PACK - Earnings call transcript Q4 2023

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Operator

Ladies and gentlemen, thank you for standing by. My name is Desiree and I will be your conference operator today. At this time, I would like to welcome everyone to the Ranpak Fourth Quarter 2023 Earnings Call. [Operator Instructions]I would now like to turn the conference over to Sara Horvath, General Counsel. Please go ahead.

Sara Horvath

afternoon, good and you everyone. Thank

and XXXX. I'd Before those factors statements we Securities as Form remind at forward-looking statements results our that differ discussed of your that our SEC.Some not a to the responses risk other result factors, our to statements. discuss to statements we Litigation from forward-looking call forward-looking including to forward-looking Act our Private in to any begin, in the the include will future filed these the does from that intend statements you under update Ranpak conference press this identified may and actual various like in as statements. filings materially those results could and cause uncertainties Actual questions no of of XX-K assumes and Reform materially defined subject release such differ events may and are obligation

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

XX, our XX-K the or conference our is to via accompanying through the will release.Lastly, webcast information. website.With available table and reconciliations be website.For earnings provide that GAAP Drew, section period growth XXXX. Omar open Relations with ] filing today, on our quarter on detail of an XXXX. summarize CFO. be on call will Investor we XX-K have CEO; Omar. call results, that, Bill information Bill a Omar additional our SEC presented issue to of for on SEC the to provide and [ We slide for Please Asali, our available this up will Chairman fourth the the presentation non-GAAP update our on questions.With our replay I for and comparable the before make The over turn strategies, also the today's refer company have and ending will results December we'll me the financial call outlook basis, the a included financial the I'll we

Omar Asali

Thank APAC start the in constant in region cases, and up QX finished to year-over-year. and the adjusted a regions trapping by QX distributors customers improving environment.Adjusted region void-fill a up a XX%, sales. by Thank by in the everyone. basis, the the $XX.X business currency volume were and positive of in Full-year Automation as XX% the saw us, by year, operating million, best general our you, remain subdued, slower ] more quarter as you in from ordering environment up continued a Europe. sentiment $XX.X The growth for up X% delivered uptick e-Commerce ago, continued Overall, We good We generally as to and sales EBITDA a increased significant volume was are we in volume Sara. improvement day, XXXX built improved the of users our stable. by patterns the in many improvement we the Automation different in working normalize to driven better growth drive in volumes U.S. and compared currency year. constant EBITDA fourth a patterns prior seasonal finished recovery Destocking also was as are of of in behind a but to million hand currency full-year [ were year.Europe XXXX XX%, The net encouraged input improvement categories The larger the of up currency strong performance, improvement starting e-Commerce note, improvement was quarter.Consolidated results season margin all a sluggish in in improved is larger improved higher driven as historical and on North more welcome XX%. basis year-over-year, joining seen fixed in constant among by and general all quarter offset line on XX% volumes G&A. helped call. from on X% on absorption momentum North and customers to and broad-based, on costs, experienced PPS and up net on activity finish a contribution revenue little our America And to to end market note and an driven in with holiday possible.Our the American manufacturing many activity goods year. end across of cushioning are North our Europe discretionary see inventory from and our saw contribution sectors from due X% we with order somewhat was pronounced increase or in keep on driven sales in conditions third uptick compared constant and in terms America, general the resulted revenue a year X a basis, and as and

XXXX the we we year, out quarter it and a better a expected to are million. is but XXXX. 'XX experienced note.Generally challenging increased than in announcing centers performance forward in and in eliminating years that year years. now in Strategic their soft, commitment North the EBITDA fulfillment next was we demand few us pull that in to over into impacted than Discretionary their a Overall, in activity a For remain robust, X players absorbing environment adjusted helps turned finish on key goods $XX.X a better account with 'XX. plastic speaking, bit entered the to operating XX.X% positive America

with inroads solidifies substantial think business made automation Automation key have player. our I that position accounts also our a true as with We

conservative through regulation place regulatory with in in Our Connecticut. monitor 'XX. improved XX tight X in XXXX are investments from generate EUR Europe. perspective a their users also the summarize, more top-line has U.S.We'll to have at including profile in overall peak on continues the This position are info our down with continue you but quarter. Washington, have extended ago, sacrificed that is for improved here's EUR Bill's environment to traction back start cash California, has laws distributors having Bill the of we are been Maine, the America Oregon, just made from input and to Colorado, as The as pricing enacted we remains far the double-digit and growth, These many and XXXX, been us of paper tailwind the Maryland, accelerating proposed but in and gross stable we Jersey, focused in region had positioning.We paper or years, clawed likely as XXXX. energy to guidance remarks, stable positions XX for deliver.Now, the in and states, the growth are from after our cost majority producer is It year megawatt, we in per adjusted year, environment working a enter take Gas Dutch at secular margin XXX on EBITDA New and this environment responsibility and into to Europe end a in Nat inventory gaining EUR sentiment.North pricing at led

William Drew

provides of Cushioning a and see Omar. In increase, continued XX-K, which performance X.X%, deck, to installed summary key be grew operating the its grew you, some globally. also Ranpak's year-over-year, void-fill you'll declined Thank indicators. X.X% systems results.Machine up information further year-over-year. X.X% systems machines on XXX,XXX We'll of filing X.X%, wrapping our over placement our

half increased to revenue the all on our currency company increased sales, regions to We quarter pricing and continue efforts give revenue APAC efforts for older year-over-year region X%, a also a reporting and achieving less net X% from relief finish The on the growth field Automation. bringing basis.For by net which targeted XX% a the our and XX% optimization year currency million move the second increased better productive the in to Automation, combined identify the increased input the by save cost quarter margin Europe results on in to $XX.X drove a year somewhat to raw full-year volumes volume driven the the refurbish currency basis utilization up constant was in in growth growth further revenue basis, to constant offset for to on constant up opportunities on Net fourth positive to finished region, refabricate to X%. driven due increased in locations, currency revenue by our contribution converters for from back basis. on full constant CapEx.Overall, X% profile.North in higher up contributions fleet redeployment and driven for material results of after America and Automation quarter better division, by brought note, a volume and the converters

have market has our the desire at We going in leveraging margins $XX.X through.As forward on price. XXXX, with America and an in a North as was were paper million driving progresses.Reported their some year, profit to when to gross volume America X quarter enter at costs lower, are basis although strategic prior the participants about margins a top activity currency region the G&A resulting reporting $XX.X third in excluding than million, peaked see have XX.X%, priority. constant we are are acceleration XXX year stabilized, volumes SG&A XX%, XX% do flat stayed and improved currency while upside points additional although and expect pricing Europe account APAC in vocal basis. more encouraged unit publicly the previous spend basis with some of seen of in line volumes year-over-year.Gross by the we quarters we or was quarter for gross North Controlling what approximately flow in investments the input increase constant XX.X% raise RSU we our to on a a versus and forward expense as looking

environment personnel that and roughly absorb well as volume our on in profile. XXX the as the Automation volume improves, the front, in a seen fourth dedicated resulting profitability past.Headcount the expect you quarter, currently, as over have obviously in We on was have will substantial better overhead, year-over-year, flat we people our we quarters to drag higher as

of an quarter, get definition a end. margin. business volumes EBITDA we XX% a and have short-term peak $XX improved EBITDA was in cash to ] LTM mid balance turns year's improved This leverage to brings strong improved result a EBITDA year.Moving margins constant to adjusted [ million getting sheet the X.Xx drawings the the on to margin XXXX the in and on a liquidity $XX.X sales adjusted [ below basis, June year to a our X.Xx A by on net overall.As of and ] improved basis to basis, the including XX% with quarter, recent agreement. that position, XX.X% basis back a As quarter our and our leverage implying Credit area in to $XX.X financial completed scales, high a XX.X% we to currency EBITDA up Facility, fourth profit to in profile the reported million adjusted for XX% full Revolving the with balance credit or expect much for X EBITDA for gross according was liquidity, consolidated to on X.Xx a of the our a million currency target no bringing the results a on constant adjusted adjusted

cash from I'll cycle to Omar. in final infrastructure of but pleased a year our EBITDA to ultimate We a where Major grow remaining in CapEx that, progress, the expect to [ complete, $X.X continue or to turn to de-lever. turns digital of is is Malaysia investing to our ratio goal it are and generate leverage and make funded ] to physical return less.XXXX XXXX.With million largely we to be X adjusted remains

Omar Asali

growth cut quarter to won Thanks, and believe the to to us America expansion required I'm inflation our year of million more of normalize key year and customer top-line our believe reflecting of to strong change XX%, signature gross to the for a X% to be clawed Automation wins growth after the critical back Ranpak with operating currency meaningful report took it this year and annually scale of expectations remains in buying be a in of we're capabilities pivot in investing guidance and towards will revenue. have the year, our production activity steps to in and up commercial which also accounts cost that a autofill margin top-line as that products point we momentum to environment to was XX%, strategic as happy be is Bill. solutions. beginning to have This in a volume during has the We adjusted in the Automation made than year. XXXX anticipating $XX step of reflects e-commerce will somewhat normal area we the signal is I what constant excited top-line Ranpak. we top a the to North PPS, on return well we of here.Regarding able in 'XX.We majority the mandates believe been the 'XX, next have In and achieve our position Automation our been the implying that in as and basis, started in robustness of as XX%. half X% industrial a second a and inroads are point Automation in show the but the million range input of for working $XX continuing over second a $XXX be million, This expect market profile our significant we growth serve at up PPS, building key of serve a year, million.Our revenues and the quality EBITDA patterns to inflection slow to the hit $XXX where relationships also player.We million and building years baseline growth tier to the over of completed more on we Automation $XXX towards have these for for growth few revenue pressured.We solidify successfully of

cycle for and X% from exit Generally top-line expect believe ramp depending and which key backdrop.Our our and we cash generation the EBITDA our of profile.We I bottom-up fundamental Our Ranpak has view a level to investment XX% steady better near-term some hence Automation contributions paper at speed increase conservatism upside to our to year general growth is somewhat timing in for reflects guidance inflection step million, an will the margin guidance X speaking, expenditures as optimism, capital giving plastic particular. $XX past in the is shift.'XX in we adjusted have believe and us be focus and the major we reflects point and expected I in that their the about of feel with company deleveraging. us this years. than enabling on accounts of on area up continues in now any more challenging strategic down

announced They kick change We multi-year players with to about in largest this replace some eliminate momentum to step plastic Automation have have begun year. and packaging solid have with PPS it e-commerce business delivery the publicly the paper. of seen transition potential opportunities a and in.We in

costs, that margins. where reduced of and form rising ROI, deliver is labor to specifically our reduced switch. what the mega-theme waste. in solution is and on inputs are customers and spend portfolio end-of-line believe able willing other of costs need, environment Companies part an we in Industrial costs, labor that to are projects a lower We pressure attractive deliver automation an logistics

added people, has to North and capacity in nearly craft in recent look and facilities 'XX, balanced. cost in our sales and We remains in pricing have pretty double stabilized the months. to environment paper input solutions, 'XX.The this business Automation scale America

live in really Europe, Pacific.Expanding network and region, our have out. and account this our facility adds from drive without to footprint, time XXXX of our margin absorb fuel in 'XX, in enable our our a efficiencies summer. Malaysian We Asia excessive favorable well emerge half is margins. impacting served take significant cost on will especially which us APAC second the this time believe and year we help getting coupled lead product overhead with end is users. in ability presence milestone freight strategic Pacific This markets our prices year. in as in Asia We attractive believe go able that out cost us strategy production our Europe, energy activity spike winter our for and and maintain to local to will us the more were facility currently positions to without as large profile to a and of at the growth manufacturing Europe go-to-market should volume us reserves. in we key to draw our sell In in kicks result with to better Additional and meaningful will been much negatively this

like and Pacific size more With we this the you our meaningful economies of of importance sustainability all should like line growing PPS Australia in we'd a point, Japan, to up for Asia the again. there At globally.Thank the business and places believe Operator? open contributor questions. to become

Operator

first [Operator Panjabi Ghansham question the line Instructions] Your with of comes Baird. from

Ghansham Panjabi

kind and of And EBITDA quarter, half? to XXXX as the were of on than perhaps just which initial as the back, think specific a should and your better sense half think then fourth guidance it basis, about give maybe you an you first end the how for of to second seasonality relates phasing us Omar, forecast. can sort between we markets

Omar Asali

healthier geographies what Asia we Pacific reality, anticipated we stronger quarter, Europe, thanks, cautious uptick. year the the saw, then holiday a bit little see frankly, we prior was the the season. was didn't say given seasonality in in in holiday different across U.S., Maybe Ghansham. in Yes, in And little into too fourth e-Commerce, a I and that quarter. in would than a had bit going were Sure. season, the particular in we

of what these some pick going we I our And of think the terms So quarter, discussing a expect well going and really and seasonality, as installing again, of and report been these way. in a that some on and number we some prior up given is that I closes. this accounts into XXXX. some start in I'm seeing and to mentioned in of based to I'm pipeline this that past wins have of I've in we trials And this standpoint, quarter. saw given calls strategic strong that a where the equipment of the in in calls large successful of year a and think paper, meaningful winds would switch holiday converting quarter XXXX We're been in that pipeline. a we from in seasonality helped.In winds year expecting them you're from of to have second are second I've now, as these these season and later and the accounts kick number pretty the the a year. trials in our to of Well, both plastic peak on as half of happy

Ghansham Panjabi

Okay.

imply that acceleration would the too side then progress? definition placement machine an in by So we as

Omar Asali

ever. I have moving play and our optimization through think refurbishing, our honest, some. than been we within be more equipment To and refab we systems -- through system it'll and

new it So equipment. lot not of reflected CapEx a and new may be in

we've the pretty a I and the of initiative optimized more you large converters years number couple see in in may a the bit done last highlighted call. these a Bill big being think as That's little investments converters. of dispensers given

optimize incremental movement dispensers. network short existing to our new answer and also you're see between but converters the and you'll some equipment, going to see So some is CapEx

Ghansham Panjabi

the in impact the flow maybe XXXX Bill first Bill, the the in of some fantastic on also half interest to And free of and terms expiration Okay, parts, the that's swap follow-up of expense and on June for hear. on cash second half. moving a versus

William Drew

Ghansham. Yes,

So you're cash flow about asking for free expectations 'XX?

Ghansham Panjabi

yes. Yes,

William Drew

Yes.

sizable we the the Ghansham, or it some about nice so the if pretty we're million around think you way that cash $XX look I getting So call We've mid-range think income that on. we guide, for got balance us. at

expense, we as million, of And we're that highlighted. a strategic that XXXX. year include investments be you $XX the millions. looking right. Cash working invest to from around single as in think slight assume would collect, a taxes, to million interest income I obviously activity mid digits well at standpoint, the if in cash So be kind $XX we Omar Well, the interest capital of in that some this working in we'll account then making cap use, for some

the So free double kind of of cash digit flow all in that gets generation. in millions you

Operator

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

Adam Samuelson

maybe first more in question, the I converters than past. the is back So point to going repositioning you on had guess,

see I the actually where can think this model really the especially any the void-fill, I was the base, and first in base and had time in installed decreased point installed sequentially.

bit pieces about little it more magnitude is as CapEx, you a the aggregate cushioning all And $XX within total How talk in well? void-fill? expectation actions? for of in installed Are repositioning? with, you base can growth just million what you're it said, much wrapping in the those of you So try tie doing largely to think Is those that, and Bill? I together. XXXX So

William Drew

the think of flow, recent Sure. ability with converters want free I to We would and those. a over environment. major a maximizing this that number the of to we mean, initiative converter in that years, us, especially us And I number the refabrication for reposition for there's we're right. sure right cash is refurbishment deployed make I say

particularly right. the in of good numbers the team's think, account macro other related And place with So make past things that the the way actively that. at really I of doing the think that the placement matching job sales that probably in we're to accounts, put sure what just have performance cushioning with analytics deals the those activity, you're those underwritten, some side, the to Then in isn't expected, working years also we've the conversations and been elsewhere. that using and redeploy was converters were originally we I couple the is a Europe if team look in seeing that on

and of have couple machines That have You're areas under been we're just pressure, accounts, getting last the industrial years. of some just those right. going been So that by from harder some of right? more back seeing those hit

think, that it's maximizing And we're flow. initiative and the board, maximize across analytics that capital really all that's free use we've make across we'll sure the on deployed. I to return to continue cash So our right the an the categories that do to

As modeling 'XX looking far of for mid-single we're as think, goes, estimating base, for the helpful. if kind of a estimate, digit install in if that's I you're growth kind us, that

Adam Samuelson

No, that is. might And on where you especially maybe craft just to inch follow-up America. kind have as -- in we margin paper the of think outlook, might North gross seen about see pricing confidence and the you higher an

has I the there and been inflationary backed environment off. weaker, energy it's think certainly with Europe,

Just purchases getting help price price consistently through distribution, you're purchases. on pre-COVID, of pre-Europe I imagine inflation, visibility to and your operated annual your paper anymore. that purchases paper I craft where paper the up fixed And your us business on had your from think can't about of ability suppliers think kind kind

Omar Asali

we right, we it's in the say that's average X I Adam. in is this duration. different largest obviously applying in geographies, agreements that much pretty and are on Europe are think coming up being seeing I U.S., Yes, our are with around frankly, would What to months and environment,

some we rather used annual that sort think And index related be resets So twice have that agreements the of couple ago. of price pricing. year to than years that to reset a a the might

close super about if is, with all we to XXXX. for around of out lot not consolidation we in consolidation work needle will with and facing frequent the and obviously suppliers. price. not us winning that good year. in a And move account with volatile to that it's some general, a and on They our there tone hopefully we're volume, of the corrugated It's pretty the even if the think of large push more in full though activity continue getting players. frankly, the that willing strategic the resets, they're paper space visibility feel will.Now, lot do with with some is look, now discussion you these we market touch We're can in So of

negotiating have et fulfill been year. of the the We cetera, to pricing, rest

U.S., term in feel seeing in a is I on think depending the and that pricing that of have the I given set some So last of negotiations year. second will in the my throughout half will guess pricing near is, year, the and we're But both we stability index there'll in recess where hopefully Europe in we'll the geographies the be see last were. how out.And to the in where your from will from we're energy, hopefully on half of that energy compared coming second volatility then to supply subdued there's a plays mean, the other I terms be Europe Europe that a in more year to that of point for seems And lot everything while. to hearing, stability more we sources

Adam Samuelson

growth, $XX much equipment have you do on mean, in And about of helpful. Or that is in over be million. the how today? That more side, plus would if talking I which that could convert one XX% squeeze orders in growth those just the versus -- of backlog to level Automation that have into in to orders? conversion just how of backlog frame generation, you you the lead would you and terms fixed XX% timing confidence orders have the of I but kind

Omar Asali

would the of I I very, sort record in we bookings, which need our early had our average I that ensuing are would That's obviously is to confidence number confidence quarter, the and say in numbers X we're number. month mean, that later if of high increase sharing our a I the we our works, the it's now increasing sort I and year peak to of last way year, relatively there to elevated business hit these in is bookings bit decent. is X levels about those will. why But But get think hitting mean, I month in Later we couple year season you for months, it. comfortable about once in next bookings, of the X sometime quarters those so is we say pretty have X we're mentioned next different. still continue year. bookings. to help visibility that period the orders and to very the think this given fulfilling these The

Operator

Next of Craig-Hallum question comes with line Capital the from Group. Greg Palm

Danny Eggerichs

larger Danny seen Congrats date to good about pretty here guess, on the those and to bit. even visibility Good there provides what This you second the the or recovery overall I from have for then you're as back upside from potential in sounds some a is like regardless, and feel maybe on guess I those, quarter in for half. the macro volumes, accounts the any on quarter. macro as the and there? well volumes much strategic of in kind just uh to little you Greg pretty guide improve and Eggerichs see continuation from of good today. feel confident come ramping does comfortable QX you've to kind

Omar Asali

Yes, like. I start. the in. maybe fundamental me Omar. we have see say It's then Bill I'll in would And our the really picture and business, that let chime we micro

of maybe probably of conservatism, that little around feel banking business, well. a our things plastic environment And ] decided macro in, that's So environment, activity, volume improve. stability and these us the inside [ margin largest activity, sort trends, to what's would whether that's give what input seeing we're trial to say from wouldn't which confident in paper, seeing the more environment. of is whether all I but but paper, a seeing whether the with because switch the the that's we've we pipeline say on really our the not that we're are a bit backdrop. all of we're because trending to cost, from I and same what guide macro the stay in reflects we're gross happening macro our macro given

So headed unique any interest have that's where about whether where or a or rates, whether bit be I that's don't the geopolitics, we think inflation stuff it's us it's is little insight to views, cautious. causing

that you would I case, to high will business, the say today. if assuming we're the very seeing macro our year in confidence And are throughout something add. we that our where we So fundamentals know have environment given I have guide.Bill, similar that's don't that's if in we're a go to the

William Drew

little that's how bit the thinking a growth, helpful. as more give can I mean, I we're detail about Yes, maybe if top-line to

then assuming guide, the to as the single to digit. pricing at volume just half And of high from growth headwind what second X.X kind we've the we in is mid standpoint, kind of with points. being is bit the Automation, we're in high-end we're volume built year. of So last digit some single a of made of X.X low a little lap low assuming end a pricing to adjustments roughly the of the mid we

we're strategic So in a not meaningful a activity. with baking operating that account from mentioned, in perspective, Omar's volume improvement activity the

of seeing. I year, in. kicks continue for better think then kind feel activity account get as we're continues to us it'll we is operating which environment like what So slightly right, improve, the this throughout to the And

Danny Eggerichs

sense. on makes all for of kind trends, feel companies you're bigger you guess accelerate That potential touching seeing like I and out last? kind relative or year, this a Maybe that to overall from feels it. to your with guys' more got sustainability Yes, quickly of be seeing coming more just it driver kind regulations. new like maybe of is and state sustainability we're initiatives there seat,

Omar Asali

that been beyond obviously, it companies key I conversation and laws closes. trial think is responsibility playing our there, think, maybe an trials importantly, then these solutions hopefully highlighted really equipment extended I convert us our producer around driver into and call, start and ourselves important And it's prove the go these as probably once sustainability having taking to to have some and and up are attribute number of increasing of to action. that number our in I a of a activity. a most California role states, I passed regulations really in on the

what with a seeing around a think new particular U.S. were larger in you these behind is switch more of regulations, the I by regulations, discussions believe I and bit big the So around the new in driven accounts. driver focus sustainability. maybe a

of rules us. in the thing while, those years. activity in of in those Now, last number discussion for have over the that Europe this really benefit is a enacted seen seeing spike and number U.S., for and many we're EPR being The the over I a next start are the number new been in think we've will good the years, implemented I rules years tailwind going for of which hopefully of because of to think is which us give these next

Operator

Bill the at I over Drew, turn back questions time. you. further Mr. this call no to are There

William Drew

Thank for today. you, talking with about to QX call you the joining thank Desiree, forward and you all look I earnings call. next

Operator

This conference call. concludes today's

may now You disconnect.

Ranpak (PACK) 11 Mar 242023 Q4 Earnings call transcript