Reynolds Consumer Products Inc. Q3 FY2024 earnings call

• Business performing well with investment in new products, innovation, and cost savings. - Tableware facing challenges from legislative changes and consumer shift to sustainable offerings but has potential with new product pipeline. - Reynolds Cooking & Baking business strong with share gains and innovation. - Hefty Waste & Storage business delivered record revenue, with waste bags achieving $200M in annual sales and new product rollouts. - Supported hurricane relief by donating products to American Red Cross.

Tableware business unit reported volume and earnings decline, primarily due to lower foam plate volume and increased promotional spending; rest of tableware volume up modestly. Reynolds Cooking & Baking business had a solid quarter with Reynolds Wrap gaining share in household foil and Reynolds Kitchens Parchment growing. Hefty Waste & Storage business delivered record quarterly revenue, with waste bags achieving $200 million in annual sales, and Presto food bags rolling out; waste bags categories benefited from sustainable solutions. Revenue contribution details: Total revenues $910 million in Q3, with $856 million retail and $54 million non-retail.

• Full year 2024 net revenue outlook increased to $3.620B - $3.660B. - Adjusted EBITDA range updated to $673M - $683M. - Q4 net revenue expected $945M - $985M, adjusted EBITDA $208M - $218M, earnings per share $0.56 - $0.60. - Extended and upsized revolving credit facility; monitoring refinancing of term loan facility. - Prioritize cash flow and strategic investments.

• Legislative changes affecting tableware sales in certain states. - Commodity price volatility, especially aluminum and resins, impacting costs. - Competitive environment in waste bags with statistical noise in market share data. - Tariff uncertainties affecting aluminum costs and competitive landscape.

Q: Thoughts on holiday season and consumer dynamics?

A: Lance mentioned modest improvement in category volumes, with Q4 guidance assuming category forecast improvement.

Q: Impact of down trade and tableware legislation?

A: Lance and Scott discussed private label share trends and tableware legislation in certain states and localities affecting foam plates.

Q: Consumer demand and commodity costs?

A: Lance noted sequential improvement in category volumes, Scott discussed managing aluminum and resin costs via hedging, Reyvolution savings, and pricing.

Q: Waste bag business and resin prices?

A: Lance said waste bag business is doing well with record revenue, Scott discussed resin price flow-through to P&L in 3-4 months and offset via Reyvolution savings.

Q: Category trends and 2025 expectations?

A: Lance mentioned sequential improvement in categories, and long-term low single digit volume growth expectation remains but specifics for 2025 not yet set.