Ranpak Holdings Corp. Q1 FY2025 earnings call

Bullets:

• Volume momentum continued with 7th quarter of growth; North America was key driver with enterprise accounts and distribution channel growth.
• Europe and Asia Pacific had March weakness, but automation expected 50% growth.
• Took actions to address input costs, deferred spend, identified $8M in structural cost reductions.
• Strong liquidity position with $65.5M cash, refinanced credit facility, invested in over $10M paper inventory; hedging currency risk with swaps.

Consolidated net revenue increased 8.8% on a constant currency basis for the quarter. North America business saw sales up 33% and volumes up more than 40% over Q1 2024. Europe and Asia Pacific had slight volume growth in first 2 months but March was weaker, impacting top-line. Automation started slightly up on constant currency vs 2024, with some projects moving to Q2, expecting 50% growth. On constant currency, adjusted EBITDA declined 7.8% including Amazon warrants impact, excluding which it declined 3.6%. Gross profit declined due to lower volumes in Europe/APAC and higher input costs.

Bullets:

• North America growth expected to continue with deepening relationships with e-commerce/retail players.
• Automation growth still seen at ~50% as per previous expectations.
• Margin improvement expected from Q2 onwards with pricing actions and cost initiatives, expecting gross margin to step up from Q1 to Q2 and improve further in Q3/Q4.

Bullets:

• Macro factors affecting Europe and APAC, including consumer and business caution.
• Tariffs impacting capital expenditures for PPS converters and automation equipment.
• Input cost volatility and mill disruptions leading to lead time inefficiencies and higher inventory investment.

Q: Danny Eggerichs asked about geographies, March weakness in Europe, and automation pushouts.

A: Omar Asali said North America robust, Europe had southern vs northern differences, April stabilization; automation projects slipping from Q1 to Q2 but confident in 50% growth as projects continue.

Q: Kieran McCabe asked about cost reduction outcomes.

A: Omar Asali and William Drew discussed operational inefficiencies from mill issues, spot market purchases, and structural cost reductions like headcount, freight/logistics, and discretionary spend pause