Hello, and welcome to the Ranpak Q3 2021 Earnings Call. I will now hand over to Sara Horvath to begin today's presentation.

Thank you, and good morning, everyone. Before we begin, I would 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 those 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. We 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 will be filing with the SEC our 10-Q for the 3 months ending September 30, 2021. 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 third quarter results, and Bill will provide some additional detail before opening up the call for questions. With that, I will turn the call over to Omar.

Thank you, Sara, and good morning, everyone. I appreciate you all joining us this morning. Ranpak continued the momentum of our strong first half of 2021 by delivering another quarter of outstanding results. Our strong performance was driven by our employee base around the globe, dedicating their efforts to drive growth and improvements in the business. The focus, dedication, and most importantly, the effort has been tremendous, and I could not be more proud of the team. In particular, I'd like to recognize the supply chain team for their contributions over the past few months as we navigate a complex and dynamic supply chain environment. At the same time, our business development team has helped us add meaningful capabilities through our M&A and investment efforts. Demand for our products remains robust as companies across the globe are looking to make their fulfillment processes more efficient, more reliable, and more environmentally friendly. Our teams have done an excellent job to position us well to meet this increased demand. We continue to expect a record year at Ranpak, meaningfully surpassing our original guidance and entering 2022 well-positioned to achieve our longer-term growth objectives. Our diversified portfolio once again delivered balanced results with all product lines up meaningfully year-over-year and all regions displaying double-digit top line growth. We also have a number of initiatives currently in process that we believe will position Ranpak for success over the next few years. Our profitability was up meaningfully in the quarter as the teams have been working extremely hard to address headwinds from inflation affecting many input costs such as commodities and transportation as well as the scarcity of labor. Although we are not completely immune from these market challenges, our teams have been diligent throughout the year in their pursuit to insulate us as much as possible from the impact of supply chain disruptions occurring globally. Our investments in working capital earlier this year have helped us navigate this environment well and enabled us to continue to meet customer needs for our paper and equipment. Our pricing actions to date have helped maintain our best-in-class margin profile while also positioning us to increase penetration. This environment continues to be fluid, so we will continue to be proactive about managing our P&L and addressing areas of continued input cost pressure. In general, given the rise in input costs globally, whether it is materials, freight, or labor, we believe this is an environment that should drive further demand for our solutions as we provide our end-users with the ability to have faster throughput, reduce labor, optimize dunnage, and reduce package size. In our last earnings call, we announced our strategic investment in Pickle Robot. As a reminder, Pickle has developed a low-cost collaborative package-handling robot that automates several key tasks along the e-commerce supply chain. We believe their offering is a great complement to Ranpak's portfolio of automated solutions. In this quarter, Ranpak made an additional strategic investment, this time in the area of material science. We have invested in an emerging German company called Creapaper, which uses a patented process to produce grass paper, a raw material required for producing glass paper. Grass paper is exciting because it is renewable and helps reduce CO2 emissions across the global paper and packaging industry. Grass paper reduces the use of wood pulp and meaningfully reduces water consumption. In our view, Creapaper's grass paper products, which currently include hygienic papers, food and carrying bags, and single-use plastic replacements, are poised for expansion globally and complement Ranpak's core products quite well. Turning the discussion now to third quarter highlights. I'm extremely pleased with the performance of the quarter as we achieved solid growth in all regions and product lines compared to the prior year. For the quarter, consolidated net revenue on a constant currency basis increased 25.6% to $95.6 million, driven by robust demand for all product lines. North America continued its solid growth trajectory for the year with an increase in net revenue of 12% for the quarter, driven by Cushioning and Wrapping. Activity levels across all applications remained strong as we continue to expand our relationships with 3PLs and achieve closures related to toys, retail, health, and beauty. We continue to gain traction with our post-consumer paper offering, helping us replace air pillows at a number of retail and consumer brands. Europe and Asia Pacific led the way this quarter in terms of growth. On a constant currency basis, for the quarter, net revenue in Europe and Asia Pacific was up approximately 36.2% as all product lines delivered meaningful growth. We have strong close activity across a variety of end markets in the quarter with sustainability and e-commerce continuing to be key drivers of performance in the region. Retail and industrial were particular areas of strength in the quarter, resulting in Void-fill and Cushioning seeing substantial new close activity. Adjusted EBITDA in constant currency terms increased 20.3% year-over-year due to increased sales, offset slightly by increased operating costs and G&A as we manage inflationary headwinds and increased headcount dedicated to our growth initiatives. Overall, I'm very pleased with our results and believe they reflect the balance we are trying to achieve as a company between growth and maintaining profitability. We're investing in additional production capacity across the globe as well as growth initiatives to fuel Ranpak over the next few years with the goal of creating incremental shareholder value. We believe Ranpak has the ability to grow meaningfully through new product innovation, expansion into under-penetrated geographies, and by expanding our offerings. With that, let me turn the call over to Bill, who will give you further details related to the quarter.

Thank you, Omar. In the deck, you will 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 at its fastest rate this year, increasing 14.2% year-over-year to over 129,000 machines globally. Cushioning systems grew 5.1%, Void-fill installed systems increased 14.7%, and Wrapping increased a robust 33.3% year-over-year. Overall, net revenue for the company in the third quarter was up 25.6% year-over-year on a constant currency basis, driven by excellent top line performance in Europe and APAC as well as strong growth in North America. Within Europe and APAC, from a geographic standpoint, growth was most pronounced in Eastern Europe and the Nordic region, with excellent performance as well in Australia, Japan, and South Korea. In North America, we experienced strength in all regions, with the West and Midwest as particular bright spots. And regarding end markets, sectors such as health and beauty, electronics, retail, and 3PLs continued their momentum. From a global perspective, within PPS, all categories were up meaningfully with Cushioning up 28.0%, Void-fill up 18.5%, and Wrapping up 23.8% on a constant currency basis. Our gross profit increased 25.1% on a constant currency basis, driven by higher volume and price. This rate is just slightly behind our sales growth due to the impact of higher material and overhead as well as freight costs versus the prior year, partially offset by improved margin on automation and production variance, implying a gross margin of 39.1% in the quarter compared to 39.3% in the prior year. Adjusted EBITDA rose 20.3% year-over-year to $28.5 million, implying a robust 29.8% margin. In the quarter, we benefited from strong sales growth, which was slightly offset by increased operating costs related to production and investments in personnel to further enhance our teams. Overall, we were pleased with the balance in the quarter of sales growth while maintaining an attractive margin profile. Capital expenditures for the quarter were $14.4 million, driven largely by increased investment in converters and investments in key initiatives to enhance our capabilities. Throughout the year, we have invested meaningfully in enhancing our safety stock to blunt some of the impacts of the supply chain disruptions being experienced globally. We feel that our levels of safety stock at this point are sufficient and will look to convert our spend to be more in line with the placement going forward. Moving briefly to the balance sheet and liquidity. In September, we entered into a cross-currency swap agreement to hedge the variability of exchange rate impacts between the U.S. dollar and the euro. Under the terms of the cross-currency swap agreement, which took place at a spot exchange rate of 1.1835, we notionally exchanged USD80 million term loan debt at an interest rate of 5.84% or €67.6 million at a weighted average interest rate of approximately 5.02%, saving us 82 bps annually on the interest expense on the notional and better hedging our exposure to cash flows associated with our Europe and APAC operations. This cross-currency swap agreement has been designated as a net investment hedge and will expire in June of 2024. As a result of this transaction, the company will have effectively $170 million in USD term loan outstanding as well as $204 million of the euro tranche. On the cash side, following our investments in Pickle and Creapaper as well as other initiatives, our cash balance in the quarter was $110.4 million. Our net leverage based on reported LTM adjusted EBITDA was 2.6x at the end of the quarter. We have a strong balance sheet and have been putting it to work recently strategic investments that help our business and our customers now as well as provide optionality in the future. Looking forward, while the fourth quarter is a challenging comparison given the exceptional profitability last year, we believe we are well-positioned heading into the end of the year and 2022 as industrial activity remains solid, consumer spending remains robust, and environmental considerations are more integrated into packaging decision-making. We've taken pricing actions to date across the globe to maintain our attractive margin profile and are continuously evaluating the need for further actions as the environment requires, particularly as it relates to moves in commodity and energy markets. Touching on energy. On one hand, oil is a key feedstock for the petrochemical industry. So sustained upward movements have the potential to further improve our competitive position versus plastic and resin-based competition, all else equal, hopefully providing additional opportunities to expand our business. On the other hand, in Europe, the natural gas market has been in flux recently, and while our own operations are not major users of electricity, we are closely monitoring the impact prices could have on our paper suppliers as well as industrial and consumer activity. Again, we are extremely vigilant of the environment and continuously working to manage our cost structure to maintain our margin profile. Customers see the value in our solutions, particularly in an environment like this, and we feel confident in our ability to pass through costs. With that, I'll turn it back to Omar before we move on to questions.

Thank you, Bill. To summarize, I'm very happy with our performance. The environment is not an easy one to navigate with the pandemic inflationary pressures on supply chain headwinds, but we have a great team and a great model that continues to show its power and resilience. These are exciting times at Ranpak. Our headcount is now greater than 850 people, up from 550 when Ranpak first went public. The talent we have added is across the board, and I'm pleased to report our new folks are hitting the ground running and integrating well with the Ranpak veterans, all coming together to deliver a better world. Every day, we take one step closer in our cultural development, focusing as one global team on customer centricity, performance, and accountability. Along with sustainability, those principles comprise our North Star. To continue to build our ownership culture, I'm proud to share that in September, we made a companywide equity grant for employees on payroll at that date who do not receive equity as part of their annual compensation. The grant vests after two years of continued employment and is the second grant of its nature we have made since going public. I'm thankful to our Board for supporting this equity ownership program as I believe the first grant we did back in 2019 went a long way toward establishing our ownership culture. I believe this additional grant cements that mindset and instills that behavior even further. With that, thanks again for joining us this morning. I will now open it up to questions.

Our first question today comes from Greg Palm of Craig-Hallum Capital Group. Your line is open. Please go ahead.

Thanks. Good morning, everyone and congrats on the really good results here.

Good morning, Greg.

Thanks, Greg.

So, I guess just kind of starting on supply chain logistics environment. You seem to have navigated this a lot better than what we're hearing from a lot of other companies out there. And so I guess my question is, was there any impact or maybe you can quantify if there was an impact? And I guess, looking ahead, do you feel like you have sufficient inventory levels and at least line of sight into continuing to navigate this sort of whole mess in the year and into next year?

Yes, Greg, I feel very good about the effort that the team is putting into it. Supply chain, obviously, right now is a tricky topic for all sorts of companies. I think as we look out for the next number of months, we feel very good. It's taking more work and it's taking more effort. But I think our planning has paid off when we started investing a bit more in working capital, planning to build safety stock in our inventory as well as in our converters. All that is paying off. I think what we see right now is a continuation of some delays here and there, freight costs creeping up, but the overall picture for us continues to be a pretty good one, and we continue to feel that despite the challenges, given the incremental work we are doing, we are well-positioned.

Got it. And I know we're only allowed one question. So I just want to maybe clarify, Bill, some of your comments on profitability and challenging year-over-year compares. Obviously, last year's margin was maybe an outlier, but even with all sorts of some investments and increased costs. Is it still fair to assume that you're expecting a nice bump in EBITDA margins at least sequentially.

Yes, Greg, I think that's fair. I think I just wanted to point out in the opening remarks that last year was exceptionally profitable for us. We had a favorable paper pricing environment as well as exceptional capacity utilization within the production facility. So it is a little bit more challenging year-over-year given the environment that we are in.

Yep. Makes sense. All right. I will hop in a queue, thanks.

Our next question today comes from Ghansham Panjabi from Baird. Your line is open. Please go ahead.

Thank you. And good morning, Omar and Drew.

Good morning, Ghansham.

Yes, my question is focused on 2022. There is clearly a lot happening, including supply chain challenges that affect both customers and suppliers. Based on your current insights, could you provide a framework for how we should consider machine placements and key factors as we refine our models for 2022? Additionally, North America has seen significant growth recently, while Europe and Asia Pacific have been driving growth trends over the last few quarters. Do you foresee a more balanced growth contribution from these two regions in 2022?

I do, Ghansham. I think '22 will shape up to be a little bit more balanced given all the investments that we've done in North America. In the last couple of quarters, we started trending nicely in the U.S., and I expect that to continue in 2022. Look, despite the challenges from a supply chain standpoint and labor market standpoint, demand for our product continues to be robust. From everything we're seeing, our expectation is that robustness will go into 2022. We expect demand for our converters, demand for our automation solutions, and frankly, demand for cold chain as we build more capabilities there to be quite strong. When we look at underlying sectors in retail, in industrial activity, in automotive, toys, health and beauty, and I can go on and on, we are seeing quite a bit of strength with our end-users. And despite the challenges of getting products to them on time, etc., and then shipping to their own customers, we think that picture is going to be with us for a little while. So our expectations are that we believe, given the demand that we are seeing and the backlog of interest that we are seeing, that 2022 should shape up pretty nicely for us.

Got it. Thanks so much.

Thank you. Our next question comes from Adam Samuelson of Goldman Sachs. Your line is open. Please go ahead.

Hi. Yes, thank you. Good morning, everyone.

Good morning.

Good morning. I have a two-part question. First, regarding the performance this quarter in machine placements, the sequential change in the installed base is the largest you've seen on a quarterly basis since going public. I'm trying to understand if this activity is due to getting ahead of supply chain issues and the holiday season, or if there has been a significant increase in demand for paper solutions from your customers. Additionally, with this increase in the installed base and potentially newer customers, do you think it will take time for them to start purchasing at a rate similar to the rest of the installed base, which could lead to a decline in revenue per machine due to a less experienced customer base?

I will let Bill take a big part of both of your questions, but let me start by just the following observation. I think what we are seeing with demand for our converters, you're spot on that typically the way our cycle works is selling the idea of our product to our customer, trialing it, then it closes, then you're installing, and that's what you're seeing. And then there's a little bit of a ramp-up period until they're using more and more of that product. I think to the point I was mentioning earlier in terms of a more balanced growth part of that more balanced approach is you're seeing more converters, more equipment being placed also in the North American market driving that growth. So that's certainly driving the number of converters out there. When we are planning ahead, certainly, we are keeping supply chain in mind as we plan ahead. But the biggest driver is the bottom-up analysis customer by customer, where we see demand and where we see the needs for our equipment. And that's reflected sort of in our numbers of growth in terms of the number of converters out there. So I think that’s typically a great sign for our business in terms of continuously ramping up growth in revenues. But Bill, maybe I turn it over to you.

Sure. Thanks, Omar. So no, Adam, demand has been strong, right? Consumer spending has been solid. Industrial activity continues to come back and we like what we are seeing there. Even some increasing activity on the regulatory front and also some increased shareholder activity, too. So I do think that's getting folks' attention and getting folks to take a look at paper-based solutions. So the demand, we feel good about kind of across the globe. There was a little bit of pent-up demand, I think, in North America as we were getting caught up on some conversions from earlier this year. But overall, it's been pretty steady. And you're spot on, 14.2% is up versus the 12.9% in the first couple of quarters of the year and then I think versus nine or so in the quarter last year. So overall, I feel good about the machine placement and continuing to drive growth. As far as when those start contributing, yes, there can be a lag at times as people get their operations ramped up. Sometimes they do have to work through existing inventories if they didn't make a switch from plastic or resin-based products to ours. So there could be a little bit of a lag, but not dramatic in most cases.

All right. That’s great color. I will pass it on. Thanks.

Thank you. Our next question comes from Stefanos Crist of CJS Securities. Your line is open. Please go ahead.

Omar and Bill, good morning. Congrats on the quarter.

Good morning, Stef.

I'd like to go in a little more on the Creapaper investment. Maybe can you discuss your long-term vision there? Will this grass paper be put in machines eventually? Any detail you can give on that would be great.

Yes, sure. So Creapaper is honestly a terrific opportunity for us. Based in Germany, they use grass fiber to produce certain paper products. So those grass pellets and fiber go into the mills. And the paper that's being made, which is of different basis weights, is 20-30, in some cases, 40% grass fiber and the rest is the normal wood fiber. There are a couple of strategic interests that we have that we think Creapaper brings to the table: One, you guys have heard me in different quarterly calls talk about our retail effort. Creapaper with their grass fiber technology makes a lot of different consumer products, so tissue paper, toilet paper, napkins, envelopes, etc., that are partially made of grass paper, and these are all products that we're very interested in to broaden our retail suite as we're talking to retailers. And then the second piece is for our own paper consumption in some of our applications, in particular, Void-fill, etc., we think grass fiber could play a role and we are working with them on sort of implementing that solution in the future. And that makes our own paper usage other than, you know, the majority of our paper is recycled content, will include more fiber from grass, which saves on water usage, energy usage, and carbon emissions. So we feel there is just a huge sustainable opportunity both in our core business as well as in our retail offering.

That’s great. Thank you. And I will jump back in queue.

Thank you. Our next question comes from Alexander Leach of Berenberg Capital Markets. Your line is open. Please go ahead.

Good morning, guys and thank you for taking my question. Just on Automated Solutions, I noticed in your press release that sort of pick up in terms of its growth rate. When we start thinking about 2022, what are your backlogs looking like within this business line? And can we expect a sort of further acceleration from here on? I understand it's sort of a low base currently, but what's the outlook like when we look forward to next year?

Yes. Good morning, Alex. I think, and I've said this before, for the rest of this year, we are pretty much booked with automation with our slots. As you look at our backlog for the early part of 2022, it looks very, very strong. We continue, as we speak right now to work on opportunities in '22, particularly stuff right now that we are working on that we can close, we can deliver later in the year. From a percentage standpoint, I expect automation in '22 over '21 to deliver outstanding results. But as you indicated, it's still a relatively small piece of our puzzle. I think the growth potential is frankly limited by our ability to make and ship the equipment. It's not limited in terms of demand, and that's where we are investing heavily in more engineering, more machine assembly, and a bigger service and parts organization so that we can meet that demand. I'm expecting that you'll see, frankly, very strong numbers from us in 2022. And certainly, if you look at it percentage-wise '22 over '21, they're going to be very strong.

Great. Thanks, guys.

Thank you. We have also received a follow-up from Greg Palm. Greg, your line has been opened.

Thanks. I guess I just wanted to follow up on the automation side because it just feels like what we've seen over the last few months probably just adds fuel to the interest level there. And I guess, Omar, really, what I'm trying to figure out is how does this business ramp? And what is your kind of long-term vision in terms of what customers are actually asking you to do and provide for them?

So, Greg, we really are focused on end-of-line activity, and that includes anything from robotic arms, putting the padding or putting the item, to box customization, to case erection, to labeling, everything that happens toward the end of the line of putting an item inside a box or a parcel all the way to shipping it, frankly, including loading and unloading given our partnership with Pickle. We today have solutions that can automate the full part of your business. We also have solutions that could reduce the amount of labor and partially automate it. The vision is to continue to invest in that, both from a hardware standpoint, a software standpoint, and the machine learning and computer vision standpoint. And frankly, we have the talent and the pieces in place to do that. So that's a division for our business. In terms of what our customers are asking for, it depends on the customer. Some customers are asking for the full solution, while some customers are asking for pieces and bits of it where they may need certain help with padding or with case erection or with box sizing. So we're having a lot of dialogue with customers. I really think in automation, we are in the first inning of this opportunity. So I know we've been investing behind it and talking about it. We've been putting pieces together for the last year, one and a half years. And during COVID, we tried to invest more in our business to get ready. I think the opportunity for the next two to three years is phenomenal, and it's up to us to execute to go and deliver on that opportunity, and that's what we are trying to do as a company.

Okay. That’s great. Looking forward to seeing how that evolves.

Thanks, Greg.

At this time, we have no further questions. So I will hand back over to management.

Great. Thank you, and thanks, everybody for joining today. We look forward to catching up on the next quarterly call.

We thank you for joining today’s conference, and the call is now concluded. So you may now disconnect your lines.