Good day and thank you for standing by. Welcome to the Fourth Quarter 2023 Sonoco's Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Lisa Weeks, Vice President of Investor Relations. Please go ahead.

Thank you, operator, and thanks to everyone for joining us today for Sonoco's fourth quarter and full year 2023 earnings call. Joining me this morning are Howard Coker, President and CEO; Rob Dillard, Chief Financial Officer; and Rodger Fuller, Chief Operating Officer. Last evening, we issued a news release highlighting our financial performance for the fourth quarter and full year, and we prepared a presentation that we will reference during this call. The press release and presentation are available online under the Investor Relations section of our website. As a reminder, during today's call, we will discuss a number of forward-looking statements based on current expectations, estimates, and projections. These statements are not guarantees of future performance and are subject to certain risks and uncertainties. Therefore, actual results may differ materially. Please take a moment to review the forward-looking statements on Page 2 of the presentation. Additionally, today's presentation includes the use of non-GAAP financial measures, which management believes provides useful information to investors about the company's financial condition and results of operations. Further information about the company's use of non-GAAP financial measures, including definitions as well as reconciliations to GAAP measures, is available under the Investor Relations section of our website. For today's call, we will have prepared remarks regarding our results for the quarter and 2023 and outlook for the first quarter and full year 2024, followed by a Q&A session. If you will turn to Slide 4 in our presentation, I will now turn the call over to our CEO, Howard Coker.

Thank you, Lisa, and thanks to all of you for joining our call this morning to review our 2023 results and 2024 outlook. In 2023, we continued to make progress on strategic initiatives and delivered solid results in what was a pretty difficult year from a volume perspective. Despite these lower volumes, we delivered strong EBITDA margins of 15.7%, which is somewhat similar to last year. Our strong margins were the result of record performances in our consumer rigid paper cans and flexibles businesses. On the industrial side, despite volume levels similar to 2008, our team delivered record profit margins through diligent cost management throughout the paper ecosystem. Our adjusted earnings of $5.26 were within our guidance range for the year, and with intentional focus on working capital, we generated record operating cash flow of $883 million and free cash flow of $600 million for the year. We also returned capital to shareholders and increased our annual dividend for the 40th straight year. We completed acquisitions and divestitures according to plans, and our teams did not skip a beat on executing initiatives to further strengthen our foundation. I want to close 2023 by thanking this incredible team at Sonoco for their resiliency and dedication throughout the year. Certainly, the global economic and external factors did not make this an easy year at all, but we did not stand still and we delivered the second-best annual financial performance in the company's 125-year history. I'm grateful to work alongside these great people at Sonoco, as well as our customers and supplier partners, and we continue to look to the future with optimism. And with that, I'm going to turn the call over to Rob to cover our financial results and outlook. Rob?

Thanks, Howard. I'm pleased to present the fourth quarter and full year 2023 financial results, starting on page six of this presentation. Please note that all results are on an adjusted basis and all growth metrics are on a year-over-year basis unless otherwise stated. The GAAP to non-GAAP EPS reconciliation is in the appendix of this presentation, as well as in the press release. As Howard said, 2023 was a record year for Sonoco. In 2023, we achieved the second-best financial results in the company's 125-year history in key metrics such as net sales, adjusted EBITDA, and adjusted EPS. By many measures, this was our best year ever. We achieved record operating cash flow, record free cash flow, record productivity, and we invested a record amount to drive future growth and profitability. We've built a foundation for continued strong financial performance, building on our enduring operating model, strong market positions, investment-grade balance sheet, and our differentiated dividend. We're excited about the future and feel good that 2023 was a year to solidify our improvement since 2021. Full year 2023 net sales decreased to $6.78 billion due to the volumes that come from destocking and consumer and an elongated cycle in industrial. While these factors impacted year-over-year results, we grew net sales at a 10% compounded annual growth rate since 2021, due to strategic pricing, new product wins, and acquisitions. Adjusted EBITDA grew $297 million from $770 million in 2021 to $1.067 billion in 2023. Over $150 million of this increase was organic improvement due to strategic pricing and productivity. Adjusted EBITDA margin was 15.7% in 2023, a 190 basis point increase from 2021. We achieved strong profitability due to price cost in 2022 and retained this profitability in 2023 due to record productivity of $109 million. We are operating with agility and continue to match cost controls with productivity investments. 2023 GAAP EPS was $4.80 and adjusted EPS was $5.26, which was within our guidance range of $5.25 to $5.40. On page 7, we have our results for Q4 2023. Net sales decreased 2% to $1.64 billion. Volumes were lower 3.4% due to low single-digit volume declines in both consumer and industrial, and price was negative 2.3% due to negative index-based pricing. Adjusted operating profit decreased to $167 million, adjusted EBITDA decreased to $236 million, and adjusted EBITDA margin was 14.4%, a 20 basis point decrease from 2022. Q4 was an incredibly strong quarter operationally. We managed variable demand and generated record productivity of $49 million. This translated into a 180 basis point increase in gross profit margin. These operating profit results were offset by SG&A items that we consider infrequent in their magnitude, including higher employee expenses, healthcare, and accounts receivable reserves. GAAP EPS was $0.82 and adjusted EPS was $1.02 within our guidance range of $1.01 to $1.16. Tax was a $0.06 drag on the quarter as the tax rate increased to 25.7% due to actions to repatriate cash. It's notable that without the specific higher SG&A items and tax items, we would have achieved at least the midpoint of guidance. Page 8 has our sales and operating profit bridges for the quarter. Net sales declined to $1.64 billion due to negative volume mix and negative price. Volume mix was negative $20 million in the quarter as consumer continues to be impacted by inflationary pricing at retail and industrial continues to reach a cyclical low. Price was negative $39 million. We continue to achieve strong results from our strategic pricing program. Negative price was a result of deflation in index-based prices in resin, metal, and paper-based businesses. Next on this page we have the adjusted operating profit bridge. Adjusted operating profit was driven by negative volume mix and negative price cost, with strong productivity benefiting results. Volume mix was negative $10 million, price/cost was negative $14 million as positive price cost in consumer and all other was offset by negative price cost in industrial. Productivity was positive $49 million as we achieved positive manufacturing productivity due to our lean programs and positive fixed cost productivity due to continued efforts to reduce our plant footprint and optimize supply chains. Other was negative $42 million due to employee expenses, healthcare, and accounts receivable reserves. These expenses are not expected to repeat in this magnitude. Page 9 has our segment results for the quarter. Consumer sales decreased 3% to $856 million. Consumer volumes decreased low single digits due to customer inventory management and the impact of inflationary pricing. Many consumer customers are beginning to return to historical pricing practices, including discounting. However, volumes have been slow to return to typical patterns. Rigid Paper Containers sales declined low single digits due to mid single-digit volume declines offsetting positive price. Flexible sales were flat as new customer gains offset low legacy customer volumes. Metal Packaging sales decreased mid-single digits due to low single-digit volume declines and negative index-based price actions. Demand from our core customers in Metal Packaging has strengthened, but overall demand declined due to anticipated template-based price reductions in 2024. Consumer operating profit decreased to $83 million as $23 million of productivity and $17 million of price cost was offset by volume mix and SG&A, a meaningful component, of which we do not expect to repeat in this magnitude. Consumer operating profit margin was flat at 9.7%. Industrial sales decreased less than 1% to $593 million. Industrial volumes decreased low single digits due to lower demand in most key markets and geographies. Industrial prices decreased mid-single digits due to index-based pricing actions. We continue to achieve strategic pricing, but were impacted by declining paper indices and increasing OCC. OCC increased to $92 per ton from $38 per ton in 2022. Industrial operating profit decreased to $62 million, due to $36 million of negative price cost offsetting $20 million of productivity. Industrial operating profit margin remained at a historically strong 10.4%. We're protecting margins with strategic pricing and with cost actions to reduce fixed costs. The business is well-positioned to benefit from a return to normalized volumes. All other sales decreased 7% to $187 million due to broad volume declines, while other operating profit increased to $22 million due to strong productivity and positive price cost. Moving to Page 10. Our capital allocation framework aligns with our business strategy to drive value creation through earnings growth and improved margins. In the fourth quarter, we generated operating cash flow of $267 million. We invested $108 million of this cash in capital expenditures to fund our growth initiatives and improve margins. Results from these investments are translating into improved productivity and growth with new customers and new products. Further, we remain focused on increasing the dividend, which is present at $0.51 per share on a quarterly basis or a 3.5% annualized yield based on our current share price. Next, we paid off $172 million of debt in the quarter and reduced our net debt to adjusted EBITDA to 2.8x. We'll continue to be disciplined and improve our liquidity and access to capital. This is key to our strategy as we continue to have a proactive M&A strategy focused on executing the right deals based on strategic fit, scalability, financial profile, and cultural fit. We're being disciplined in a disrupted M&A market and we'll do the right acquisitions and divestitures at the right time for us. Page 11 has our guidance for Q1 and full year 2024. Guidance for 2024 adjusted EPS is $5.10 to $5.40. This guidance is based on low single-digit volume growth. Consumer volumes are expected to grow low single digits, while industrial volumes are expected to experience only limited recovery. Price cost is expected to be meaningfully negative due to contractual resets in consumer and the impact of timing and pricing lives on industrial. Another meaningful input to guidance is a $32 million increase in depreciation. We expect to grow adjusted EBITDA in 2024 and are guiding to a range of $1.05 billion to $1.1 billion. Operating cash flow guidance is $650 million to $750 million, working capital is expected to be a $100 million to $150 million use of funds, as we invest in inventory and receivables to assess supply chains and enable volume growth. Guidance for our capital expenditures is $350 million. We have increased the proportion of capital expenditures focused on long-term growth and profitability projects. This investment is expected to drive record productivity in 2024 and beyond. Guidance for Q1 2024 adjusted EPS is $1.05 to $1.15. We're expecting modestly negative volume in consumer as our customers remain cautious. Consumer price cost is expected to be negative due to contract pricing resets. Industrial volumes are not expected to improve in Q1. Industrial price trends are improving but price cost is expected to be meaningfully negative on a year-over-year basis, due to last year's low OCC comparative and last year's higher chip comparative. Now, Roger will further discuss the outlook for the business.

Hi. Thanks, Rob. If you please turn to Slide 12 for our view of segment performance drivers in 2024. Let me start with our first quarter outlook. In the Consumer segment, we expect volume to be up sequentially over the fourth quarter, but basically flat year-over-year from continued lower consumer spending due to retail price inflation. In rigid paper containers, we see volumes slightly down in North America versus a strong start last year, flat in Europe, and some nice year-over-year sales growth in the rest of the world from new product launches and our expanded capacity in South America and Asia. Organic flexible volumes are projected to be flat to down slightly due to continued softness in our base soft baked goods and confection business, but aided in the first quarter from the benefit of the Inapel acquisition in Brazil. In our Metalpack business, we did see a recovery of our steel aerosol business in the fourth quarter, offset by some softness in food. In the first quarter of 2023, we expect low- to mid-single-digit increases in both food and aerosol bottle cans. In the Industrial segment, volumes are up sequentially from last quarter but down low single digits year-over-year with weakness primarily in Europe and Asia, as many of our end markets are tied to consumer staple and durable spending and inflationary factors that have slowed spending. We do expect higher paper mill utilization in the first quarter in our global paper system driven primarily in North America. During the first quarter, there will be an outsized impact from negative price cost as input costs continue to rise and the timing of pricing updates lag. We expect the impact of negative price cost to improve over Q1 levels as we move throughout the year. Productivity remains strong as our team is effectively managing costs throughout our renewal and converting systems. In the All Other segment, volumes continue to remain soft with price cost offsetting some impact of the lower volumes. Now, turning to the full year 2024 guidance. We expect consumer volumes to be up low single digits and productivity remains strong. We're anticipating relatively stable material pricing and supply chain performance, but do expect consumer price cost for the year to be negative from contractual pricing resets, somewhat offset by productivity. In industrial, we're not projecting volume recovery in the first half of the year. We also expect price cost to remain negative from index-based pricing and higher input costs, which will be weighted to the first half of the year. As you know, we've announced price increases in North America on both URB paper and converted products effective February 1, and these increases are progressing well. The team continues to do an excellent job of expense management and we expect that productivity and manufacturing efficiencies will offset negative volume impacts. And lastly in all other, we anticipate fairly stable demand across the businesses and good productivity to continue throughout the year. So overall, we remain, I believe, appropriately conservative on volume recovery across the segments with good productivity and cost control in place until we see volume recover. With that, back to you, Howard.

Thank you, Roger. As I mentioned earlier, we are actively pursuing a comprehensive strategy with various plans and initiatives throughout the company, and I'd like to share a few highlights. First, regarding divestitures and closures, we are continuing with our portfolio transition and optimization efforts. Last week, we announced the closure of our Sumner, Washington URB paper mill, which was the oldest mill in Sonoco's North American network. The costs to recapitalize it were not feasible, so we are shifting production to lower-cost mills within our network. We have owned the Sumner mill for over 40 years, and I sincerely appreciate the support from our team during this time. We also revealed the anticipated sale of our Protective Solutions business from our All Other segment, expected to finalize in the first half of 2024. This has been a strong business for Sonoco, supported by an excellent leadership team, and we believe their expertise will continue to be valuable. As we work through our portfolio, we are committed to simplification and ensuring that the remaining businesses align well with our core operations. Secondly, we are excited to announce that Kellanova recognized us for our design, manufacturing, and commercialization of a paper bottom end for our rigid paper cans with Pringles, which aligns with sustainable and recyclable initiatives in Europe. This has been the result of a multi-year partnership, and we are pleased with the market acceptance of this innovative packaging design. We look forward to discussing this further at our Investor Day next week. In December, we announced our acquisition of Inapel, a leading flexible packaging company in Brazil, as a strategic step to increase capacity in response to the growing demand in this market, where Sonoco is now positioned as the second-largest player. We welcome the Inapel team and are confident that our shared culture, values, and technical capabilities will enhance our collaboration. Additionally, this year we have taken steps to align our flexible and thermoforming businesses into a larger, more integrated platform, and we plan to provide more details about this next week. In summary, Sonoco continues to demonstrate stable performance across our businesses. While we wish volumes were stronger, we are well-positioned to capitalize on any incremental demand increases. Please turn to slide 15 as I conclude by noting that we are looking forward to our Investor Day next week in New York on February 22. During this session, we will provide updates on our ongoing transformation, business unit plans, and insights into our long-term financial outlook. We hope to engage with you live or virtually next week, and I am happy to address any questions you may have now. I’ll hand it back to the operator.

And our first question comes from George Staphos with Bank of America Securities. Your line is open.

Hi. Thank you very much. Good morning, everyone. I appreciate the details provided. I have three questions. First, regarding guidance, could you elaborate on what is considered for price and cost for the year, knowing there are no guarantees? Additionally, how much of the increases in URB and converted products within industrial are included in that guidance? Also, what impact does the divestiture of Protective Solutions in All Other have on your guidance? Finally, Howard, although I know you'll elaborate on this next week, can you explain the integration of flexibles with thermoforming, considering they are both plastic-based but involve different business processes? What productivity expectations should we have from that integration and in general for the year? Thank you.

Right. Thanks, George. I'll turn over the more financial related items to Rob. Yes, we'll talk in more detail next week about the combination. And I think you'll see the rationale and why we view this as an obvious combine of the two. Just at a very high level, I can say that synergistically, it makes a lot of sense. And then if you look at the markets that we serve and the customers we share, there is more beyond that. So I'm going to leave that where it is and we'll get into that next week. Rob, do you want to talk about price cost?

Yes George. That's a good question because price cost is going to be a meaningful driver for profitability in 2024. I'd say in Q1, we're anticipating that number to be between $0.50 and $0.55 of drag. We've said previously that Industrial was going to have $35 million of price cost in Q1, and we're expecting to see that. To your point on URB and price recovery there, we have continued to see OCC increase. The Tan Bending Chip has kind of held constant. We're feeling really good about how that price is translating through the market, but that's something that actually takes a fair amount of time to really translate through to the P&L. So there's a bit of a drag there. Overall, we do think that industrial price cost will continue to be negative going into the second quarter, and we're hopeful for some opportunity in the second half of the year.

Okay. And then just – protective?

Yes. So Protective, we haven't closed the deal. We're expecting to close. We have a great counterparty there. We feel really good about that transaction on a gross basis. That divestiture would be $0.10 dilutive to EPS on a full-year basis. So we are expecting to close that by the end of Q1 and have some visibility to that, and it's not in the $525 million of guidance.

Okay. And the productivity for the year?

Productivity of the year. We had a great year this year. Obviously, we continue to invest behind that. We see. We've got a better path forward this year than we did last year, I would say. So we're expecting to have another record year.

Our next question comes from the line of Anthony Pettinari with Citi. Your line is open.

Good morning.

Good morning.

Good morning. You're anticipating consumer volume growth in the mid-single-digit to high single-digit range quarter-over-quarter in the first quarter. I'm curious if you could break that down and clarify whether it reflects typical seasonality or if there's an improvement or deterioration in end market demand or any destocking. I'd like to understand the factors driving that growth.

No, Anthony, it's Rodger. Consumer for the first quarter is basically flat year-over-year. So you've got slightly down in rigid paper containers versus a strong start last year in North America, basically flat to slightly negative flexibles. And again, as our base business, cookies, confectionery being soft, offset by some of the Brazil acquisition. Metal cans are actually projected to be up low to mid-single digits, and we started in that way. And in plastics, up slightly. So you put it all together, Anthony, it’s basically a flat volume for the first quarter. For the year, we do see that low single-digit growth for the year. And that's just recovery in some of our base business with some share that we've gained in flexibles, some new products in flexibles, and a good result. We're very hopeful on this combination between flexibles and thermoforming. So first quarter flat, mid-single digits for the year with some recovery in our base business.

Yeah. And I said we're also cautiously optimistic as we see our customers starting to market more; you're seeing more discounting actions. So the expectation is that through the course of the year, we'll start seeing some improvements as Rodger just said.

Okay. That's very helpful. And then in Metal Pack, I'm sorry if I missed this, but would you expect full year volumes to be flattish or maybe slightly up or slightly down? And then I'm just curious on aerosol; another packager has discussed aerosol potentially being under some pressure due to cost and ESG concerns. I'm wondering if you're seeing anything similar to that. And then just broadly if I think about the composition of Metal Pack between food cans, aerosol, and maybe closures. How that business has changed or if you've kind of shifted the mix around since you acquired it?

Yeah. No, of course, long shelf life destocking has carried a little bit further than you normally would expect against our portfolio. What we're seeing right now and we're expecting and what we're hearing from our customers and how the year started, we're actually looking at a net being up year-over-year, call it low to mid-single digits. Aerosol in particular is actually on the favorable side of that. If you look at the fourth quarter alone, year-over-year aerosols were actually up mid to low single digits and food was slightly down. So pretty pleased with what we're seeing in terms of recovery from a volume perspective with a pretty weak, very weak start to last year. But very, very understandable. Again, considering the long shelf life associated with these products. So pretty bullish about volume recoveries as we start the year as we finish out January and as we look into next year and as we finished last year in the fourth quarter.

Our next question comes from the line of Ghansham Panjabi with Baird. Your line is open.

Thanks. Good morning, everybody. I guess going back to the Industrial segment, looking at the margins in the fourth quarter. This was the first quarter of year-over-year margin decline since the first quarter 2021. Just curious to your thoughts on the evolution from here. And I know there's a lot going on with OCC and just the index-based pricing pass-through, et cetera. I would just love to hear your thoughts as it relates to 2024?

Ghansham, this is Rodger. As we examine the margins for the first quarter in the industrial segment, they appear to be relatively flat compared to the fourth quarter. As we've previously mentioned, this will have the largest negative impact on price costs, but we are also observing a recovery in our paper mill system, mainly in North America. Our global URB system operated at approximately 87% capacity in Q4, while our North American URB capacity was nearly 92% during the same period. We anticipate that this will rise to the mid-90s in Q1 due to increased demand and the adjustments we made at the Sumner mill. Therefore, while we do expect negative price cost impacts, we also foresee improved productivity through better capacity utilization, particularly in our primary URB system, which operates north of there.

And I would add that I think the acceptance of the price increase effective mid-quarter, mid-first quarter has been positive.

Yes. I think as you know we're about 60% weighted to the resin bending index about 20% related to OCC and 20% open market. So, obviously, we're going off to the open market now. But as Rob mentioned, the 60% weighted to resin bending will impact more the second quarter than the first.

Okay. That's helpful. And then back to the consumer business just volume weakness being persistent over the last several quarters. It's not just you. It's a peer group in terms of destocking, et cetera, that's impacted the supply chain. Can you just sort of characterize the competitive backdrop, as we kind of progress through this lower for longer sort of volume weakness paradigm and you have a bunch of different businesses within consumer? And I just would love to hear your thoughts as it relates to just the competitive backdrop in context of an industry that's typically very competitive anyway?

Yes, we feel very positive about our situation. From a market share perspective, I don't see any significant loss in our share. In fact, I have more instances of share gains. However, these gains aren't enough to offset the overall challenges in the consumer segment and the demand profile. When we discuss volumes, it's evident across all our businesses throughout the year. Looking at our productivity performance, we've made substantial investments in our core businesses, and we continue to see improvements in productivity. As volumes begin to recover, we expect to see enhanced leverage and normalization in our operations. I am quite optimistic about our ability to translate this into even greater productivity than what we've observed so far. Overall, I believe we are in a strong position regarding market share.

Thank you.

Our next question comes from the line of Gabe Hajde with Wells Fargo. Your line is open.

Howard, Roger, good morning. I wanted to revisit the integration that George initially asked about of flexibles with thermal forming. And just bigger, I guess, picture context around you guys, I think you've talked about trying to build a franchise position in rigid metal packaging. And curious if this move changes that perspective. You guys have talked about the sustainability attributes of origin metal packaging? And then maybe if anything changes from your perspective? And is there further risk your outlook especially in the tinplate business given the announcement this morning from Cliff to idle a facility here in North America.

Yes. We will discuss this in greater detail next week, and I believe it will become much clearer why combining these under one leadership team makes sense. We do see opportunities for acquisitions within that area of the business, but this does not detract from our other core businesses. You'll see next week that it makes solid sense. The situation in Cleveland isn't surprising regarding the mill, as it has no material impact on our supply position. That's all I can say about it. We do not see it affecting us this year or in the future, depending on how long the mill remains idle.

Okay. And then the recovery in consumer we're reading about cocoa hitting new highs in terms of commodity costs. How has the recent dialogue going with your customers in terms of expectations there? I mean we're reading articles about smaller chocolate bars and things like that. I'm just curious if that's baked into your outlook?

Yes, as I mentioned earlier, we are being quite cautious about our volume projections. Our customers are preparing to respond to the new weight loss medications, but they currently report no impact from that. It really comes down to shelf pricing. As Howard pointed out, there is significant pressure from major retailers on our customers to lower their prices. We're seeing an increase in promotions, particularly for baked goods, snacks, confections, and discretionary items, which have seen volume declines due to their price points. Our customers are indicating they will be more aggressive with promotions to recover some of the volume lost over the past year. We are relying on this recovery, as well as the excellent efforts from our team with new products, such as the paper bottom for the Pringles can and the global expansion of those packages. This gives us more confidence in our recovery of consumer volumes as the year progresses.

Okay. Thank you. And one last one, I apologize just for posterity sake. The divestiture that you all announced if I heard you correctly assuming it closes at the end of Q1. It's maybe a $0.07 $0.08 drag to the midpoint of your guidance. Is that what I'm hearing? And then on URB and downstream-related products price increases, are you assuming or embedding in your outlook today that the 20% of the open market, there's price realization there and then we'll wait to see this Friday what's recognized by RISI, maybe specifically what's embedded in the Q1 outlook or H1 outlook? Thank you.

Yes, we expect the sale of Protective Solutions to close at the end of Q1. If it does, it will have a $0.07 impact on our projected earnings for the year. For industrial pricing, we are seeing positive results from that area. The trade market sales, as mentioned by Howard and Rodger, are performing well. This is part of our current guidance.

And our next question comes from Mark Weintraub with Seaport Research Partners. Your line is open.

Maybe to start with some housekeeping. What did the metal embedder for 2024?

We lost you for a second there Mark, but I'm assuming you're asking about metal price overlap. For the year, it will be slightly less than what it was last year. So, it's actually a slight positive on a year-over-year basis. In Q1, because of the timing, it's going to be net neutral.

Okay. Great. Hopefully you can hear me now. What did it end up being in 2023?

Yes. So last year, it was $41 million negative. This year, we anticipate just the Q1 component of that to repeat.

Okay. And can you quantify that for us?

Sure. It was between $20 million and $25 million.

Okay. Super. And then on URB, I think you mentioned that you expect to be in the mid-90s post the actions you've been taking in North America and demand getting a little bit better. Where are you now in terms of integration in URB in North America? Maybe we start with that?

Are you talking about integrated? Yes, integrated volume, we're at about 55%, 56% integrated volume now, Mark, with the RTS acquisition.

I am showing no further questions at this time. I would now like to turn the conference back to Lisa Weeks for closing remarks.

Thank you all for joining us today. If you have any follow-ups, we'll be around after the call to answer your questions or contact me to schedule a follow-up. As Howard stated, we look forward to hosting you at our Investor and Analyst Day in New York next week on February 22. This will be an in-person event and a webcast will also be available. Registration details are on our website. We also look forward to seeing you on the road at our planned conferences and events in the coming months, and we'll talk to you again in May when we report our first quarter results. Thanks to everyone and have a great day.

And this concludes today's conference call. Thank you all for participating. You may now disconnect.