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Thank you for standing by. My name is Edmond, and I will be your conference operator today. At this time, I would like to welcome everyone to the Ranpak Second Quarter Earnings Call. [Operator Instructions]. Sara Horvath, General Counsel, you may begin now.

Thank you, and good morning, everyone. Before we begin, I'd like to remind you that we will discuss forward-looking statements as defined under the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from these forward-looking statements as a result of various factors, including those discussed in our press release and the risk factors identified in our Form 10-K and our other filings filed with the SEC. Some of the statements and responses to your questions in this conference call may include forward-looking statements that are subject to future events and uncertainties that could cause our actual results to differ materially from these statements. Ranpak assumes no obligation and does not intend to update any such forward-looking statements. You should not place undue reliance on these forward-looking statements, all of which speak to the company only as of today. The earnings release we issued this morning and the presentation for today's call are posted on the Investor Relations section of our website. A copy of the release has been included in a Form 8-K that we submitted to the SEC before this call. We will also make a replay of this conference call available via webcast on the company website. For financial information that is presented on a non-GAAP basis, we have included reconciliations to the comparable GAAP information. Please refer to the table and slide presentation accompanying today's earnings release. Lastly, we'll be filing our 10-Q with the SEC for the period ending June 30, 2023. The 10-Q will be available through the SEC or on the Investor Relations section of our website. With me today, I have Omar Asali, our Chairman and CEO; and Bill Drew, our CFO. Omar will summarize our second quarter results and provide commentary on the operating landscape and Bill will provide additional detail on the financial results before we open up the call for questions. With that, I'll turn the call over to Omar.

Thank you, Sara, and good morning, everyone. I appreciate you all joining us today. Our overall second quarter financial results demonstrate continued improvement from the start of the year as we see meaningful improvement in our margin profile driven by the more favorable input cost environment and tight spending initiatives. Although volumes were not where we would like them to be at this point, we enter 2023 with the expectations that volume would be subdued in the first half of the year and our second quarter results reflect that. We spoke on our previous call about the softness to start of the quarter, May and June saw improved activity levels with overall demand relatively steady. Generally speaking, consumer spending continues to be impacted by the preference for travel and Essentials rather than the purchase of discretionary goods and many manufacturers are hesitant to invest given the uncertain outlook across the globe. When we came into the year, we expected the second half to demonstrate the beginning of more normal operating conditions. We are still watching for that to manifest itself in the activity levels. So we remain cautious on the volume outlook in the near term as consumer spend is allocated elsewhere and overall economic conditions are choppy across the globe. Given this backdrop, we're focusing on those things that are under our control to improve our performance. And right now, our top focus is on working the assets we have and converting our pipeline of large strategic accounts to closes. North America sales were down 6% in the quarter versus last year, driven by lower volumes in PPS. Similar to last quarter, I would characterize activity levels in the region as stable, but at a subdued level to start the year. Sentiment among manufacturing customers reflects a slow environment, and I think the recent PMI and ISM data reflect this. E-commerce activity continues to be hampered by the allocation of consumers' funds to restaurants, travel, groceries and apparel compared to more discretionary purchases of items such as electronics and goods for the home. Box shipments as well as freight and logistics data reflect companies tightly managing their inventory with sell-through remaining soft and a higher cost of capital flowing through the economy. I would say overall, a similar message on the general environment from what you heard from us in Q1 with the difference being the quarter ended on a better note compared to the start. I also mentioned in the first quarter call, we are making inroads with many key accounts that may have historically been plastic only. These trials and relationships continue to deepen and the momentum has only gotten better since the last update. I remain optimistic about the shift towards paper for many large organizations in North America. Sales in Europe, Asia Pacific were down 7.6% for the quarter on a constant currency basis as activity levels in the regions are weighed on by the overall economic environment in Europe where manufacturing remains in contraction territory and consumer confidence is extremely low due to persistent inflationary pressures. We are through the destocking in Europe that plagued us last year, and I think in some cases, customers are overcorrecting on the inventory side, but the overall environment in the region remains constrained even with energy pricing down more than 80% from the peak. Asia is mixed by places like Australia, New

Thank you, Omar. In the deck, you'll see a summary of some of our key performance indicators. We will also be filing our 10-Q, which provides further information on Ranpak's operating results. Machine placement increased 3.1% year-over-year to over 140,700 machines globally. Cushioning systems declined 0.6%, while Void-fill installed systems increased 4.1% and ramping increased 5.2% year-over-year. Growth in the machine field population has been lower this year due to a combination of lower activity levels generally and our efforts to optimize our fleet. To maximize capital efficiency, we are focused on getting underutilized converters back and redeploying them to more productive areas. Overall, net revenue for the company in the second quarter was down 7% year-over-year on a constant currency basis, driven by headwinds in both geographies against the largest quarter we experienced in 2022. North American net revenue decreased 6% versus the prior year driven by lower industrial activity and continued e-commerce malaise as it relates to discretionary goods. In Europe and APAC, net revenue on a constant currency basis was down 7.6% year-over-year with all categories under pressure in the quarter due to lower volumes versus the prior year, driven largely by a lower base level of activity given the volatility of energy and remaining inflationary pressures in the region. Outside of April, we've seen a steady base level of volumes in Europe for most of the year. And when these base levels of activity are present, the profitability in the region is returning to more historical levels, which is really encouraging. Automation sales increased year-over-year and represent approximately 7% of sales on a constant currency basis as we continue to get traction in the space with our box customization and automated solutions. Although our top line was down, the impact in the second quarter was more than offset by the improved input cost environment as gross profit increased 5% on a constant currency basis, implying a margin of 37% compared to 32.6% in the prior year. This is continued improvement from Q4 of 2022 and Q1 of this year, which both had very similar levels of consolidated net revenue. On roughly $85 million in sales in each of those quarters, our gross margins have improved from 28.1% in Q4 to 34% in Q1 and 37% in Q2 with the largest benefits coming in May and June, which were a better volume months in the quarter compared to a lackluster April, which we previously communicated. Obviously, as more volumes flow through, the better the pickup will be as we expect to absorb more overhead and get the greater benefit of lower pricing. Constant currency adjusted EBITDA increased 4% year-over-year to $19 million, implying a 22.5% margin driven by improved gross profit and tight control on spend and represent continued sequential improvement. This compares to $12.9 million and $15.1 million in constant currency adjusted EBITDA on similar sales in Q4 2022 and Q1 2023, respectively. As we get into the second half of the year, we expect our financial profile to continue to improve as we get into a steadier volume portion of the year due to the traditional seasonality of the business. At this point, we expect that the vast majority of the destocking impact is behind us from what we can see, leading to general velocity to be largely driven by end-user demand needs. Again, last year was very unusual for a variety of reasons, but in particular, the deviation from the usual revenue cadence of the year, which had shown the back half stepping up meaningfully from the first half and generating roughly 55% of the volumes for the year. We do expect to see some improvement in the back half of this year, but I do think it will be weighed on by the overall environment, which is slower to rebound. Fortunately, we expect to have the greatest impact of paper price reductions in the second half as our costs increased steadily throughout 2022 and peaked in the fourth quarter. We believe improved and steadier volumes in the second half, combined with maximum input cost savings should enable us to continue to improve our adjusted EBITDA throughout the year. In some regions, we continue to experience input cost savings. So as we reach our target margin levels in the region, we will need to share those savings with our customers. We as put some pressure on the top line. The margin profile is what we're most focused on in the near term as we believe the volumes will pick up in due course and get the top line trajectory back on track. Capital expenditures for the quarter were $13.4 million, with more than half driven by the funding of our real estate projects and other investments. We continue to place a strong emphasis on minimizing CapEx projects and converter spend to maximize cash flow generation for the remainder of the year. Moving briefly to the balance sheet and liquidity. We completed Q2 with a strong liquidity position, including a cash balance of $53.9 million to end the quarter and no drawings on our revolving credit facility. Our net leverage based on reported LTM adjusted EBITDA was 5.7x at the end of the quarter. We continue to expect leverage to peak in the second quarter as we expect to build EBITDA for the remainder of the year. From a cash perspective, we expect Q3 to be the trough and to build in Q4 as some of our capital commitments related to real estate did move into Q3 given the timing of invoices from the developers. I want to reiterate the message from the previous couple of quarters where we recognize the importance of maintaining a strong cash and liquidity position and a focus on returning to our target leverage ratio of 3 turns or less. At this point, the major components of our investment cycle are complete outside of the Malaysia facility, which is roughly $1.5 million, enabling us to focus on cash generation and deleveraging. We've tightly managed working capital and are vigilant on cost to maximize cash and get our profitability metrics back on track. With that, I'll turn it back to Omar before we move on to questions.

Thank you, Bill. In closing, we continue to make progress to improve the financial profile of the business and believe we have all the tools necessary to get back to where we want to be. Our long-term objective is a business that is steadily growing its top line in the high single to low double-digit area, gross margins in the high 30% to 40% area and EBITDA margins in the high 20s to low 30s percent area with substantial cash being generated along the way. We're committed to deleveraging to 3 turns or less and believe we can achieve this through EBITDA growth as our margins continue to improve, volumes return and we generate cash from our existing asset base. We've completed or will be in the near term, completing our large projects for Ranpak that have been underway for the past couple of years. These are in the areas of systems and IT, physical infrastructure and NPI and innovation, our North America and European headquarters as well as our Connecticut automation center are done. The heavy lift in our systems and IT spend is complete and the tremendous NPI development over the past few years further cements ourselves as the leader in paper-based protective packaging and end-of-line automation. All of these physical, digital and new product initiatives have taken a tremendous amount of focus on capital over the past few years, one while dealing with the pandemic, followed by an energy crisis in our biggest region. Now that we have our platform in place, we have rationalized our objectives and narrowed our scope of projects to provide a level of focus to the organization that has not been available in years. We have developed a strong, scalable core where we are focused on gaining efficiencies through better processes and access to data. I've mentioned earlier the favorable input cost environment and shared on a few occasions our goal to get gross margins for PPS back to the historical levels. In certain regions of the world, we have been able to achieve this. So we are at a point now where we need to share some of the savings with our customers. This has happened ahead of schedule, but it does present some pressure to the top line forecast we provided at the beginning of the year. At this point, given the slower economic outlook and pricing concessions due to our sharing of lower input costs, we anticipate being below the top line range we provided at the beginning of the year, while we continue to focus on achieving adjusted EBITDA within our original range. We are pleased with the gross margin improvement and are working on volume initiatives to ensure the EBITDA and improved overall margin profile follows. The account activity is extremely strong, particularly in North America, sustainability is becoming more entrenched and larger players, so I'm pleased with our outlook and how we are positioned for the next number of years. With that, let me open the call up for some questions. Operator.