Earnings call transcript Q4 2022

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Operator

Hello and thank you for standing by. My name is Regina, and I will be your conference operator today. At this time, I would like to welcome everyone to the Ranpak Holdings Corporation Fourth Quarter 2022 Earnings 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

like Please conference go now Horvath, to turn Counsel. General ahead. to would over the Sara I

Sara Horvath

Thank you and good morning everyone.

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

of your forward-looking forward-looking conference no obligation Some these statements. the to that in such statements not are results does that and our to in future include from to questions to may cause Ranpak and update materially any uncertainties responses could statements. call assumes subject intend events this statements actual differ

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

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

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

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

Chairman CFO. questions. update will outlook up for I fourth the for results, on summarize Omar Drew, and additional call an XXXX. results strategies have Bill detail CEO; we the today, our and me provide provide before issue will Bill Omar financial open growth our quarter Asali, our and on our With our

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

Omar Asali

Thank today. a Sara, for challenging and joining us very leading you, Thank finish to frustrating everyone. weak a a you had quarter We to good morning, fourth year.

headwind battled quarter. Our after culminating headwind in team disappointing the throughout last a year

consumer rates, in on goods took inflationary spending volatile interest experiences, hard energy in Europe, from to demand, especially our and its and Soft pressures, markets business. business biting switch toll

our translate Despite could best we not activities our better efforts, into results.

season. us to in XXXX. determined the better thick are results in bump we we the We quarter so did of a in expectations, as deteriorated in holiday into off and to with company. fourth as expect much XXXX see fairly in fully not got I Unfortunately, do activity started line quarter that materialize The but the of deliver the typically

into the Making the inventory many situation already New exacerbated shipments lean, worse, with the on as little the intent possible, year hand delaying appeared customers which were Year, demand lower it environment. also finishing on as

revenue driven was Consolidated on in QX second half. to by a driven decreased industrial as currency activity the on low we down across compared net revenue a full really in the largely XXXX. pressure XX% year a perspective, experienced holiday a both constant with weak basis weakness net globe From by massive constant unfolded season the currency basis, a X% regions

operating a as constant destocking the lower uncertainty environment. due for in on to economic results finished X% down the on and war, to down [ph] meaningfully pressure lines and OPTS by was by as driven note Net basis APAC cautious the the destocking general industrial energy created and inflation, year, economy as activity. a product a QX, XX% Performance constant revenue dragged driven a retail and on softer in Europe was currency relative on basis. region activity, currency well

and year Full after cushioning. and down void-fill business outsized a also by America the and XX%, as X% were wrapping of of activity XXXX sales finish e-commerce the softness downside. driven down with in in wrapping with in year, America void-fill a by the an business growth at surprised meaningfully reset pressure experienced meaningful North driven North only Our by results were partially offset

new a year wins the XX%. we million business offset in of achieved we constant not of year-over-year in were and resulted ramped were Many up Adjusted terms get slower $XX.X of enough e-commerce much the currency XX% that down was margin throughout serve. to of general and malaise the in unfortunately EBITDA areas to the

revaluations EBITDA personnel. to in lower year sales decline ago, investment costs, compared was exacerbated a and due to input volumes inventory Our in higher by

was EBITDA adjusted million. year the to XX% $XX.X down For

of many was that a exacerbated and the it enhance paper many more our vulnerable impact disruptions some the to war left upending long-term, made short-term. further but of as causing by our over and these meaningfully the to a ERP platform energy business headwinds. year investments Overall, We us with and quarter were engulfed of went we The sophisticated these were new with forecast sourcing. to largest geography, in adjust the us live the crisis our an fraught

to believed too then to quickly targets to had were time our inventory the goods Many the largest up purchase as work stated, it the at shifted much as costs of conservative consumption reflect unsustainable customers to to of prolonging already environment, behavior [ph]. and general economic what same pain we uncertain experiences while levels. opened input level I've destocking down Our skyrocketed a invested economies in the from

what experienced enter we different operating XXXX, a environment it's XXXX. we as from in Fortunately,

headwinds, this in were and As tailwinds our unique destocking costs these events input from turned many and have already of to particular, year. headwinds

translated finish to the experienced than robust to anticipating. we were into a pressure the XXXX we year more start has of Some

relevant January comes topline was was it January profile of XXXX, share in I peak This we combined to February paper and at levels we the top XXXX, of we beginning are down perspective, and what in were the seeing. are of than which Ranpak. but a with February margin where lower From for a activity are move given thought pricing, course currently

is the the weakness has and records? of around environment I breaking XXXX not. No, our operating the in it feel the environment. the believe is don't saw start trajectory reflects with of QX my to opinion, think business. for but XXXX back a turned get together the XXXX, you don't completely course I to viewing of be more also I expect appropriate to In do Now, demand results

color the I of to it some think Given nature QX jarring to share the the results, year. is start important on

for our We will the XXXX Bill's guidance take after remarks. you of rest through

and on focused the discussing back have finishing for of we're margin to benefits. some harvest growth this been our year, investments execution years, summarize, couple past and to to we Now of the the profile, on improving getting many beginning of

deeply do accurate believe are we I'm I we disappointed XXXX, a it's in or as where While an company. where not depiction going are of

the more info quarter. with Now, here's Bill on

William Drew

results. you, machines information which increase, In some operating see year-over-year on you'll summary Ranpak's our globally. rate, provides deck performance albeit placement a indicators. Thank X.X% filing continued of our of Omar. be its further a to at We'll over XX-K, the XXX,XXX Machine key also up slower

and CapEx. and actively being year underutilized, refurbishing retrieve Cushioning in systems field, slowed grew and the out was machines improving them X.X%, putting the Wrapping utilization systems Void-Fill believe with the them we from to have of eventually goal saving the down been back placements X.X% to that increased continued trying are field X.X% finish installed on ideally and growing bit we activity its year-over-year. a lower as expansion Net

constant the the revenue a year driven company down fourth to on on net by in were X% year for down was constant a full all a finish Overall, quarter regions, currency results currency year-over-year in XX% softer basis, the and basis.

a constant the finish For a decline basis. combined the full APAC to revenue quarter, than decreased The year basis, XX% currency years as regions bringing was the our to weaker XXXX year revenue Europe those combined to and a constant relative activity anticipated significantly in December reporting reduced in thus X% on currency on of division past.

anticipated the as our quarter X% many prior full in decline bringing decline season of challenging leading holiday extremely users, in year at a the than the results a the versus had year, quarter of America of a region. was end to XX% to e-commerce robust weaker North

the and was of pressure down void-fill most while the areas For the was cushioning in quarter, slightly. wrapping

XX.X% drove price. of of Reported through our mid-single-digit as the flow in approximately decline gross were in quarter prior margins volume of by for lower points of versus majority the offset the XX.X% the margins, less year the

We the carrying points of the approximately of through of value the X.X paper related items, experienced pressure markdown Europe inventory also including due as industry driving in pricing to costs paper inventory flow lower. landscape energy lower

million the many a or RSU freight year-over-year, move others. headwinds as We and believe SG&A in to expense. either paper reported will gross $X.X profit XXXX quarter includes logistics, This are dissipate the declined that trough be of profitability basis other for the quarter direction. the pricing, among to on the largely beginning due in energy fourth lower plagued

as XX% to benefits continued peak. We QX compensation lower have however, sequentially, and our make QX than progress our were

are we lid environment, areas tight the given in keeping needle. only and feel the truly that can Obviously, move we investing on a spending

result EBITDA on or down bringing in million million, As basis adjusted to a results margin, a declined fourth year XX% quarter full implying the and additional XX% to currency a in lower the quarter, sales $XX.X to cost absorbed of a margin. $XX.X volumes the XX% constant XX%

particularly demand by from where saw was in as December fourth standpoint, quarter peak the quarter by well quarter our the years is went unfortunately, contribution most the weakest the EBITDA as input we it in on, largely robust driven costs. Unlike in most the an as far, our deterioration

strong balance Moving leverage on of XXXX to us to X.X which $XX.X times, a out we of X.X times cash or the no our on credit adjusted and agreement, again million on a sheet room bringing liquidity weather leaving according storm. net our completed and facility, an liquidity, the X.X EBITDA with drawings balance significant at including our revolving to LTM maxes to the basis definition times position credit

ratio focused While rapidly strong recognize to importance liquidity our to less. leverage have and the or returning turns maintaining of room and position we are cash maneuver, of we three targeted on substantial a

us short-short-term key environment value navigate strong and customer initiatives sheet working Fortunately, XXXX over maintain a the maximize room that will the we believe pain margins some and we capital, provide and invest in strong to entered to balance fund relationships with which longer-term. absorbs

pay converting our Europe, front will measured a and end XXXX. on We've cash converters progress on of and facilities, to our negative stock and CapEx investment completion America converter on good progress inventories dividends. investments take on and to made safety us our following we'll levels paper of hopefully in enable key will We the North cycle are make continue more into to the the a impact P&L at spend this in in approach start now point where abate near-term

lag a there price way down to while be QX passing preserve up, consciously a begins recapture lag margin on temporarily on The of expect customer as way pricing let the and was of the relationships. the paper some of environment we us us there to we we in benefit through to go

that back of environment, to to ERP with close previously out process. system this transitioned the in year this year Before in I a Form end closely which the are wanted our new SEC on filed host calls, are we at discussed we XXb-XX have these Form it as KPMG XX-K evaluated complete. update infrastructure to working been on end. we new such be processes Because that to to an and provide morning. where in audit I The turn a of changes auditor our new filing have our we delay, in nearly with and resulted Omar, year QX the and digital We've

that [ph] internal a the other financial over expect stems process and file controls material pervasive report the reporting PPS audit of to ERP number process, nearly various XXst. the over Form the our weaknesses, we had from we of XX-K new by on transition In IT complete controls a control to categories, much March intend our reporting, do The our financial which and and impact is to systems. XX-K

the to of as December possible processes our in result the were on we a issues We for any will in As our these XX, ineffectiveness disclosure the want changes procedures plan effective not XXXX that as result, of and and information included at clear to these as control release. year will therefore and today's make expected internal remediating XXXX. December financial of report are controls to promptly not reporting and that XX, control

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

Omar Asali

Thank you, Bill.

that share focus are year, maintaining past beyond. have benefiting critical to gains market the year areas to strategic those hopefully with lessened. as invest more value from decision and made our this investment in emerge maximize these only on and we headwinds accelerating Over focused XXXX a momentum relationships drivers and remaining we In anticipate measures to to

million top we're of currency adjusted implying to line to a of XX% in $XXX growth This area the a EBITDA reflecting $XXX X% year $XX XX%, growth million anticipating to and of million, constant of to XX%, revenues million. on range $XX basis,

Our line reflects lasted we growth experienced top as growth increased of well that year by expectations our our we volume driven throughout XXXX, for the as products. the to return as new destocking demand

place the putting is by XXXX year and adjusted pivotal our volume as bulk point the contributions for due will positive expected have input for and margin of EBITDA reflects favorable the a come as expect year investments to been Ranpak the platform growth turning from growth in we gross Our in finish that expansion well to XX% cost operating more improvements discussing, increase, leverage we from of environment. to as end. a fully infrastructure XX% we

and of largely now. of complete in have by The Connecticut, XXXX as will operations in benefit which in right most middle as We transformation, production automation a Malaysia. facility renovation Concord the new digital the Netherlands, new important a headquarters in well is in headquarters R&D our of phase in XXXX concluded our production the global which and and harvesting European paper is we

bigger These to believe in tremendous been to team years I I by they but when on a are and have of the of believe achieve were I goals, which of put the for continue over undertaking company. first past than projects the couple outsized lot order our the joined stress a us organization, all essential

I the frustrating, financial than believe company we firmly Although few significantly better were a of XXXX are ago. years are results a we

apart. Our systems and access to data day are and night

documented pursue are ago considerably to repeatable than years not and the two have and the opportunities are us better The organization talent chase. across levels processes we improved have Our been tribal are team rather and also of to would enabling that knowledge. able

is of think I that performance beyond one XXXX the drove and terribly As it that better will each year to the I get identify XXXX. helpful disappointing the outcome, status going really headwinds about what XXXX is I and of and be key into far comfort under think how

sophisticated great continue will First, better extract operating year our year ERP went the have we with a more throughout live now our transition into the into the a enhance quarter new and get environment. in brand SAP We turning efficiencies. a in system We XXXX. under new and made strides of way get first efficient, and to belts and to performance

that Distributors the a the On products, and visibility distribution the factors some users into encouragement. hand impacted good end are demand it went of side, model on hyper customer induced with The product forecasting. demand sell through throughout made to Destocking. that and year the COVID few XXXX reflected stimulus there across environment. have and provide inventory levels tricky which on really our globe

across a due patterns say to the we where exhausted. and majority war overwhelming overall We're Ukraine. slowdown environment at macro in This point by market destocking and confidently can the now has globe ordering the destocking the more returning exacerbated normal further period was the in are been of uncertainty

In fact, being week a February a distributors position many low February has where finish the books we and of the in believe, believe their as January January seeing products topline exacerbating contributed markedly to not perspective. our end year year. on the of I to at in have we to This, ended were year in and from with line a to lot inventory XXXX

and travel Consumers and changed In reset. were of at is that XXXX PPS the two and deployed the of been they with Many dramatically. sitting in goods. for experiences items that more ordered home Consumers the again had those more protect the Next being are enjoy years. free durable expensive, e-commerce consumption craved two larger to spent lost savings years our solutions used to prior. delivered years great and excess

consumer customers patterns but of e-commerce to behavior something to of expand. them to tricky, on replacement efficient normal us goods are this closer many the types will open I like for they where always become much these reemerge. more buying and the our help inertia as think point continues facilities new It's call ask to general hard bottom the Also, as we to is of and continue as

Churn.

By throughout been challenging attrition low. we of in our and outsized believe churn existing Our this our relatively preserve investing book has of and customers, period business. we sustain able to an were portion

back believe will from because I painful was it bounce of While strategy perspective, the we a we margin employed. faster

sustainability cost the Sustainability. for to disrupted teams. focus of In backseat the as environment a massive procurement and efficiencies chains, supply area inflationary took

stabilizes, environment back and America the with I is can on North wave real. coming focus vigor more in the is that much As say sustainability confidently becoming

ourselves to positioned benefit, I'm have focus. well this so looking renewed forward to We

really cost On increased comes and demand and dramatically down environment energy. it the due paper in North paper Kraft side, to unstable outsized Europe. America the kraft Europe XXXX in energy prices on to in XXXX and

meaningfully in resilient, While the margins. most remained rolled on other of kraft over gross back half paper commodities XXXX, our weighing

is into This from there paper XXXX changing XXXX. the and by environment on putting supply/demand kraft waste well. the a on U.S. perspective paper us prices Europe pressure lower as face The a in going tailwind weighing is far as energy is we cost in and headwind greatest for the paper in finally turned into has market

seeing meaningful the in to We in ground profile us what are XXXX. on cost be the is expect gives robust compared and XXXX. able to This confidence achieve most more savings to profitability already we a

certainty only the compared but from Europe winter, is European Europe peaked are summer. position. where will we can where we XX% better obviously are sit in we This I and volatility now to into going energy in general could were where the the a and over very be prices they in Energy there in quickly markets, from Energy. change down provide far

holds, but be in baked upside haven't persisting if environment year, the would to this environment there our this We throughout plan.

and Finally, automation. the at and the will be about breaking that are on mid-year for talking point we past pipeline will products, Automation to on facilities rate we've as exit We we the something right we we have have now run where even XXXX, years. number right We're a drain scale. basis by a EBITDA. is been the longer of automation team, we building no believe the a have begin

context, significantly we be a financial automation, XXXX, drain profile Getting on overall of $X be XXXX. headwind for back is to high total automation million black for and that expect million a and the teens in a CapEx our EBITDA changer automation game desire, as and it improve to into For in and would was we our XX% margin of sales. percentage ability $X in XX% the on get EBITDA EBITDA lowering on our margins trajectory PPS, to us

emerge a living activity first to normal rhythm environment be to operating world its the the challenges do with Obviously, has the but levels, We operating seems established. produced adapting around environment believe weaker in is macro well normal and has we the more half happen as Europe could reflect and has more XXXX will unfolds. expect unknown. these short-term to uncertainty war what a a been the that

track in into I'm disappointed in and extremely quite XXXX. we deeper strong New XXXX, bit back for XXXX focused our U.S. get kick the a by is value Overall, as expect I'm maximizing and on on we key getting wins but business shareholders. to in activity

are are and and become in the opening forward. investing efficient. intact key facilities our propel our e-commerce, trying will new of much of business and business small Companies All more large to drivers very

short in and expensive supply. remains Labor

needs. Our PPS solutions help companies automation these and address

sustainability world driving plastics biodegradable the brand global sustainability front, the are recyclable Ranpak can some public of to of use is will phenomenon Most, and that largest America. fall a single is regarding Many the the the use and towards and move gap. and This if owners all, move a of in reduce steam On materials. companies one not have that lot North these goals. bridge their picking up in help commitments short commitments of them made

point this we'd to for line Thank like Operator? you all, again. open questions. the up At

Operator

from with [Operator Baird. come first Instructions] line question Our Ghansham will the Panjabi ahead. Please of go

Ghansham Panjabi

the the and EBITDA currency to call Thank else Would anything you. price XXXX be guys. using versus for $XX million out? able morning adjusted million $XX us you you your to of bridge XXXX midpoint want between definition mix, constant Good volume,

William Drew

want me that you take to Omar, or…? Sure. one

Omar Asali

Bill. ahead, go Yes,

William Drew

Sure. Thanks Ghansham.

at So mid-single XXXX, looking talking think, of digits. we for price the I standpoint, end, at be the kind to minimal right from volume, volumes a growth high end price, volume would at assume you're what we're mix low automation

half to of get of a line. the single low bit automation contribute You'll we the first on the year. carryover, And growth price low that single digits then some just some in the took digit little of of we're from from part the pricing last kind top of expecting of

Ghansham Panjabi

placements levels. got have context the impacted the our years And basically average Okay, XXXX even XXXX XX% both placements trending to pretty XXXX environment then of lot current? and of but machine a over XX you. the higher a I at at average you few others things the we've model, do XXXX, with you that months, of past much from get as of over machine next than and operating and around in see -- look have baseline we couple levels EBITDA between how being you XXXX, sort know of

Omar Asali

Yes Ghansham.

during of Then frankly, noise. think usage last you've underutilization. there's lot was the as years, I COVID. There in excess excess I identified, couple of just think a

we machines, them So number customers. placing fleet frankly existing a kept of invested We customers, invested machines. in new in at at

where, careful don't making on number the reduce we're sure focused that of drastically. to optimizing customers you right very amount machines of at go want equipment to that but are existing now, we want We be

temporary are weakness the make some sure these you, providing the you're facing the issues you or you customers. due think If want softness, temporary to service of that are right to customers level to

some to trying a sense get what better for machines. utilization we're is these normalized of of So

of destocking, malaise environment, current we've in in economy, be much e-commerce, the existing weakness played our months upcoming out. need customers, a closely at that but to the the make pretty that watching And utilized we will through. that will at pass cetera, the general issues level war then these Europe, belief the sure given to resolved given be what has and with our be the some in in et is given to thesis machines endured Our higher we

our think conviction in around is these we levels will started help that right at our very that biggest some We the utilization and of a finite of And config destocking was and inventory. now believe which low customers year event machines. help painful should XXXX, that alone of was

So we're answer is the closely. watching it

customers, are given to going We're we want at quickly years, pretty placing our We noise be don't to last in new machines to existing overreact when hurt real we're business the the customers. going standpoint. from and a recovery optimize couple all prudent new but of

Ghansham Panjabi

Very comprehensive. Thank you.

Operator

Your come Samuelson go Goldman ahead. Please of Sachs. next question from with will Adam the line

Adam Samuelson

everyone. you. Yes, morning Good thank

Omar Asali

Adam. morning, Good

Adam Samuelson

to of questioning kind as of XXXX in following that maybe little machines, existing the kind mid-single lower to think destocking, of the in installed throughput of of that was volume and the base maybe about kind reported and declines between with on in that fourth to I context destocking digit And XXXX in of impact low volume kind growth? have line a trying paper think of consumables both whole? guidance growth of tried quarter and the in the that bit, Omay, size you, a can disaggregate kind of you

Omar Asali

you that? take want Sure. to Bill,

William Drew

Sure.

and Europe year, had substantial we obviously far a it destocking in the into anticipated for So impact, bigger going last the year. than pretty right,

year. the volume the, that the we to I XX% of think would to probably, European pressure volume call destocking it we probably decline put in last XX% had related was

this think turning will I So a headwind, into of nice be moving right, away a tailwind. lack from that a year, going into

with in cautious in think improves what a just overall I happens the the little seeing where right, being the lower environment, as Europe. terms environment economy of on energy is we're hopefully

Adam Samuelson

here not to us the of about made And and pulling to from of on and what hasty guess change base of is to just I of base confidence kind earlier, delineate customers, significant point you as a Okay. think machines do improve? you more trying installed kind would that utilization it installed we of the of take kind the the kind have installed going anything that, existing help from kind that base, about in too think

Omar Asali

I the data on mean, I few think watching be closely key. next Adam, the will quarters

our to will So we're be representing that that. destocking are because we and incorrect means what would inventory we basic We're confident pressure change, assumption are change as is calculus. to lean considering and then that that rate not not related pressure us, if we're certainly any that you as of consumption related consumption about And we behind of watching are that, lean. any to seeing levels as may be our seeing

comments just this of about the is that our The second equipment. a is February, January stabilization utilization made already bit of and and why we thing little we're watching, and happening, frankly it's of

a tough Europe had in you year very So year. last

activity You had come down. industrial

activity had drastically. very come certain You down geographies e-commerce geography in

frankly, Europe, dramatic in declines. like saw there region In this seeing the reverse And Eastern we Nordic some our that year already. Germany, is which in declines. were market, a place biggest We're dramatic

will patient that bit with thesis of converters continuation these prove right a being a our So little maybe approach. is that the

If we reassessing some or at the would in see of next that a two, change exist think converters of we in that customers. these quantum the I then quarter be

our guys. of any lot We lot with on I've And volume we've of these seen some field. on just new prior pressure calls. in are existing applying discipline converters And mentioned the that a putting we're a

a some hours facilities You've e-commerce closed cases or had open during some week few either a a the day. days lot in of

we want couple course, quarters of And normalize. we're seeing, some to converters enough. data that next of but confidence see is of end just So at on you've should frankly, more because that the to the it seeing we're volume not normalizes, last continue XX give the for moves had some what for just the that's dramatic year-to-date, day, and if naturally we're us right it and lift the that days the for

and wait see. will we So

assess it. very, closely. will very We watching We're it

the took terms believe I equipment have taking we the of be half no benefit. different with data stay customer something to for our all that's we levels”, of strategy making the we're the accrue price were than protect of right But despite us accordingly. last make the that's different, sure a us “normalized the strategy order wise If that as I base react and passing to that taking sure we they in they in will year second and strategy to care pressure think our frankly will to of in going increases shows the that's strategy customers, that hopefully facing the a world not reverses,

So I is answer next just think your watching to the couple short quarters. the of question

Adam Samuelson

very That's couple a assumed just modeling quick the SG&A XXXX? guidance in EBITDA Okay. And for the ones what's constant the currency I CapEx if could and in, what's expectation sneak for helpful.

William Drew

about looking we're this CapEx for So million $XX Adam. year, at

to real it just is that So the such as some the that going some other one I like of $XX operations. estate us within can as think then converters. that be projects, well robots, infrastructure related million to the time of help And things related is about other palletizing improve $XX to million that investments, as call efficiency

Adam Samuelson

then SG&A? Okay, the and

William Drew

XX%, so I G&A, LTIP would it exclude, the on cloud call the that right? sales, SG&A XX% it assume, and to operating amortization would it be, call of then And call expense. So

Adam Samuelson

helpful. it very I'll that's pass right, on. Thanks All Okay.

Operator

Palm from question go the with Capital Craig-Hallum Your next line Group. Greg Instructions] [Operator ahead. of will Please come

Greg Palm

Yes, questions. good taking for the morning. Thanks

relative some little a would January you're diving you can levels be in two to sense deeper either, seeing February, on and on months bit what were those what volumes give helpful? us XXXX maybe Just

William Drew

take that. I Sure, can

with it we're XXXX half second So, in call levels. perspective, right that Omar the we kraft a to right, of throughout line up price from line taken price XXXX Obviously in increase. since so XXXX XXXX, the a amount some did mentioned cost keep we've take of paper top with good

in that and still a and really years But by just through but So XXXX, geography, demand different lot that's down, region, about to you if volumes volume North when which obviously couple months America at region, were call a the, look APAC XXXX. from you the it of XX overall, see and they're a right, versus but started of prior Europe year in standpoint points, massive it had it where versus the last decline would above up in the obviously first in XXXX the be it's kind XXXX.

Greg Palm

Got it.

Okay that? what and all assuming about I sense some thinking underlying mean, February curious, the the are for of what and little much us I'm gets just get suggest year? give you're takes, January better that for thinking as maybe in should meaning improve QX bit push throughout and guidance you guidance a puts maybe continues, it kind seasonality just the just assumptions January from you what year the and just February are. to you're a exactly and maybe seeing is in in assumes. the trying in sense it and of doesn't Are seeing you that benefit just can the since what outs I'm a really

Omar Asali

have But in from I'll then some I with say just particular. start Greg, December would January comments, I maybe benefit general in bit input. February Hey his a very weak the give little obviously and Bill can

just the that outlined are the we rates, So be necessarily would with is not the to of sudden top different growth the that out say I year. standpoint, assuming the of standpoint, rest as all is changing we're for there. line robust anything assuming the from not going and macro story demand a world Bill

That year. of and for we gives relief. us will We destocking, confidence, are that saying very some a high and give we're the that's have us, behind lot that this numbers outlining in confidence in us

And going in assuming in energy quarters. gives energy XXX% and what's for seeing we we're is not that the Europe we're confidence, a reflected, kraft to stable, is it part of the our now, just paper happening of thing is the have pricing big a but be not few market so us visibility that second months paper, but lot what and we're upcoming things, these negotiating and that in

a the points hoping on I've side thousand COGS we We us. in and gave our in the of quite basis along progresses, gross for probably side. seeing quite And of said we're that are input something be achievable. past seeing more as half to on year up based the help continue in of recover what we a margin, to XXXX. that XXXX that bit a from to in the cost we And that bit have recover will confidence we're expect

guidance things see confidence two then in the cost. kraft give So the paper you and that that that, destocking us are

will can that add assumptions making Bill, to not our If are to be making we or fantastic if want rip know what not levels that stuff. guidance. We confidence reset I our a But that stuff assumptions into economy the improves, is roaring we've e-commerce going that don't very We're is to consideration the economy added to any this high we year. about comments. of certainly have that achieve. few think you I took and in plan

William Drew

Sure.

meaningfully think year I just subdued second the think right, to a about the -- just environment last year half also the to little and of are on half, be color the the we XXXX, more first really of given in expecting unfolded, relative And on in I in. the seasonality, the unusual. we're the right? just the as volumes And given probably think half you lower that cadence, how we're that's first than second half XXXX

up and as lot the kind you there's then America a have by a where driven usually that towards of opposite of was the year, the and effect end of So North Europe step well.

perspective top probably about the a margin, I XXXX, right. half well line would as lower say So from you if think, think the I first as

pricing about that was we more throughout QX year last to of kind right, pricing paper We So with the improve benefits you the of continued increase lowest the margin it QX. year the get just expect paper the steadily pricing peaking the of throughout year, right, it in year, to last right? from we if think had, and as paper

So we be benefit. QX QX. we we certainly year, a we the as again of lap expect But margin that's saw the get more to that, particularly what half in of in do than margin better second when

Greg Palm

you end kraft, kraft was paper but it And mentioned That's you by of of pricing have what versus region specifically year? Omar helpful. Okay. seen where specifically in terms

Omar Asali

done pricing much there can at concerned, has the sort was Europe, in you pretty Europe Europe and in what of sort winter of pressure and So tremendous the nat-gas market given entering energy has better see hedge quarters. mills enabled has looking us really of enabled to That that now a for of to better. and couple negotiate but upcoming the lower number obviously prices,

if that track recover driver a is bps, the and of I So of talked about, out on believe I big that we're you bps is recovering Europe to which that. XXXX hopefully XXX will numbers

about and about It's new online, for economy capacity the of mills of paper little A as less coming a more supply/demand. obviously it's America volume online, general In the weaker. volumes energy. number for a lot are that and is bit coming corrugated

quarters. on for, starting negotiate of We upcoming and our Feb pricing, but new cases, with Jan In some again to are the these X. able cases Greg, not in X these pricing many X, better on vendors are March starting

the help they helped little Bill quarter, as progresses. So were the first as us a year but then bit mentioned, they'll more

us. say situations its helping that's is picture helping a these America, supply/demand it's part in would feel And negotiated gross of largely energy the about recovering supply, already we pricing. I In margin. meaningful us. we've this why are So good where pretty already that's negotiated Europe,

Greg Palm

regarding exactly appreciate a maybe so Can to material surprise what last great. the one Bill, disclosure upfront you repeat everybody, missed I doesn't just I as little happened? for a weakness, And Okay, of then but bit come commentary. the that the

William Drew

section at of our issues we'll that a comes used changes out. right? the on knock-on it would effects the the the But end a all when XXXX biggest that in lot which had processes, a that made other reports And the have had IT to level, XX-K XA, things think where we systems, sure. controls, them it description related general access audit I high Yes, right, full I in So the unfortunately. and process. audit XXXX in year say to encountered those ITGCs, ineffective, controls some are

it's in enhancing make positions this accounting be step as as seriously policies that clean promptly the help some we're additional environment. we help and a take access back other to some with two procedures as support we'll years well something in some We'll So, will sure we going that right, of the invest of have tools It's provisioning audit, and and that and but the functions incredibly obviously after taking to having improve address key situation as monitoring. to some recruiting possible. in IT, disappointing

to address to work going hard this. we're So

Greg Palm

All right, Thanks. I'll leave Okay. it there.

Operator

over conference remarks. the at for Bill no have this any back We further to questions I'll time. hand closing

William Drew

forward today. joining look Thank us you, Regina, everybody up and to for next catching quarter. We thanks

Operator

you Ladies all conclude joining. and Thank gentlemen, will today's meeting. that for

You may disconnect. now

Ranpak (PACK) 15 Mar 232022 Q4 Earnings call transcript