricing way the The the business the has on ultimate based has to is one moving this difficult on impact or natural extremely forecast. the of headline meaningfully volatile, other gas for environment day. remained consumer and

close we and our So accordingly. are to in plan seeing vendors touch and customers with share information

reallocated sourcing We as in feel risk. to confident buy and very our our reduce paper we steps taken have

the a buyer reliable of sized secure tonnes status has to as need. us paper helped Our access we

down activity. North persisted the slower were results disappointing color, Void-fill e-commerce while lackluster quarter, American throughout modestly was as regional some activity to For due Wrapping, cushioning impacting and

New with by be encouraging. which The country. demand in and solutions, in vary and continue cushioning we our the are biggest of areas the is on region solid, hard In business and be though, continues at line levels fulfilling country working demand. activity Europe converter performance throughout APAC, to QX, which to

been the I portion Fortunately, year in region and some persist the still largely activity has substantial believe impacted worked the although through, destocking Australia. of has that us pockets throughout Nordic the

biggest Poland Australia the detractors combined and driven impacted with in quarter The were Germany, macro Australia, Poland, lower Germany by with in largely by destocking. and the activity and e-commerce

business the can be Austria, Switzerland found which continues wins Spain, as outperformed. reporting unit in and year-over-year in Japan, be source to up a nicely spots and well of which Bright was new as

is and North improves additional tracking for corrugated momentum in demand coming have year for products build and America. certain of rates America but relief signs rates lower that the The some availability us paper for improved have as Freight by to commodity driven availability. We believe headwinds ocean for pricing and lower all the as improvement, containers have North in macro online show starting costs. dramatically to improved backdrop are areas is spot been capacity difficult, continues availability

going including rents PMI of prices, over. business our as number of drive and commodities, Many improved next input costs help these a has manufacturing such meaningfully year. roll into metrics of prices pulp begun and Pricing OCC, service to and have improved car for should and lumber, inflationary

we such greater mentioned ourselves helping reduction, While I expense on focused we have demand. external factors welcome to development product would and as new been improving, efficiencies through just these, drive

starting executed flow and expense call G&A I Our being to effort reduction is through. last discussed

number to reduce past and have possible. across where Over the by headcount of the spend approximately XX% reduced months, implemented discretionary globe we plans

these requirements, we benefits to realized yet of savings notification should the run are local but by of bulk the see basis year-end. Some to be due a rate on

every to efficiency as business. manufacturing we with grow an tool extract are front, our the we On be to getting systems the new efficiencies better our it important and ability will believe support day

and us efficient more facilities Netherlands new enable Malaysia, Our which operate in and in in to a manner. should also the XXXX, opened lower-cost

us and X local lower-cost, the provides service platform product coming new introduction I'm though us meaningful with we believe help have products the to will market region. X, near of get introductions most been demand, What work cold and Malaysia path on share new about term the the on growth. combines the the Void-fill, The we in Netherlands the facility back doing the have is and these to Wrapping, gain facilities APAC front. side, We automation drive into excited chain on

I'll for Now an on results. the financial overview to Bill turn it

Bill Drew

further also our in increased summary deck, X.X% you'll our In which placement key Machine year-over-year information quarter to Omar. provides on filing indicators. some of XXX,XXX of be operating a Ranpak's machines the the you, approximately performance We'll XX-Q, results. see globally. Thank

market lower due to a performance than placement the earlier conditions. rate year at slower in Solid but

contribution. to Systems installed due Overall, by increased increased in the driven quarter XX.X% and currency X.X% on net slower the basis, market price offset positive XX% year-over-year for was while Cushioning somewhat systems the volumes Void-fill lower revenue quarter, demand, X.X% company grew third Wrapping in constant down year-over-year. a end by

by net decreased a XX.X% the constant revenue by was American quarter and In as XX% third currency Void-fill Wrapping price higher partially in was e-commerce and region. and period. APAC, Europe driven lower compared basis to in on activity volumes year-over-year, lower the down largely revenue North by sales driven year-over-year, net lower the prior offset

weakness the the in and economic in travel and categories down quarter. region painful results the as of in allocation anticipation income and general to energy remains winter crisis. all are than businesses weighed were belts to region extremely the due their of rather consumers poor the as disposable a on tightening e-commerce, experiences Sentiment in Overall,

basis on make that and X% enable with reduce of currency XX% operating to customers we inroads solutions sustainability of sales packaging to accelerate as costs a quarter improve continue represented Automation constant this profile sales automated little approximately our increased output, under a the operations. and the their

headwinds, pressure on of a headwinds to pricing. Our gross to constant COGS under constant in the a the in to The remained with implying XX%, due XX.X% lower paper compared currency combined year. ago compared in sales XX.X% currency the to basis quarter decline a COGS largely of margin profit prior on a a year basis related inflationary resulted

headwinds automation, [X.X constant material during declined by pressure a third to well on Increased which by as contributed while and overhead labor negatively driven increased points XXX the were the currency increased impacted basis primarily pressure. points points] The of some as of provided margins depreciation, margins quarter. in depreciation, Excluding freight from represented which as well XX.X% gross margin year-over-year XX.X% basis XX which quarter, relief. basis costs, as

prior the pressure the profit the in a helped improved close the On second [X.X in headwind versus gap. of region X.X prices as but XXXX actions quarter, to and in region on the per More first APAC, in stabilized in unit margins right the year to recent most gross paper do period. on direction. this cost Europe in and the from time the pricing step note, Material it's positive improved in front, work points the points] for

the was quarter was a profit, through. a G&A sequentially on our with XX.X% as cost-saving Constant by to declined ago, initiatives coupled lower flowing gross basis. are $XX.X million, currency year-over-year currency decline XX.X% The for EBITDA than a higher adjusted year margin that constant down driven but implying

health computing G&A, $XXX,XXX the year-over-year roughly grant. share and the based of for We we Hypercare to amortization more LTIP amortization and overall, out are that on of earlier $XX this Within implementation helpful efficiencies But costs of comparison efficient share $X.X the it's than cloud performance includes well which think cost directly in company the a areas as million of time well was of lean to $X are, per as million savings. as outside at price quarter, as roughly evaluate again, continuing were I the point year. course, we for

is we EBITDA. one to item P&L reconciliation. to analysts, and invest XXXX currency a to reconciliation million strictly from line $XXX Based EBITDA housekeeping adjusted note years million on presentation LTIP the performance-based include on non-GAAP through adjustments XXXX. on and One get research to $XXX adjusted of showing without the adjustment number achieving currency the of between The the in feedback non-GAAP provide constant the the

in it each newer and some this see provided previously said We for line refer currency constant they adjusted item format. folks to

comparability, of For reference the the of release format approach will as earnings helpful. well. end at the and new ease older we be this included Hopefully,

for $X.X million. Capital expenditures $XX.X XXXX third was and CapEx infrastructure down quarter driven in XXXX, estate $X.X projects. the infrastructure by in per million million of Other Converter of for quarter ongoing and of the our the year. million $X.X quarter the in quarter in from quarter third were approximately $XX technology QX and real was investment QX this increased million, and spend largely

XX. to and the the and of $XX.X in September quarter cash equivalents balance briefly million Moving improved Cash liquidity. sheet as to

of stock As the last spend safety are economic above tightening management achieved We inventory given and on which and up weaker converters. the evaluating environment. related have capital been we cases, to levels CapEx and in adequate the our targets, majority call, in of some are communicated we converters quarter's working

enable This converter well-equipped position upcoming to spend quarters, the in inventory us cash. slow preserving CapEx will

time as lower over and the utilization of given stock levels, new We will position to fleet. be make we work to lower are we'll environment the placement this sure safety a demand down optimizing discerning

term comprised in lien is facility L+XXX. is loan tranches. due million of Our USD in is denominated that X XXXX, debt split structure of a into $XXX One tranche is first and

million $XX rate X.X% in at this the exposure. June million swapped to XXXX through through place have on tranche interest We is manage rate X swapped is of $XXX XXXX. at June of X.XX% and swaps

at a EUR outstanding hedge approximately Euribor+XXX have of the cash also tranche floating. million euro coming an is is flows from and effort We in tranche Europe. to XXX This

in $XX have drawn on zero XXXX. expires of revolving of We which credit, our line June million

of level cost today's is have USD XX and the we place in interest Our over million. just swaps incorporating annual at

currency constant the net adjusted end on at LTM basis based quarter. a Our leverage X.Xx the on reported EBITDA was of

which end that first the is -- to our lien into From a first-lien more ratio X.Xx, covenants perform leverage and facility X than excess or generated XX% turns. note X.Xx. only calendar of bank if maximum of cash standpoint, period comes leverage at cash adjusted ratio of of a leverage use to covenant ratio our EBITDA was we the revolving And annual an a our primary which our debt, had springing down of in covenant, flow pay flow debt we us the above the we percentage year excess dedicate requires and calculation in our is play

expectations CapEx taken related the additional into to of down our the test. year result having working currently anticipate and deductions on for pay Based do capital of remainder the calculation, a any and we not to debt as the

of liquidity, runway underneath because to make it environment. I million any think summarize, To and we covenant. more make believe $XXX macro near-term clear, important have leverage We than through in this to headroom it's substantial plenty we no have maturities

turn before to move With it Omar we questions. to on I'll that, back

Omar Asali

with I versus X the a combat connecting the Russia. are much in Crimea to blowing months I where Thank level the more efforts Bill. biggest the to has inflation. up first, another the pipeline Overall, you, Stream second, ago, Fed of now aggressive to and escalated the as been say And changes war we bridge are, has think few destruction would North its about of

ago, financial increases leading costs consumers. rhetoric in reached increases leading the and in for higher across capital wealth more to rate at in is capital, to XX-year businesses funding issues trade global massive the dollar potentially in resulted happening globe. cost instability The significant can substantially of hot causing destruction logistics The highs, was a markets This lower. the hawkish has and for and is rolling in and is as to indicators economy suggest in it costs appear job time and and see not over costs be stabilized as input key is The U.S. when year our our I weaker. most business inflation nearly the market a lower. the Freight heading are have and meaningfully

the than the year. say past over consumers to North the the I of expecting Overall, have think softer was deteriorated through going would particularly but been e-commerce, across board, I levels related of as the more I American second half couple market coming my region stabilized Activity and and pricing in and of overall to year online at are in for has kraft is end next year. stretched. this Paper is the begun supply corrugated the and paper roll as lower view, demand substantial over paper into months

We're working with testing mills the capabilities on pleased their quality with and to product are coming of various market.

As paper the not a increased result and believe we off levels become of year, environment margin the let sustainable next some enable should into to tailwind pricing that industry pricing expect we reach us back going supply, were temporarily a of as given go backdrop. believe which claw we the did we to

through to where business worse to well digital thought efficiencies our and being further on I We backdrop July spiked focused at given to claw of levels pricing than gained Russia the off line completely so Europe shut drive new as extremely do margin. again back deteriorating be be the economic we were volumes attacked. well as in with introducing new slightly relief. would flows extreme end we We're was by believe the natural pipeline as Stream roughly Nord and is gas paper are aggressive our as and activity to we're to positioned products levels, transformation

in been levels hit less lower Fortunately, Pricing half level elevated, really storage schedule extreme activity as August. and up. experienced is targets have but is of of than ramped industry ahead have been shipments the still has LNG

We the and our de-stocking in suppliers customers most going at all very suppliers, spend region remain on is the our we and levels, lot our meaningfully minimizing cost energy the the also economy. current everything resilient impacting in in product recently, overall team I'm the down crisis to the paper the on continue spent with in and access my to on in end endured. to contact close region and environment. need. time Business a opinion, about ability war have stable the is ground we Activity the are of of the good how focused I've and region robust, in not and while on feel users given keep and

to has vendors the minimize a great risk put deal in reallocated and supply to we the buys for into XXXX. to other effort Russian have region, been Our in paper completely adjust disruption and of supplier of year this our

we choppy across sourced to our self-sufficient energy have countries this positioned our and from to weather mills those feel and to mills with are mills out of reduced that crisis. vendors resources recycled virgin more endure paper We spread exposure on countries standpoint, is in we a and those focus purchases to A environment paper suited winter. substantial an for amount best German have vendors different a best are energy the allocated

region the albeit has levels. recently, been in flat pricing Paper at high

seen shutdowns some have some virgin economy. point. due as be down a this some a waste inputs the the We of on also sign. inventory pricing good a has but through paper flowed start moment, dramatic come of of sure but good offer such to not to recently, to though moves, the lower to sitting months find recycled paper of We're suppliers have and mills do This as and slower best vendors data couple maintenance aware I not through I'm preserve their a will price, at to prices,

economic testing longer growth chain. that term, the believe one, continue areas value The positioned overall we drive and over as the we the such a cold are in weakness well environment but is will and endure investing automation to maximize and

opportunity I XX believe years. as next think investments a Ranpak that particularly pause is mistake be would to it our to the biggest the over automation, at here, I X on

the we new quarter our the EBITDA still to We guidance of lower able to end are We adjusted expectations reality. believe updated of our reflect achieve last range. our

the ago, top However, expect the a to months in line our pressure Europe lower what compared U.S. due results we some we slightly weaker be provided. additional to considerably below and few end market of to

end activity on Obviously, the we The to limits assure and distribution on the has difficult achieving changing Ranpak visibility is back focused getting of. with you, to model, know user the are but results, laser I forecasting happy environment ourselves somewhat path usual. which rapidly not we we the capable our are made more results than

path challenge, a our is environment forward. macro near-term the I'm optimistic about While

Our input in our and North in costs are moving in America Europe. stabilized have favor

the are the year has that all plagued Europe end destocking us APAC. of We near in and

We still while taken reduce have to G&A steps in investing business. the

a digital transformation largest planning. business We to to are technology efficiencies upgrades, show have done the and XX complete procurement, start and which of into months through will some benefits now our production related

QX. in neutral key new favorable. products contribute endured begin while live systems have new more We we in been we've will year, become will headwinds XXXX. our a exit and XXXX, to largely will comparisons go made And our to next of us year, Overall, These for myriad much investments positive including many as absorbed have this in that be

Ranpak We of in generation. anniversary outlook. fantastic remain a This history in of and long cash growth, just confident We has business founding track XXth profitability October. very celebrated the our record a with

questions. the up Operator? Now let's for open call some

Operator

the [Operator line Panjabi comes Baird. Instructions] And from your from first of question Ghansham

Ghansham Panjabi

customers? while at the How way first on with is the just have X% managing cost also that question are machines the of acceptable you I return sort the strong today that placement, plus the we placement third the cadence you have quarter. obviously ensuring in world no very place to machine guess given thresholds, which you at

Omar Asali

the opportunities we've about is it's, end you to but partners fee it the And environment machines. the The the has way us pay pretty our frankly, do thinking may business monthly a been -- new weak cost Sure. despite recall, been is distribution decent. as for Gansham, user nothing,

activity is high progressed. Our improving kept and the year trial throughout the as year

customers has trial the we've than a ramp-up bit seen these What real. longer. what in is bit longer is the with of been cases, some historically. a have wins some Our period period And new different is been

bit that would what's more placing revenue delayed. and we I So machines say going the is is more a on little are

And year less machine your is paper really revenue a double accounts revenue that in hit new bit. delayed new has opportunities, and where impacted a volume, little these bit per are consuming existing and a less quite

And And that very in going we've period will in we world months, we're very, of I these of think let's displacement improvement which the to up are see following meaningful wins volumes you're will call has that I but ramp-up help some suspect had play not focused the We volumes, more the how appropriate. showcase wins volumes. that and some metric on expecting crazy we're been the get to, ramp in, it, that that given as normalized normalized as expected.

Ghansham Panjabi

you of then obviously, to that's for helpful. was occurred. kind of mean, I back lot year, things I to And question, on going a Yes, my this different second think just ask as

that unfavorable You in and had et implementation, cost hugely the you cetera. SAP had was price macro environment, the

to As so you maybe back worry at what just cost about price are about, then -- is the this this normally point? are for you flipping it the think outlook how positive? -- is go And less we that and macro how approaching approaching XXXX you which XXXX, actually we about

Omar Asali

deliver the important KPIs, better for and us. expect et and point, because a measures, Sure. started in I benefit efficiencies, SAP and measurement will it's of faster productivity terms already bit is quite the it Well, of last at It of driving this this of months, that cetera. in implementation, measurement to continue, couple

speak implementation is we be as going that and think I a to forward, going tailwind. So

of increase pricing. better I us annual cost side think help supply/demand as benefit will as I volume so the in terms the price going that on evident somewhere be X% given initial in It think U.S., is of see the to that in increase on along we're is In is well kraft the capacity to going the side. volume cost production or get dynamics,

The what been related Nat has reason market. very not it's modest Europe, we're volatile. these just to terms of for the more us so frankly energy are to declines gas pricing In far declines. material, stability seeing is in the

few from So lack than pricing it on disciplined a prices and months the we have it's And or speaking mills existing to here where of formula. winter ago, given have they where of of much today, it's they what I was going are spike go or whether knows down. visibility, kind to better think been depend that sort stay but who

on depending we some may corrugated the volume in nat So to gas, also us. that's weakness see of but kraft help and terms in players, going in relief, Europe

is 'XX, So overall, look we're relief I in going relief, as Europe. I our to and a real modest some to and case call side, made in maybe be think that at biggest there it, is that on paper relief COGS the there meaningful see input let's America,

top our in well, products volume them well. new side, the the should we're market in volume quite many as had going invested of really impact we've and given thing have this these XXXX, comparisons. bit that year later new this easier year, we and early and year We the lap, of products, first are a to have this year as to On coming is

well, we In terms customers COGS spikes given in as clarity. and to of pass of more would to couple of until a terms we going the inflationary customers, our not these get last if we hold of our our supply. lot paper I the prices our be I surprised If of we're relief suspect our to that get some pricing years.

a year is materially to us. XXXX, than XXXX going you be this been together, for we better has if So put tough picture feel which whole

Ghansham Panjabi

the on for Bill. the you're -- car EBITDA currency Bill, question a just for million. was a And referring was third $X.X right Okay. quarter? Is that roughly adjusted to

Bill Drew

Yes, Ghansham, that's correct.

you got so in that the some impact just out the we'll EBITDA. end, it so at product new just then which you And also, for on can give as accountability. the and have well, the And break the reference We've the exact presentation. format, we in release and the provided on

Ghansham Panjabi

Okay. you. Great. the you week. conference See next in Thank

Operator

comes Craig-Hallum of question Your the from Greg line Palm next Capital. from

Greg Palm

just I said on this any what headwind be if you mean just can price been materially quantify think, year? guessing what XXXX this in of has you year, the any wanted starts headwind, meant is there a on I But basis. price that has you just I expect that volume previous everything you to to up all maybe follow maybe to to XXXX? I sort quantify dialogue. XXXX. just sort headwind I'm margin way of the been Omar, that than or EBITDA way else guess better normalize equal, the first

Omar Asali

XXX of of XXXX margin. frankly, see and Sure. was I to referring year turn for and many maybe think the that hit I mills. bps XXX bps gross is precise of in paper And you numbers. to them in or you're probably terms right, But to somewhere it, gross that I past between XXX call I'll start, report months in it then mostly to And I'll give XX XXX over past, outlook this our margin, more the going publicly, Bill think so. to headwind margin you'll EBITDA to they're terms up my

gross and have that effectively So dynamic demand bit into and more Bill more margin, you limited, and complex given the mills on when the supply/demand the in I'll year, go the again, of leave But situation much our energy supply given decent maybe earlier was have still give a you was precise suppliers. numbers.

Bill Drew

Yes, in Greg, was Sure. line. Omar, actually right

bps, material and it XXX about XXX on about on alone. overhead. to X cost to a point We've gotten help between the and automation, hit of over depreciation year-to-date, the to based bit point gross materials get margin So cost But then has labor to was being another just the points basis been little [indiscernible] year-to-date.

these to the QX mentioned in to as beginning the If as we're earlier headwinds, the lap quarter at in we started we're less ramp you working up QX and remarks, really of which onerous year. last look increases, though, where some was of

quarter, headwind. the XXX it in about a points So of was basis

is there. change of rate improving the So

Greg Palm

Understood.

you a That's specifically Okay. see greater recoup month again, X you just super is spike I we there about if helpful. XXXX? last you prices gas in just can in And there don't prices of Europe, expect given do there talking relief up over dramatic assume over most that prices or just of change the that paper in or that guess know all still. And kraft environment I gas? any why wouldn't the in reason uncertain

Omar Asali

The So will quite second bit, spot in help will terms or levels that Greg, little profile our stays on margin relief improves meaningful at going of to pricing of nat reason type these you're is and not we on to gas is in get up. the is, it that a we question, winter to a position if what end we going counting sort bit. on Europe no where of are have are say frankly, or

by Every last we months, spike. it was the followed relief a got few time

So just taking approach. assume wait will assume talking we But get and you better we're can here, assume stay we reasonable, much than if yes, winter relief prices we we're then more what is if see about. a

I as up not what to will far it. we counting margin all as recovering on most I majority erosion of of I of will it. this this all would and stronger say the I'm deliver we of do XXXX, on recover saw that Now us year, be more able in recouping profile you recover. think we give here I'm will saying, we based I believe sort experienced comfortable margin right the now, what know much year, of sitting a that

Greg Palm

trying sort implied of Is it. year. EBITDA adding mean to basis XXX just it implies? margin XXX the is points year and the I Got what as for that math this easy out as next figure to

Omar Asali

and think we the I get reason paper and I costing. math. is, about talked there correct, And obviously, that's paper supply directionally,

container things very on the us factor this giving ballet right been we some new all that's is big relief. So -- COGS. paper in But way, the things are just given trucking, then disciplined like SG&A. costs us our trending in And these how biggest costs, our freight, have for world

So if right, think it you up, add I all directionally, you're Greg.

Greg Palm

All leave it right. Okay. Best of I'll luck. there.

Operator

Your line Sachs. of next the from Adam question Goldman comes from Samuelson

Adam Samuelson

than -- maybe placements a, placements the earlier, the to context I you taking are they're productivity, question X around are and And how ago So provided guess, But of the did? lower of to X volumes those some or you you lower guess, bit. years volume a Omar, little ROI throughput. how if placements newer back payback wanted I potential less I come evaluating some having

And then Clearly, for longer in installed I machine quarter the of in a that's total in per down considerably. pretty the kind just up the mean, down paper more than is installed been that's volumes the with year. broadly, base place XX% base

you Or throughput? think that end a consumption Just the anywhere the -- the you do part have that your what in level? seeing destocking paper not that's do think on what is near do confidence customers, distributors you stabilization down purely that just and such you're of

Omar Asali

the frankly take but of the a XX us, is in activity long in be geographies us our with almost We in but of cycle. There's to Europe, are believe industrial couple a have Nordic where think like largely just now. declines as Poland XX distribution still that where declines, the trying there severe. as in It's of speak and behind and majority been big here, quite Sure. behind is may partners in piece, us. to the of region, it in. are and also some e-commerce, start time, in customers, the as doubt e-commerce no particular, have we continues big that's chunk our weaker not destocking, be And all chunk points. months I'll it, in Bill Germany, the a it, they bulk best our in chime The to Adam, piece X, and destocking get in in places volume that not some only of There's then a triangulate well other of we we destocking, the economic is took pockets

that in few impacted a and days We a give close X, specific run places a like X and Europe math. you X to has hours Eastern hours facilities volume. again, were XX have day some that week Bill today that Poland that the week, and can really a more war, And days running are

picture. that's the So volume

little terms about machine In it, months. customers few of bit it these with is payback up. of prolonged effectively, a and by some how a placement now relates we as how the ramp think

of in bit facilities them X many from call it's converters ramp little either going going placement customers new it's to look the to a cases, up. we been if customers. know new at for or And them decent. we're take it that time you last, existing So our months, I'm putting to In

used Why? that of have. In use products they're still through other some to inventory they cases, they working Adam,

equipment, they our start And a to or in saying, or win mandate So that bubble incrementally it are putting we're customers they're destocking before switching. like there. solution "Come airbags in going and we're putting on-demand when I'm stuff switch. place And the reason you the there is

of that one; from combination our that months of the it's standpoint, are to order win months. payback then look And a is impact of hurting a we will But few by volume sort at ramp-up machine. comfortable our We ramp-up the revenue it's by in increasing that few two, if the per you delaying a the account. and delaying

So they're accounts the saying some where to are and few is of up these to decided I'm the thing levels ramp that next going to is number appropriate the what and we this machines. the given that going shipments of we get doing, place if itself correct, to in of new correct that's are how months number think

So we We a think few think behind us temporary a with that's is destocking exceptions. the largely thing.

think and future. going pieces is these predict. that normalize volume X So last and other existing But volume to is that where we of normal for piece to the new much with help going should are with people going where too in we're the near thing forward. them? given still to accounts better the accounts the macro spend that level right is the the the these backdrop, us forecast economy pressure want of accounts? Or harder start us X normal, is given existing unclear Are The macro exhibiting one months sort the helping is few to to piece things

Bill, I you don't to want if know something? add

Bill Drew

the big with you've your XXX field, placements got right? in new the when you and XXX,XXX already from Wrapping base, at come I volumes the that volumes X,XXX base users, math So are meaningfully year placing numbers the the growth in really when and to you're yes, the existing particularly you number into are at the overcome the out down impacting, -- are driving the think there think the obviously, e-commerce I got a right? down the existing machines that, you've account is math, is in in when XXX,XXX year-to-date, covered which things, you end can up. But that tough see Void-fill year. the of and particular, it's for this

they XXXX pallets of and are back. bounce machine been below between right implies we We the for forward in levels, the right that a some data longer we expect per in this with the that pull expect term. Void-fill that's where down demand have Wrapping the wouldn't It's where over now destocking lower The that were painful persist now, to are sort would think, us year. and just, consumption I we the

placement, That precious But put that there. is as is we new the placement. about machine paid to far to the overall we capital as discerning I'll are very one out on back machine getting want we're sure thing adequately new the that emphasize us. We capital make

their thinking business conversations business same not machines of the was sure that indicate the continue in that also back to they distributor folks partners going the with we're in to to in is their there right? number they machines do end elsewhere. we a getting returns they anything get deploy of XXXX. have want We're So machines make users there. trajectory the understand, the have, them some And maybe their need may adequate and many field as structural Do was currently and we that pushing to that those as last year. take on to

now. would focus a more of for that that's use a efficient us, big be of area much And For capital. really us right

Adam Samuelson

for helpful price/cost would historically, procure of ask basis following thinking annual kraft cost I your just really, especially you a the And fixed of be had Or of price XX paper procurement majority question. to XX for follow-up and to could actually some you in good just that to pricing of all strategy kind paper an volumes on on That's company large secure difficult Do into a Europe of If color. given back kind months? think XXXX? you it uncertainty, the the go might so months. Okay. that at macro kind the that the its visibility

Omar Asali

it, we is we're in a right be depending just we as annual. speak, now months tell the pricing, And with cases, and in arrangement X way agreements. working XXXX we how world revisit Adam, I suspect we months energy mills in succeed will many will knowing you, our pushing and for negotiating X volatile is. So I the some might call having, cetera. et maybe that on

I to to think expecting annual agree all be unrealistic. mills agreements would

general, to maybe something on their and be depends It some, and what will. energy least XXXX, might we're stability along and expect there will energy that's so Some that in as these do. on. think attempting know, At you or their But be vertically integrated one situation reset I in lines.

Adam Samuelson

color. it all pass it. Got helpful I'll on. That's really

Operator

comes Your Securities. Crist Stefanos of the question from from next line CJS

Stefanos Crist

versus Can other seeing as you just what paper the environment in providers about competitive talk you're plastic? as well

Omar Asali

in a gone am to also seeing paper up So plastic. seat, my has not switch from Plastic pricing. I from

don't know talk the about nothing to of of reversal cases the a sustainability? of here for love I It's noteworthy. a not lot willing hear a You certainly to out think and trend. is one ordinary. and has not And customers people problem, are I there. that, seeing That that pay been we're

and In increasing. we're something adding the been products, think and frankly, we're aware innovating. competitors terms investing, new we're And paper that we of space That's solutions. are of. lot of to of before year We're and ahead in good paper fully to curve. a is competition a competition, their this We've good innovate trying we're a industry and add

said, that bigger by is, away. And level attrition. to saying, would are our the as problem way, sort see. like we "I'm the switching attrition. existing are wins In our are of our than But wins big but don't segment accounts the it losing continues within don't we're the where accounts. We accounts, volume seeing share terms to We get of to I now see not paper to stable. market slow our at be Stef, of declines see us attrition our volume We see

us the majority frankly, hurt So a feels share good And of the that's over-indexed, Europe, has places somewhat think to company this of these little as year. more. overall that have e-commerce just and not market I to terms and we volume our It's our be bit picture stuff a for stable. in in to the been are

Stefanos Crist

already? That's should great but QX, talk just Can about we those are we're deliveries know have a you visibility Or that? I are conversations? month for do season? And your they into think customers, you for having starting just holiday follow-up. a how you color. already the about the Just just

Omar Asali

trends relatively be months. December see because it's visibility to about in October, peak difficult. of tough on. but and month It's We're But sort and given the we few very just really weeks we're this and change, say some the I'd you, how honest are with see And I optimistic the the quickly next of that still wait year, world the we the rather evolve very, been things before have how real has from season. season. would Yes, early. November I'll so volume and holiday predict important forecasting

to tough a it's clear think give you I So answer.

season peak Stef. the in early too it's think I

Operator

this Mr. Bill some Drew, call no closing at you I'll for are questions the back over further remarks. final turn there to time. And

Bill Drew

and next you, thank Thank quarter. you for joining We'll all us Rob, today. see you

Operator

for This concludes participation. today's conference your call. Thank you

disconnect. now may You

Ranpak (PACK) 1 Nov 222022 Q3 Earnings call transcript