Pactiv Evergreen Inc. (PTVE) on Q1 2021 Results - Earnings Call Transcript
Operator: Thank you for standing by. This is the conference operator. Welcome to the Pactiv Evergreen First Quarter 2021 Earnings Conference Call. The conference is being recorded. I would now like to turn the conference over to Dhaval Patel, Senior Vice President of IR and Strategy. Please go ahead. Dhaval Patel: Thank you, operator, and good morning, everyone. Thank you for your interest in Pactiv Evergreen and welcome to our first quarter 2021 earnings call. With me on the call today, we have Michael King, Chief Executive Officer; and Michael Ragen, Chief Operating Officer and Chief Financial Officer. Michael King: Thank you, Dhaval. Good morning, everyone, and welcome. Before jumping in and with this being my first earnings call as the CEO of Pactiv Evergreen, I thought it might be helpful to give a bit of insight on my background leading up to now. I'm a pedigreed chemical and mechanical engineer. My career started in the operations and development space of the automotive industry, and it's rapidly progressed into both private and public sectors with companies like Lear Corporation. TI Automotive, FRAM and Autolite as well as Huhtamaki packaging and most recently, Graham Packaging. My sweet spot is in driving business transformation through culture, manufacturing turnaround and end-to-end systems integration. My approach is hands-on and collaborative. I'm very results focused with a keen eye to long-term and short-term viability of the business. I have to say that it's been a pleasure to meet so many of our Pactiv Evergreen employees over the past 2 months as I've taken over as the CEO. In my short tenure, I visited our mill operations and several of our converting facilities. I'm confident that we have an amazing team of talented individuals across the organization that are well suited to manage the current challenging environment as well as the opportunities of the future. Michael Ragen: Thanks, Mike. Moving to Slide 13. Looking at our first quarter 2021 financial performance, net revenue was $1.164 billion versus $1.212 billion in the same period last year, a decline of 4%. The decline was primarily due to the impact of the COVID-19 pandemic. It is important to note that we saw a strong year-on-year improvement in March 2021 with revenue up 7%. Our March 2020 numbers were not yet affected by the COVID-19 pandemic, and so this is a strong lift of our prior year baseline. Adjusted EBITDA was $77 million versus $145 million in the same period last year, a decline of 47%. Our Foodservice and Food Merchandising segments were up 9% and 4%, respectively, despite the effects of COVID-19 and Winter Storm Uri. Michael King: Thank you, Mike. In closing, while the first quarter was challenging, we look forward to the continued opportunities ahead of us as business activity returns and drives continued recovery in our Foodservice and Food Merchandising businesses. I also look forward to turning around the performance in our Beverage Merchandising business and, in particular, our mill operations. With that, we will now open it up for questions. Operator? Operator: The first question is from Anthony Pettinari from Citi. Anthony Pettinari: Welcome, Mike. Given the unprecedented resin inflation that you're seeing, can you just maybe remind us or put a finer point on the time line to get caught up on that inflation in terms of the lags, whether they're 1 quarter, 2 quarters? And then just your assumptions for the direction of resin prices for the remainder of the year that's embedded in your outlook. Michael Ragen: Yes. So this is Mike Ragen. So I'll take that one. What we're going to see in Q2 is we will see somewhat of a disconnect between our revenue and our costs. The resin prices spiked early in the year. A lot of that is still in inventory for us. As you know, we hedge the lag in -- particularly in Foodservice and Food merchandising. And we will see -- but that's not 100% perfect in terms of the hedging. We will see a lag through Q2. But in Q3, our pricing will be back up on top of the resin, and we will restore our normal margins. We are expecting resin costs to subside through Q3 and then sort of flatten out through Q4. Anthony Pettinari: Okay. That's very helpful. And then, Mike, understand that you're still undertaking your review and it's early days, but is it possible to identify 1 or 2 things that you think the company could improve on either operationally or commercially that really stand out to you as an opportunity given your history and experience? Michael King: Yes, yes, good question. There's a host of reliability issues that we've been solving in parallel in both mills. Our converting operations, I would tell you, run fairly well. So the focus is truly the mills. I would also say commercially, we're evaluating pricing across the board. That certainly stuck its tongue out as an opportunity for us. And really, just as we continue the strategic review, doing a holistic look at product proliferation and give you a sense of the body of work around our uptimes and how that's tying to labor challenge in the country right now with our largest competitor being the U.S. government in terms of labor, we're managing that. And so insulating ourselves on labor, uptime efficiency and then commercially looking at price, all those are levers right now. Operator: The next question is from Ghansham Panjabi from Baird. Ghansham Panjabi: Congrats, Michael and Dhaval, on your new roles. Michael King: Thank you. Ghansham Panjabi: I guess following up on Anthony's question on just kind of looking at the construct of guidance. You lowered EBITDA for 2021 by about $70 million. I think you called out $50 million from the Winter Storm Uri and then $20 million from the mill issue. But costs are obviously much higher, just not resin but freight, labor, as you mentioned, et cetera. Are you assuming that you fully recover price/cost specific to these issues by the end of 2021? Or are there any positive offsets we should consider relative to your initial guidance? Michael Ragen: Yes. This is Mike Ragen again. So we are -- look, if I just take a step back. In our Foodservice segment, 80% of our revenue is on pass-through. And in Food Merchandising, it's a similar number. And in Beverage Merchandising, on the carton side of the business, it's around 80% as well. And the remainder of the business, a lot of it is market based. So we are expecting to recover the bulk of the input cost increases or get our prices up to cover that. And that's contractual, and that's the way we've modeled things out. Now are there upsides to that? Look, if resin drops, if input costs drop, sure, we might see some upside. But the way that we've modeled it is, as I said to Anthony, is that it drops a little and then sort of flattens out in the back end of the year. Ghansham Panjabi: Okay, great. Just to clarify, if resin stays flat between now and year-end, would you recover everything by the end of 2021? Or would that spill over into 2022? Michael Ragen: We'll recover by the end of 2021. Ghansham Panjabi: Got it. Perfect. And then I think you mentioned 3% volume increase in March year-over-year. Just kind of give us context as to what March 2020 look like. And then what are you seeing so far in April across the board by the 3 segments? Michael Ragen: Sure. So -- and I'm going to -- hopefully, this isn't too much of a -- too much information. But I like to look at 2019 rather than 2020, but -- particularly for April. But look, in total, our volumes were up in March, as we stated, Foodservice volumes in March. Everyone needs to be -- to understand that 25% of our business in Foodservice is institutional. So things like schools, stadiums, offices. They still haven't really opened or they've opened to a certain extent, but they're not fully open. And so when I look at this versus -- for Foodservice versus 2020 in March, we're up around 7%, and we're about flat with 2019 in terms of volumes. In April, we're up versus 29 -- I don't even want to talk about 2020 because that's when the world stopped. But we're up 1% or 2% in April on 2019 numbers. So positive there. In Food Merchandising, we were a little down in March versus 2020. We're about 3% down in March, but versus 2019, we're about 6% up. And in April, we're looking -- we're about 7% up on 2020 and around 3% to 4% up on 2019. And then in Beverage Merchandising for 2021 versus 2020, we're about 3% up, and we're about 12% up on 2019 in March. And we're seeing 2021 about 3% up on 2020 and a little down on 2019. So -- and obviously, month-to-month, you can see pulls -- pull forwards, pushbacks and all that sort of stuff, so that's why I give you the 2 months. So I think what we're seeing is we're seeing strong recovery in Foodservice with upside to come as further openings occur in the areas that I mentioned around the institutional part of the business, 25% of the Foodservice business historically. Food Merchandising, we're seeing good, solid volumes. We will obviously see a little bit of a pullback in things like protein trays, in cartons, those sorts of things. But we will see growth in areas that almost disappeared last year, things like bakery containers that -- as people weren't celebrating graduations and things like that. We will see that return this year. And then in Beverage Merchandising, we think we'll see -- as schools go back, we'll see more school milk. We'll also see the pull-through from Foodservice on cupstock, the cups -- paper cups that go into a lot of our Foodservice customers. So we're encouraged. We're not declaring victory yet, but we think the volumes, they're currently strong, and we think that they're going to continue like that as the economy continues to open up. Operator: The next question is from Arun Viswanathan from RBC. Arun Viswanathan: Great and welcome, Dhaval and Mike. So I guess I just wanted to ask about the Strategic Investment Program that was described during the IPO process. Maybe could you update us on your progress there, especially in light of the $20 million of headwinds that you've been experiencing within Beverage Merchandising? Michael Ragen: Sure. So as an appendix to the presentation on Slide 23, it provides the summary. To date, we've spent $498 million of the $661 million in the program, and we continue to spend at rate. During the first quarter, we saw a benefit of $23 million from that, which is very positive. I think last year, we were at -- for the full year, we were at $65 million. So $23 million in a quarter means that we're accelerating on those savings, which is great to see. Through Q1, we spent -- in the mills, we took down the Pine Bluff mill. Mike King outlined the cold mill outage, and I mentioned that, that cost us $16 million in EBITDA in Q1. However, we invested substantially. We rebuilt a boiler. We did a lot of investment at that time, which is great. And we will spend circa $100 million in the Evergreen Beverage Merchandising business this year, the bulk of which will be in the 2 mills. So we're continuing to invest there. And we'll continue to invest to see the benefits that we're expecting from -- as the mills turn around. Arun Viswanathan: So as a follow-up, just given what you said and given some of the cost pressures, so I imagine you would be caught up on resin price inflation by the end of this year. You'd get the $50 million back from the storms next year, and then you'd add in the increases from the SIP or the benefits. So would you expect 2022 to look more like '19 then? And obviously, I guess that's dependent on the Foodservice recovery to a full extent. But is that a fair characterization of how you're thinking about the longer term or the next couple of years? Michael Ragen: So I don't want to overcommit here, but I would expect that 2022 would be better than 2019. And if I just sort of walk you through my thoughts on it. The second half of this year, I mean, you can infer the numbers that we're expecting to see in the second half of this year, and a lot of that is around recovery from COVID, benefits from our Strategic Investment Program and essentially just costs in our plants coming down as we've really increased costs there. And so -- and plus, to your point, we are recovering and we'll recover through our contract pass-throughs the increased costs in resin and other raw material inputs. So our exit run rate should be very strong, and we will continue to see benefits from the Strategic Investment Program. We will continue to see -- we're not saying that by the end of the year, we'll be recovered from COVID. That will linger into next year. And we also have other programs that Mike King outlined that we will provide further clarification on in future calls. So my personal view, and I think what Mike and I have discussed, is next year, we'll exceed 2019. Operator: The next question is from George Staphos from Bank of America. George Staphos: Again, welcome, Dhaval and Mike. I want to start with my first question really more around volume, and then I want to get into Evergreen and the mills to the extent that we can talk. So Mike or Mike, the little bit of weakness that we saw in Food Merchandising volumes in the quarter, is that just what we would expect a little bit of weakness because of the reopen? So you're getting it in Foodservice, so that means we're not shopping the perimeter of the store as much for food at home. Or is there something else behind that? And a unrelated volume question. How are you marketing EarthChoice and the plastic packaging you make in that business as sustainable? What's your -- what are you finding as most resonating with the customer there? Is it the recyclability or something else that is allowing you to present that as a sustainable choice? Michael Ragen: Okay. So. Michael King: Well, let me take the EarthChoice. Michael Ragen: Yes, please. You go ahead, Mike. Michael King: Yes. So I'll answer your second question, George. On the EarthChoice, it's both. It's recyclability, for sure, but it's also recycled content as we look at those levers. It's not the same across the board. But certainly, those are the 2 -- out of the 3 pillars, the 2 that we're leveraging in the poly side of EarthChoice. George Staphos: And how much recycled content are you using right now within EarthChoice or across the whole platform? Michael King: I'll have to get back to you on that. Do you know, Mike Ragen? Michael Ragen: I'm sorry. The question was how much recycled content? George Staphos: Yes. Michael King: Yes. I don't know. Is it 15% or 20%? I'm not -- we can get that exact number. I don't -- we don't have it off the top of our head. It's. George Staphos: That’s fine. Michael Ragen: It depends on the product itself. We can do -- for example, recycled PET, we can do 100%. But it just depends on the clarity required and so -- and the cost and things like that. So -- but we -- we'll balance that out. And so it's not one answer across the board. George Staphos: We can save it for later. I was just asking in total where you are right. Or now versus '20, how much content did you use. But we can sort of dig into that off-line. And on the Food Merchandising volume trends and what's driving that? Michael Ragen: Yes. So what we've seen, we have -- we sell into the consumer channels. We've seen some lower volume there. And we've seen a small pullback in protein trays and egg cartons, which we'd expect. George Staphos: Okay. Turning to Evergreen and the mills. I guess the overarching question is, if we look back, the guidance for the business and for the whole company, which is largely -- the reduction has been largely driven by Beverage Merchandising, it's been well over $100 million. As you've been able to look at it, what has been the biggest driver of the variance if you grew that number within Evergreen? It sounds like it's mostly reliability. And what are you finding is causing you most of the problems right now in terms of reliability at the 2 mills? Is it the head box? Is it something else? And what gives you the confidence, given what you know right now, that you'll be able to resolve those issues? Because old mills sometimes take a lot more investment to get up the curve than initial expectations based on past experience. So what's giving you the confidence there? Michael King: Yes, I'll take this one. So not a simple answer, and it's certainly different. We have 2 mills, as you know, and both are in different stations in their excellence journey. I would tell you, if you break a mill into its 7 or 8 sub-facilities, there isn't one of those sub-facilities that hasn't needed special attention to get to the best place we can on our cost curve. I would tell you Pine Bluff -- just generally, you should think about Pine Bluff as a bit further in their journey. Our operational metrics are all headed in the right direction. We're just coming out of a cold mill outage, where we've been able to invest heavily in all 8 of those sub-facilities, if you will, whether it's chip production, pulping, bleaching. Every one of those sub-facilities is getting a lot of attention, and we're seeing that improve. I would say, to your granular question, our paper production side or in our board production side, our paper machines run well. So it's not head box issues in Pine Bluff. It's not -- we're not having overhaul-related or major issues. It's really a story of reliability on all the upstream and making sure that those things which have, frankly, otherwise been hampering uptime don't hurt our ability to be efficient on the paper and board side. And similar story in Canton, frankly. There's been a lot of investment in Canton. We did not have a cold mill outage. So we're doing a lot of things. We're flying the plane and fixing major items that as we look at the medium- and long-term viability of that operation, without having a cold mill outage, we're doing everything we can to, again, not see the downtime manifest itself into our paper and boiler production. So similar story. It's all in the upstream and getting consistent labor and consistent -- taking advantage of the downtimes we have to keep the machines up is the focus. And so it's not like there's one big rooming item. It's more systemic, and that's why we're somewhat reluctant to go into a lot of detail on the strategic review until we get through what might be some step function changes we can make there. I hope that answers your question, George. George Staphos: No, Michael, it's very helpful. More work to be done, but we appreciate it. Operator: The next question is from Kyle White from Deutsche Bank. Kyle White: Mike, Dhaval, congrats on the new role. Mike, I know it's relatively early days here, I mean, in your role. But when you take a look at the business portfolio, specifically looking at Beverage Merchandising, just trying to understand your thoughts in terms of what you -- how you view that segment in regards to the overall portfolio at Pactiv Evergreen. Michael King: Yes. So I kind of think of it as liquid boards and cupstock and things that we vertically integrate, and then I think of everything else. So our coated groundwood or uncoated free sheet businesses. I kind of look at it that way. And I don't have any -- I can tell you that it's exciting to see what the synergies and really the benefits that our converting facilities across the board will realize as we continue to straighten the mills out on the liquid packaging side, liquid paper side. But I -- it's too early for me to be able to comment on coated groundwood or uncoated free sheet spaces, all of which we're -- we have pretty good saturation in those spaces, on our SKUs. And -- but I can tell you that we're rolling all areas of each segment over and looking at it from -- whether it's commercial levers and pricing to profitable SKU mix to where we want to lean in on products like EarthChoice. And so it's a full end-to-end look. I know I didn't give you probably what you're looking for because we're just not there yet on all the segments, but that's kind of how I think about it, as 3 big buckets, one of which is really exciting, I can tell you that. The other 2 we're reviewing in detail. Kyle White: No, that's helpful. On the $25 million of additional synergy projects that you have identified, do you have a time line on when you expect to realize these? And what's kind of driving these synergies? Michael King: Yes. It's premature to be able to give you an exact or even an indicative. I'd like to get through the strategic review before we go live on that. Operator: The next question is from Sam McGovern from Crédit Suisse. Sam McGovern: With regard to the impact from the Texas storms, can you talk a little bit more specifically about how it impacted you and whether there's any recoveries that you guys would anticipate from any business or option insurance? Michael Ragen: Mike, do you want me to take that? Michael King: Let me take the front end, and I'll let you talk about the recovery potential. Michael Ragen: Okay. Michael King: The -- to say it was an eclipsed event that was somewhat unfortunate -- we planned a cold mill outage for the week after when the storm hit. What the storm did was force us to pull the cold mill -- take the mill cold sooner than we wanted. So it was, no pun intended, a perfect storm. It hit us right at the worst time it could. So taking a mill cold during a cold snap in the South, freezing pipes, exposing already weak linkages. There wasn't one -- if you think of the mill as kind of 8 or 9 sub-facilities, there wasn't one of those sub-facilities that wasn't greatly impacted. And so you couple that with the cost -- the rising cost of energy for us, particularly natural gas, having to commit to purchase natural gas to keep things heated, coupled with the breakages and really a cold storm in a mill that far South really exposes anything that's weak, things that would normally be maintained. And so it was -- it exacerbated our ability to, a, focus on the things that we had already planned in the cold mill, but it also -- a lot of things that we hadn't planned to work on needed to get fixed quickly. So we were down longer than we wanted to be and certainly paid more for the energy during that period of time. And the body of work and the scope of work that we had planned in that outage, whether it be recovery boilers, whether it be -- a lot of what failed was pumps. We had several pump failures, turbines and energy -- backup turbine generators. There's a host of things that exposed themselves during that -- the storm for us in the Pine Bluff mill. And then Mike, I'll let you talk to the energy side of that and potential for recovery, et cetera. Michael Ragen: Yes. So in terms of recoverability, we're reviewing all of our options as you'd expect. We're not sure that we'll get anything back, but we're pushing for it. So we're hopeful. We haven't factored anything into our forecast, though. The energy piece is -- as you'd expect, energy prices spiked. And before we shut down, particularly in Arkansas, the mill, we saw natural gas prices through the roof, and that obviously cost us a lot of money as well. Sam McGovern: Okay. Great. That's helpful. And then just with regard to the rising raw material and other costs, how should we think about the impact to the working capital line in terms of cash flows as we roll through 2021? Michael Ragen: Yes. So we have seen -- in Q1, we saw a $50 million increase in our inventories due to the increased raw material costs. So we're managing our inventories right now and trying to somewhat offset that. But we did -- in Q1, we saw a $50 million increase to working capital. And through the end of the year, that will be somewhat higher due to rate, but we are -- we've been doing a lot of work on our -- what we talked about through the IPO process, our integrated supply chain program. And one of the benefits of that program is to allow us to bring our inventories down. And so we will see an offset to that, the higher rate number. But -- and that's -- so physical inventories will come down, but we're expecting to see total inventory to be up by $30 million, $40 million at the end of the year because of higher raw material costs. Operator: The next question is from Mark Wilde from BMO. Mark Wilde: Mike Ragen, I wondered if you are able to quantify the second quarter impact from the resin mismatch. Michael Ragen: Well, I can and have personally. But in terms of what I'm expecting to see in terms of our guidance for Q2, we're expecting to see, as we've said already, strong volumes. However, a lot of that volume impact will be offset by the higher raw material costs in the quarter. So I would not expect to see a materially higher quarter than last year. However, then, we'll recover and we'll see higher margins through Q3 and Q4. Does that help? Mark Wilde: Yes. I just -- what I was hoping for is that maybe you could give us sort of a range in terms of millions of dollars of impact from just the resin mismatch in the second quarter. Michael Ragen: Okay. So it's around $50 million to $60 million. Mark Wilde: Okay. All right. And then another question I had was just what type of volume expectations on a year-over-year basis do you have built into the second half at this point? Is it possible to give us some guidance about what you're embedding in the numbers right now on a segment-by-segment basis? Michael Ragen: Sure. I'll give you some guidance. So what we're expecting to see is -- in Foodservice, what we've embedded in the numbers is to be -- and it's easier for me to talk versus 2019 because I don't know whether. Mark Wilde: That's fine. That's fine. That's fine. Michael Ragen: 2020 was a little all over the place. But -- so we've sort of said in our Foodservice numbers to be 4% to 5% down versus 2019. Now as I've said earlier, that hasn't manifested itself in March and April in Beverage and Food Merchandising, where we would expect to be around flat to 2019. And in Beverage Merchandising, we would expect to be a little down in the early months and then pick back up in the back end to be flat to '19. Mark Wilde: Okay. All right. That's very helpful. And then Mike, if I could. Last summer when the management provided many of us on the call with projections for 2021, those numbers were almost $200 million higher than the current guidance. Now if we leave aside some of the issues from the first quarter, there's still a big gap there. Can you just talk about what the 2 or 3 drivers have been to kind of reduce guidance over the last 8 or 9 months? And then also, what you're doing going forward to kind of improve that guidance. Michael Ragen: Yes. Okay. So Mark, I think as you know, I think the big variance is in Beverage Merchandising, and that's what George alluded to before. So -- but let me give you the easiest one first. Foodservice outlook versus what we had when we discussed this with you, it's off about $20 million. And we made certain assumptions back in 2020 around how quickly we'd recover from COVID, how quickly children would go back to school, et cetera, et cetera, and some of those didn't play themselves out. And so that represents about $20 million of the outlook. Now as I said earlier, we are seeing stronger volumes than what we had in the outlook. So who knows where that will manifest itself. The big down is in Beverage Merchandising. And between the last call -- well, sorry, the guidance that we gave you guys and then where we went to last call, we came off about $80 million, and I'd split that into 2 different things: price and volume and essentially the recovery of the mills and the timing around that. So in terms of the price and volume, we've seen lower pricing, particularly in the paper segments. Also, some pricing on board volumes because we want to keep the mills full. And we've had to chase volume there to make sure that we are keeping -- we're not taking any downtime. So -- and so we've had to sell board volumes at lower pricing than what we had assumed, again, around recovery. Secondly in that area, schools. Again, I mentioned that in Foodservice, same in Beverage Merchandising, it's a big part of our business, school milk. And that manifests itself in the board as well because we also sell to competitors who convert into school milk. So they're the big pieces on price and volume, and that's about half of the $80 million. The other half is mill recovery timing, $40 million, okay? So the speed at which the mills are turning around is not as fast. And then what we just outlined this morning was they're not recovering as quickly than what we had assumed in our prior guidance, and that's brought it down another $20 million, okay? And then the last piece is obviously the storm, $50 million. So that should walk you backwards from where we were to where we are today. Mark Wilde: Okay. Very helpful. And kind of going forward, Mike? Michael Ragen: So going forward, you mean about like how we sort of. Mark Wilde: I mean, just sharpening the guidance, yes, because this is a -- it's a huge drop over the last 8 or 9 months. Michael Ragen: Sure. So I'd sort of look at this year as a bit of a tale of 2 halves. This year, Q1, you've seen the results. Q2, we're going to be -- we'll be weighed down somewhat by the raw material increases and us catching price back up. However, I think what you -- what I hope to see and what we're starting to see is stronger volumes. So you'll be able to see that, and that should give you some confidence in what we're saying about Q3 and Q4. Obviously, proof is in the pudding. Then in Q3, Q4, we should see stronger volumes. We will have caught up on price. And we would expect that some of the positive trends that we're starting to see in the mills continue to improve such that we're exiting 2021 at a nice exit run rate. In terms of what next year looks like, and I'm not going to commit to any numbers, but the way that I look at it is we'll see continued recovery from COVID, we'll see continued benefits from our Strategic Investment Program, which will play themselves out over the next year or 2. And some of these other programs, which we'll outline in upcoming calls, we should see some benefits from that. So the volume tailwinds that we have in front of us, combined with reducing costs in our plants around COVID, plus getting on top of the mills, again, we haven't demonstrated that, but we've got the right structures around that, I think, will lead to improved results in the back half of this year and then going into 2022. Operator: Next is a follow-up question from George Staphos from Bank of America. George Staphos: I'll try to make a quick lightning round here. So Mike or Mike, when would you expect to have new leadership for the mill system and Evergreen? Number one. Number two, can you remind us what was the capital spending outlook? And might some of the required remediation lead to more spending? And then lastly, with Canton, do you need to take a cold outage this year so that you're not trying to, as you put, fix a plane while flying it at the same time? Michael King: So thanks, George. And now I'll piggyback because I have the answer to the question. I couldn't tell you on the recycled content as well. But new leadership, our hope is before we have our next earnings call, we have a new leader in place or sooner. Capital outlook, I think our number for the year is $305 million . We don't really anticipate going over $305 million. Canton, no, we will not be taking a cold mill outage. We're not anticipating that in 2021. And the answer to your prior question on recycled content is the minimum is 25% in our poly EarthChoice. And it can go as high as 100%, but the minimum is 25%. Operator: The next question is from Scott Schwartz from HPS Partners. Scott Schwartz: Do you have any thoughts surrounding your 2023 maturities, the ones that are remaining? Michael Ragen: We're reviewing that at the moment. No definitive thoughts. But obviously, we would look to do something with that in the next year. Operator: This concludes the question-and-answer session. I'd like to turn the call back over to management for any closing remarks. Michael King: Yes. Thank you very much. I want to just thank everybody for joining us today. We look forward to brighter quarters and talking about the progress this business is making as we continue the year. Thank you. Operator: This concludes today's conference call. You may disconnect your lines. Thank you for participating and have a pleasant day.PTVE Ratings Summary
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Pactiv Evergreen Shares Drop 13% Despite Solid Q4 Results
Pactiv Evergreen Inc. (NASDAQ:PTVE) shares dropped more than 13% on Tuesday despite strong quarterly results in a challenging backdrop and an outlook that was relatively in line. Q4 revenues came in at $1.476 billion, down 3% year-over-year. Adjusted EBITDA was $167 million, which was 5% above the Street estimate.
The outlook for 2023 was relatively in line on a like-for-like basis as well. Further, the company announced a major restructuring of its Beverage Merchandising segment with the closure of its Canton mill that represents 5.5% of domestic solid bleached sulfate (SBS) capacity, while it explores strategic options for its Pine Bluff mill.
The main negative that may be the reason for a stock sell-off is the lack of deleveraging due to the large cash restructuring costs with leverage at 4.6x, while benefits from the program are limited given the offset from earnings loss associated with the Canton closure.
Pactiv Evergreen Shares Drop 13% Despite Solid Q4 Results
Pactiv Evergreen Inc. (NASDAQ:PTVE) shares dropped more than 13% on Tuesday despite strong quarterly results in a challenging backdrop and an outlook that was relatively in line. Q4 revenues came in at $1.476 billion, down 3% year-over-year. Adjusted EBITDA was $167 million, which was 5% above the Street estimate.
The outlook for 2023 was relatively in line on a like-for-like basis as well. Further, the company announced a major restructuring of its Beverage Merchandising segment with the closure of its Canton mill that represents 5.5% of domestic solid bleached sulfate (SBS) capacity, while it explores strategic options for its Pine Bluff mill.
The main negative that may be the reason for a stock sell-off is the lack of deleveraging due to the large cash restructuring costs with leverage at 4.6x, while benefits from the program are limited given the offset from earnings loss associated with the Canton closure.
Pactiv Evergreen Shares Drop 13% Despite Solid Q4 Results
Pactiv Evergreen Inc. (NASDAQ:PTVE) shares dropped more than 13% on Tuesday despite strong quarterly results in a challenging backdrop and an outlook that was relatively in line. Q4 revenues came in at $1.476 billion, down 3% year-over-year. Adjusted EBITDA was $167 million, which was 5% above the Street estimate.
The outlook for 2023 was relatively in line on a like-for-like basis as well. Further, the company announced a major restructuring of its Beverage Merchandising segment with the closure of its Canton mill that represents 5.5% of domestic solid bleached sulfate (SBS) capacity, while it explores strategic options for its Pine Bluff mill.
The main negative that may be the reason for a stock sell-off is the lack of deleveraging due to the large cash restructuring costs with leverage at 4.6x, while benefits from the program are limited given the offset from earnings loss associated with the Canton closure.
Pactiv Evergreen Shares Gain 8% Following Q3 Results
Pactiv Evergreen Inc. (NASDAQ:PTVE) shares rose more than 8% on Tuesday following the company’s reported Q3 results, with net revenues coming in at $1.609 billion, up 15% year-over-year.
EBITDA of $187 million came in ahead of the Street estimate of $173 million. The outperformance continues to be driven by price and mix as the company drives value over volumes. Understandably, this is weighing on volumes, which were down 8% in the quarter. Though, the company noted that its end market demand was relatively stable with most of the volume declines driven by its strategy.
