SONOCO PRODUCTS CO — Call Transcript 2026

Thank you for standing by, and welcome to the Sonoco first quarter 2026 earnings conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you'd like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, again, press star one. Thank you. I'd now like to turn the call over to Roger Schrum, Head of Investor Relations and Global Marketing Communications. You may begin. Thank you, Rob, and good morning, everyone. Last evening, we issued a news release and posted an investor presentation that reviews Sonoco's first quarter 2026 financial results. Both are posted on the investor relations section of our website at sonoco.com. A replay of today's conference call will be available on our website later today, and we'll post a transcript later this week. If you would turn to Slide 2, I would remind you that 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. 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. Joining me today are Howard Coker, President and CEO, and Paul Joachimczyk, Chief Financial Officer. For today's call, we will provide prepared remarks followed by your questions. If you'll turn to Slide 4 in our presentation, I'll now turn the call over to Howard. Thanks, Roger, and good morning, everyone. During our February Investor Day, we set out the framework for our focus strategy over the next three years, which is linked to our three priorities of sustainable growth, margin improvement, driven by our Profitability Performance Plan and efficient capital allocation, which is focused on investing in ourselves, debt reduction, and returning value to our shareholders. We made strides in each of these priorities in the first quarter while achieving a solid start to the year despite some significant headwinds. Paul will go through the numbers in more detail, but as shown on Slide 5, our adjusted earnings for the first quarter of $1.20 met our and consensus estimates. This performance was primarily driven by strong productivity savings, favorable price cost environment, and a successful start to our Profitability Performance Plan despite lower volume mix. I was really proud of our team's performance in the first quarter, despite severe winter weather, which temporarily closed some of our customers and our operations, a fire that destroyed our recycling facility in Greenville, South Carolina, and the effects of rapidly changing macroeconomic conditions stemming from the Middle East conflict. Our Consumer Packaging segment exceeded our expectations during the quarter. Our Industrial Paper Packaging segment managed well through both operational and demand challenges. As I mentioned, severe winter weather disrupted several of our U.S. operations in late January, as well as some of our large consumer customers who faced power outages, some lasting over a week. February was a much better month from a volume perspective, but with the onset of the Middle East conflict, we began experiencing rapid input cost inflation in March, and as I mentioned, an unfortunate fire in our Greenville facility on March 24th. Thankfully, no one was hurt, but it did lead to a one-time cost of $2 million within the quarter. As you would expect, we're not standing still in the face of these macroeconomic challenges. If you turn to Slide 6, I'll talk further about the steps we're taking to mitigate rising costs and ensure supply for our customers in this challenging inflationary environment. Energy and freight and other petrochemical-related input costs, such as resins, coatings, and other chemicals, represent approximately 10% of our annual sales, while the impact on the first quarter was under a few million dollars. Based on current estimates, we believe this inflation could add between $8 million-$10 million in additional costs in the second quarter. We are leveraging our global sourcing and supply assurance team to do all we can to help offset these rising costs. That said, we must recover this inflation and have implemented a number of necessary price increases, including a $70 per ton uncoated recycled paperboard increase in the U.S. and an EUR 80 per ton increase in Europe, along with other pricing actions. These actions are showing traction in the market. Fastmarkets reported last Friday an initial $60 per ton increase in U.S. URB prices. Given our current backlogs and solid mill utilization rates entering April, we feel confident about the sustainability of our actions. As shown on Slide 7, we have purposefully shifted our mix to more resilient consumer-focused businesses, where today two-thirds of our sales are generated by our leadership positions in paper and metal cans. We're focused on affordable, center-of-the-store, staple food categories, which have historically remained resilient during periods of economic stress. I'm happy that our recent portfolio work has substantially reduced our exposure to resin-based packaging. In 2023, we used approximately GBP 240 million of petroleum-based resins, while today, we use only about GBP 75 million, primarily in our industrial plastics business and our plastic cartridges for adhesives and sealants, where we do have recovery mechanisms in place. As it relates to our growth pillar, we recently opened a new paper can plant in Nong Yai, Thailand. As shown on Slide 8, Paul and I had the opportunity to participate in the grand opening with our team in Asia in March. This highly automated operation is expected to annually produce approximately 200 million units for the growing stacked chip markets in Asia, and is one of the reasons we saw a 6% lift in paper can volume in the region in the first quarter. This plant was built to accommodate future capacity expansion, and we believe it could eventually become one of the largest global paper can operations over the next several years. In our industrial business, we are investing $20 million to add a new automated nailed wood reel production line at our Hartselle, Alabama facility. As shown on Slide 9, when this new line opens at the end of the second quarter, we expect it will increase our capacity by 15%, enable us to meet the needs of the fast-growing wire and cable industry, as it supplies the booming power infrastructure demand for AI center growth. I'll add that sales in our reels business were up 13% in the quarter. In addition to funding our growth, our disciplined capital allocation strategy remains focused on reducing debt and returning capital to shareholders. As shown on Slide 10, last week, our board of directors authorized the 43rd consecutive annual increase of dividends to shareholders, raising the payout to $2.16 per share, which provides an annual yield of about 3.8%. Sonoco is one of only a few public companies that has paid dividends consecutively for more than 100 years. In summary, we had a good start to the year despite challenges, and we remain confident in our portfolio, our strategy, and ability to execute through economic cycles. With that, I'll turn it over to Paul. Thank you, Howard. I'll walk you through our first quarter financial performance starting on Slide 11. With our portfolio transformation complete, we're entering the next phase defined by sustainable growth, margin improvement driven by our Profitability Performance Plan, and efficient capital allocation, which is focused on investing in ourselves, debt reduction, and returning value to our shareholders. Today, I'll cover our first quarter results and our early progress against the Profitability Performance Plan we laid out at Investor Day in February. Before I review the quarter, a quick note on comparability and some nuances related to the accounting treatment for our divestitures in 2025. TFP was divested on April 1st, 2025, and is reported as discontinued operations in last year's first quarter. ThermoSafe was divested on November 3rd, 2025, and was included in continuing operations in that same period. In 2026, neither TFP nor ThermoSafe is part of continuing operations. As a result, all year-over-year comparisons I discuss for continuing operations with ThermoSafe included in the 2025 figures, and I'll highlight the differences where applicable. Net sales from continuing operations were $1.7 billion, down 2% year over year. Results reflect lower than expected volumes, weather impacts, as well as macroeconomic and geopolitical pressures weighed on both our supply chain and our customers. Those headwinds were partially offset by pricing actions and a foreign currency benefit, primarily from the euro. Also in the year-over-year comparison is ThermoSafe, which contributed $55 million of sales in the first quarter of 2025. Excluding ThermoSafe, our sales increased by approximately 1% versus the prior year. Adjusted EBITDA was $277 million, down 4% year over year, and margin was down approximately 35 basis points. The decline was driven by lower volumes and the absence of operating profit from the divested ThermoSafe business. These impacts were partially offset by productivity initiatives, strong pricing realizations, early savings from our multiyear profitability programs, and favorable foreign exchange rates. Excluding ThermoSafe, Adjusted EBITDA would have been flat, reflecting strong cost containment from our profitability programs despite softer volumes. Overall, we're encouraged by how our continuing operations performed following last year's reorganization. On a consistent comparison basis, our key metrics are up year-over-year, reinforcing that we're building a more agile and resilient organization to navigate challenges as they arise. Now moving to Slide 12. Adjusted EBITDA for the quarter was $1.20, flat year-over-year. After excluding the impact of discontinued operations. The year-over-year results reflect the balance of a softer volume and the impact of divestitures offset by productivity gains, pricing, early profitability savings from our three-year program, a lower effective tax rate, and a favorable foreign currency. If we go a little deeper into the bridge here, I'd like to walk you through the components of each bar. We'll start with the discontinued operations adjustment, which is a net impact of $0.18, led by the TFP divestiture, partially offset by interest. The divestiture of ThermoSafe represents a $0.07 decrease. Operational changes are down $0.08 due to the pressures on the top line due to the macroeconomic and geopolitical factors within the quarter, partially offset by operational productivity. Non-operational changes are up $0.09, led by FX, especially the euro, reduction of our debt, and tax benefits, which helped to offset several headwinds the business faced within the quarter. Profitability Performance drove $0.06 of improvement. I want to underscore the importance of what we're doing to drive margins for the rest of the year by controlling the controllables. We're maintaining pricing discipline, accelerating productivity, advancing our Profitability Performance Plan, and tightly managing both our costs and our capital. While the macro environment remains uncertain, we remain committed to executing the long-term financial targets we shared at Investor Day. Turning to cash flow on Slide 13. Operating cash flow in the first quarter was a use of $368 million, consistent with normal seasonal patterns as we build inventories ahead of the canning season. Gross capital investment was $62 million, below our expectations. Given the current macro environment, we are actively monitoring capital spending to stay disciplined and meet our targets. The year-over-year decline in cash flows was primarily driven by approximately $140 million of higher tax payments. That includes $103 million related to capital gains from prior period divestitures, which will not repeat. As discussed at Investor Day, we have a clear and disciplined approach to capital allocation that includes prioritizing high return projects, continuing to optimize working capital, especially inventory and payables, and preserving balance sheet flexibility by paying down debt while still supporting the long-term growth initiatives. Turning to Slide 14. Before I go deeper into the segment results, I want to share a brief disclosure related to our Consumer segment and a footnote we've included for this discussion. In first quarter of 2025, Consumer segment Adjusted EBITDA did not include $18 million of unallocated corporate costs. You can find these details in the earnings release table on page 20 of our press release dated April 21st, 2026. Now let's turn our attention to the two segments and overall results. Starting with Consumer. Sales increased 3% year-over-year to $1.1 billion, driven by pricing and favorable foreign currency exchange rates, partially offset by volume and mix softness related to the macroeconomic conditions. Adjusted EBITDA from continuing operations declined 7%, reflecting lower volumes, partially offset by productivity initiatives, pricing actions, and early transformation savings. Adjusting for the 2025 unallocated corporate costs I just described, Consumer Adjusted EBITDA would've been up with margins flat. In Consumer, the team remains focused on price realization and mix discipline across key geographies while driving manufacturing and supply chain productivity. They are also leveraging accelerated transformation savings to improve their margins. Let's move on to our Industrial segment. Sales were $579 million, down year-over-year by 1%, driven by softer volumes, partially offset by favorable pricing and index-based resets with foreign currency benefits. Adjusted EBITDA declined by $7 million to $100 million, a 7% decrease as lower volumes were partially mitigated by pricing resets and productivity improvements. EBITDA margin was lower year-over-year due to unfavorable volume and mix, along with losses attributed to a fire at a recycling facility in Greenville, South Carolina. The industrial segment is focused fully on capturing index-based pricing resets as they flow through, executing against cost and productivity initiatives already underway, and preserving margin discipline while managing demand variability. We've seen good progress throughout the current month, which supports our confidence as we move into the second quarter. Turning to Slide 15. We are pleased with the early progress of our three-year Profitability Performance Plan outlined at Investor Day. In the first quarter, we delivered $8 million of savings, progressing towards our $150 million-$200 million target. These savings were primarily driven by structural transformation initiatives, which contributed $6 million along with $2 million from commercial excellence and operational improvement efforts. Importantly, these savings are already flowing through the P&L, reinforcing our confidence in the program's execution and durability. As they annualize, they represent approximately $32 million of recurring savings. Turning to guidance on Slide 16. We are maintaining our full year outlook while recognizing that continued macroeconomic and geopolitical uncertainty, particularly late in our quarter, creates a dynamic operating environment. We will continue to monitor inflation and demand trends closely. With that, let me walk you through our full year expectations. For the full year, we expect sales of $7.25 billion-$7.75 billion, Adjusted EBITDA of $1.25 billion-$1.35 billion, Adjusted EBITDA of $5.80-$6.20, with results expected to trend towards the lower end of the range. While we are maintaining our Adjusted EBITDA outlook, EPS will not track EBITDA one for one because of the tighter EPS range of only $0.40. In the current environment, inflationary cost pressures and macro volatility will create a larger impact on EPS rather than EBITDA. Operating cash flow of $700-$800 million, inclusive of the $103 million of tax payments related to 2025 divestitures, which were paid in the first quarter. For the remainder of 2026, our mandate is clear. Deliver on our three-year strategy of focus by executing the Profitability Performance Plan, which is delivering $32 million of annualized savings in 2026. We have to offset volume pressures that we experienced in early 2026, and we are protecting our margins through disciplined pricing and productivity, strengthening our cash flow through working capital and disciplined capital spending. We are more focused and have stronger execution levers than in recent years, building a higher quality earnings base and strengthening cash generation, even in a challenging demand environment. Let me turn the call back over to Howard for some closing comments. Thanks, Paul. Let me close by, again, thanking our global team for successfully guiding us through these uncertain times during the first part of the year. The year started out fairly strong, but we were affected by winter weather in the Americas, losing two weeks of production from two of our major consumer customers in the Tennessee region. We also had mill and converting downtime at our mills and our customers throughout the region. We lost a facility to fire and other relatively one-off type issues, and of course, the impact of the Middle East conflict. In spite of these, we stayed focused on controls and long-term productivity to deliver well within our expectations. I think it's also important to note while uncertainty remains, there is concern how the rest of the year will unfold. However, April has shown thus far some encouraging signs. As we enter the pack season, consumer EMEA is seeing early positive signs in the south. The tuna pack has been strong, and while we have not built expectation for a rebound in sardines, this market too is showing some promise for improvement. Salted snack volumes are increasing, which is typical in a World Cup year. We've seen necessary index-based price in North America in our industrial business, which will drive full benefit during Q3 with incremental help in Q2, and early but reasonable expectations for URB and converted products and announced prices in Europe. Our focus on our drive for $150 million-$200 million over the next three years is on pace and will only build as we go deeper into the year. The reality is we are in uncertain times. Things are changing on a daily basis. We do have some catch up to deal with from the quick hit of inflation as we entered into Q2, and thus the cautionary tone in our EPS forecast. Let me close by saying how pleased I am we have made, over the past several years, the changes you all have seen. If we had not made the portfolio shift, we'd be living in a vastly different world. Without our simplification efforts, we would not be driving the level of SG&A and other savings noted today. We would be facing serious supply chain issues and a much larger degree of inflation impact and volume pressures. Again, thanks to our team as we continue to drive through this difficult operating environment, and certainly looking forward to any questions that you may have. I'll turn it back over to the operator. Thank you. We will now begin the question and answer session. If you would like to ask a question, please press star one on your telephone keypad. If you would like to withdraw your question, simply press star one again. Your first question today comes from the line of George Staphos from Bank of America Securities. Your line is open. Hi, everyone. Good morning. Thanks for the presentation. I guess I had three questions. I'll ask them in sequence and turn it over. Howard, first of all, Paul, could you discuss what the effect of the storms was in the first quarter from a percentage of volume standpoint? In other words, if you did not have the storms, what would volumes have been? And what kind of early run rate are you seeing on volumes in consumer and in industrial for the second quarter? Second point, we appreciate you calling out the inflation effect so far of $8-$10 million in 2Q. Is that a sequential impact from 1Q or year-on-year? And if costs stay where they're at right now, would that be the effect in 3Q or would it be a lesser effect? The last question I had for you is can you talk to us about how you feel on your metal supply chain, both aluminum and steel? Are there any flashpoints we need to watch out against relative to the street or do you feel like you're pretty well situated as far as you can see for the rest of the year? Thank you. Thanks, George. I'm going to let Paul cover. I don't have the direct, and I don't know if Paul does either, the full numbers in terms of the impact of the storm. What I would say on the metal side, which I will handle, is we have no issues, no concerns, not only in terms of supply chain, but we have fixed pricing through the year. Obviously, we've seen tariffs and other things that can impact, but based off of where we sit today, we're in good shape. George, on the first question that you had around the storm effect, we did experience more declines in our consumer business in the Americas, primarily due to the weather that was out there with some of our CPGs being down, two of our largest customers being down for over a week. That did create, I'll call it, a larger impact disproportionately than our international businesses that are out there. I'll say the early run rates, though, that we're seeing is we're seeing some recovery back in the business, more so in our industrial businesses. We're seeing strengthening in those markets as mills are getting closer back to the 90% effective rates, run rates that are there. We're seeing some lift back in our consumer businesses, but still more focused in on the international side. The Americas are still lagging behind. It did impact the volume pressures there for sure. Moving on to your second Hey, Paul, let me just back you up there. Oh, yeah. Just so I know it's early, but what kind of volume are you seeing up/down? Can you put a percentage on it in your key consumer or industrial categories? Yeah, I would say internationally, say low single digits that were up there. Industrial in the same ballpark, too. As you know, March was impacted primarily because of all the uncertainties that are out there. We're starting to see the recovery of those flows coming in early part of the month. I'll say it's right now, if that trend continues, it'll be a nice quarter for us in Q2. Okay. If I move on to your second question around the inflation impact, the $8 million-$10 million is what we have line of sight to for Q2. With our recovery mechanisms that we have in place, there is a little bit of a lag. I'd say right now our exposure for Q2 is the $8 million-$10 million. Obviously, if there's more macroeconomic effects, if there's something that happens with pricing pressures on our input costs, those could change to be greater in Q3 and Q4. We do think our recovery mechanisms will help cover and offset those in those future quarters that are there, we don't have full line of sight to what's going to happen in the macro world that's out there. Today we feel confident in our exposure for what Q2 is going to bear. Say, if everything holds steady, those would not recur, and we could recover that by Q3 and Q4. Thank you very much. Mm-hmm. Your next question comes from the line of John Dunigan from Jefferies. Your line is open. Thank you, Howard. Thank you, Paul. Really appreciate all the details. I wanted to start back on the cost inflation with the $8 million-$10 million. Can you walk us through some of those key buckets and, in particular, nat gas, electricity across U.S. and Europe, and how much of that you have hedged across your businesses? If we're thinking about the freight surcharges that you called out, is there any kind of lag to putting those through contractually? Maybe you can help us quantify how much of your contracts currently have those freight surcharge mechanisms contained in them. Thanks. Yeah, John, I'll take the first part of that. The cost inflation, the breakdown of it, you go through your freight as your primary driver of that. That was the one that we experienced almost immediately. You saw rising fuel prices, primarily in the diesel aspect, come through. We do have recovery places and mechanisms out there. There is a lag related to those, call it roughly three weeks, four weeks of a time period that's out there to get that recovery back. You're exposed, let's just say a month to be simplistic out there. As far as all the other inputs that are out there, whether it's the resins, the energy and things like that, I'd say we do have some coverage on our hedging. We haven't gone out with exactly what that coverage is from a hedging. The eight to nine is inclusive. It's net of that. That is an impact of us from already factoring into what we already have hedged and placed into programs. That's the impact that we'll experience in our P&L. Freight is primarily the largest impact for us. Great. That's very helpful. Just on my follow-up, I just wanted to jump over to the cost savings. You called out the $8 million from the initiatives towards the $150-$200, but productivity in the quarter was pretty impressive. It was up $33 million year-over-year. Can you just walk us through the difference between those two figures and how we should think of the cadence through the rest of the year? That'd be helpful. Yeah. John, that's a great question. Really what we're trying to do is we're trying to delineate productivity, which really is covering our inflationary impacts, things of that nature versus the Profitability Performance Plan. The Profitability Performance Plan, as we think about it, this is costs that are going to fall right to the bottom line, and they're going to be there every quarter on a go-forward basis. That's why we did the delineation this quarter more so, and we'll continue that going forward. We want to assure you that what we are delivering in those savings and that program of the $150 million-$200 million, that is something that you can bank on for us that's going to be there quarter, after quarter, after quarter, and it's going to be recurring. Got it. Thank you very much, Paul. Mm-hmm. Your next question comes from a line of Michael Roxland from Truist Securities. Your line is open. Hi, guys. Thanks for taking my questions. This is Nico Buccioni on for Mike Roxland. Just to clarify on the inflationary impacts, does your current guide assume that $8-$10 million is the limit of the impact, or do you assume current conditions basically persist through the rest of the year rather than kind of improve? Secondly, what do you think of your customers' and consumers' ability is to absorb price? How much do you think you can push before demand destruction might occur? Yeah, I would say that's what we have visibility of at this point in time. I went to extra effort to point out that with the new portfolio, particularly, our key raw materials being steel on the consumer side, they're basically flat, contractually protected through the year. We do have the resin exposure I spoke to in my opening comments. That too has recovery mechanisms in it, and it varies from within the month to within the quarter. Will we see more? It's hard to say. Depends on what happened while we were talking during this call. Virtually just seems to be changing on an immediate basis. The point here is that, from a key raw materials perspective, we feel really good in terms of the position that we're in at this point in time. The customer impact, it's hard to say. Being in staple food, all I can say is what we've seen historically. When, obviously the inflation being felt at retail is also showing up in QSR and other outlets as well. When wallets get tight, we historically have seen in our consumer business that volumes are not affected and in fact, in some cases, have improved as people shop in the grocery store, cook at home as opposed to going out. Hard to predict how that's going to go. Certainly would think that, while we're talking about the packaging side of things, that there's pressures on all raw materials associated with all food items. Really on all items going forward, and ultimately we'll see how that fares through the consumer. Got it. Understood. Just quick follow-up. I think you mentioned a little softer URB volumes in 1Q, but a pickup more recently in April. What do you attribute that pickup to, and can you share where backlogs stand right now? Yeah, we don't really track backlogs in URB, but what we're seeing is that Paul had noted roughly a 90%-91% operating rate here, which is our largest market in URB in North America. Frankly, there's a couple of things going on. The main is that we talked in Investor Day about new products and new markets that we're entering with URB that traditionally have been served by other grades of paper, some of which has been taken out of the market, the mill closures. We've been successful in converting saturating kraft. We've got our first customer and a line of customers in the funnel right now. That is really helping us to, as we look out into the quarter, go from the low 90s, well, still low 90s, but from 90 to 92-93 type operating rates as that volume starts flowing through the mill network. Got it. Thank you very much. I'll turn it over. Thanks. Your next question comes from the line of Hillary Cacanando from Deutsche Bank. Your line is open. Hi. Thank you for taking my question. Just regarding the softer volumes and inflationary pressures in the first quarter, could you just elaborate on which specific end markets or geographies underperformed expectations or outperformed expectations? Most notably, I know you talked a little bit about tuna pack and sardines, but if you could give a little more detail on other end markets. Yeah. What I'd say, I'm really just talking the geography. If you go around the world, Paul already noted that consumer EMEA was a very low, well, low single digits off from a volume year over year. It was a bigger impact here in North America, and I don't think I want to get in, just from a confidentiality with customers, but our two largest customers on our paper can business lost seven, eight days during the winter storm. Now, we talked about that in February, and what would typically happen is we'd see them rush to make up that time, and enough time would be held in the quarter. Of course, five, seven days after our Investor Day, you wake up and find out on February 27th we bombed Iran. We think they took the opportunity to bring inventories down, and we're starting to see now a bit of a pickup, and the expectation is the magnitude of what we saw in the first quarter will not repeat itself. In fact, they should be looking to make some of that up through the year. Got it. Great. Thank you. Just to follow up, as we're three weeks into the second quarter, I know you said April picked up, but are you seeing any real discernible change in customer ordering patterns or conversations? Has anything really changed? I know you're forecasting weaker volumes, but just wanted to see if any discernible change in patterns. Yeah, Hillary, this is Paul. Really no discernible patterns that are out there. We're seeing a slight uptick in the volume that's given us a little bit more confidence in our guide that's out there, but really nothing that I'd say you could lead anything to other than just a recovery from Q1. Got it. Great. Thank you very much. Your next question comes from the line of Anthony Pettinari from Citi. Your line is open. Good morning. Thanks for taking the question. This is actually Bryan Burgmeier on for Anthony. Maybe just focusing on consumer a little bit, volumes were down against a pretty tough comp from last year. Do you think we start to see some improvement in year-on-year volume growth, in 2Q and as we start to get into the back half, maybe from easy comps or ramping investments? Just any detail on maybe how that volume trend could develop in 2026 and consumer. Thanks. Yeah. It's pretty hard to really nail it with the amount of uncertainty we have out there. What I would say is probably on our aerosol business here in North America, pretty tough comps coming up here in the summertime and somewhat of a discretionary spend you can do without. On the other side of that would be reflective of a consumer that more of an economic downturn situation. You could see that being a tougher comp. At the same time, as I said earlier, you would expect that the food side of the business, the center of the store, the drive to the supermarket as conditions toughen, that it would balance that, if not actually exceed that. Tough to say. I mentioned earlier in Europe, the World Cup, that's kind of a normal thing for us to see that volumes start to pick up around that particular event. Kind of a wait and see. I don't know if the consumer has fully felt it to the point. It does appear we're heading in that direction. That could be favorable, frankly, for the most part of the consumer side of the business. Got it. Thanks for that detail. Maybe just on working capital, I'm not sure if there's any maybe sensitivity to raw material inputs that we should be mindful of just as the year goes on, trying to be mindful of higher metal prices and pet chems. Not sure if like an earnings sensitivity or just any detail you would want to put on maybe working capital or free cash flow as we think about higher metal. Thank you. I'll turn it over. Yeah. Really from a working capital perspective, no real concerns there. I'd say one thing to highlight, though. We are being very disciplined about our spend on capital for the remainder of the year. We want to make sure that we're hitting our guide and our targets that we've committed to the Street. There will be some products that we'll postpone, but we're not cutting back any of our growth or our value-adding capital products that are out there. We feel really confident that with our supply chain team and our efforts that they've done to secure a really strong supply chain, both around metal packaging and all the other inputs that are there. Really no concerns from this perspective right now. That's with our current environment, as we said. Your next question comes from a line of Ghansham Panjabi from Baird. Your line is open. Thank you. Good morning. Just kind of picking up on some of the last few questions. Obviously 1Q was impacted from a volume standpoint for all the reasons you kind of went through. 2Q, you gave some parameters as it relates to raw material cost inflation, et cetera, and we know what your full year guidance is. Specific to 2Q, do you expect earnings to grow year-over-year, or will it be comparable to sort of 1Q, just given what you called out as it relates to the price cost headwinds? Yeah, Ghansham, we do expect earnings to grow in Q2. I will say, though, there is that inflationary impact for the raw materials that we talked about with freight and everything else that's there. That'll create a little bit of a margin drag for us and some of the pressures that are there, but we definitely expect earnings to grow. On a year-over-year basis, just to clarify. Yes. Okay. Thank you for that. Yeah. No, Ghansham, I do want to reiterate that. I know we talked about it over and over, but in the soft volume environment, the team really did deliver on the bottom line expectations for the most part, and that is not changing as we see seasonal volumes increase in terms of the levels of productivity and savings and the programs that we've got in place. I just want to say again, hats off to our team in a soft volume environment, still being able to drop down within our expectations. Yeah, for sure. A lot going on. As it relates to the volume impact of this particular inflation cycle, and obviously customers know that price increases are coming and so on and so forth, have you seen any sort of pre-ordering or just some sort of order pattern distortions that may be amplifying some of the volume that you're seeing early part of 2Q in terms of the recovery you called out? No. In fact, it's again, based off the portfolio, the type of inflation that we're seeing is not really about product inflation, it's how we deliver. It's freight, obviously some energy, but not your typical, "Hey, you've got a 5%-10% price increase coming." In the next quarter, I need to load it up. No. Okay. You haven't seen any change in the macro backdrop, just broadly speaking, for your industrial business either, right? No. In fact, a little bit of concern about, yes, we had the weather impacts in the first quarter, but we've seen some green shoots here. A lot of it is self-help, entering new markets that we've never participated in before. As I mentioned earlier with saturating kraft using the, I guess, the furniture industry. Right now, you got to put that into the model to say, "Hey, we've got new business coming on that we never participated in before." Our operating rates, as I said, we've said a couple of times, are in pretty good shape. Ghansham Panjabi, we have a reels business too that is doing really well in performance for us in Q1, and we expect that to continue into Q2 as well. Okay. Perfect. Thank you so much. Mm-hmm. Your next question comes from the line of Anojja Shah from UBS. Your line is open. Hi, everyone. Good morning. Morning. Hi. Sorry. First, I just want to confirm, that $8 million-$10 million of inflation that you call out in 2Q, based on the lags in your pass-through, you're confident that should get recovered in the second half? Yes. It would get recovered. Okay. Assuming, though, and if there is additional inflation, then it's about a quarter lag, you said. Is that right? Correct. Yep. Okay. Perfect. Also, you announced a new term loan at the end of March, and in the bridges you gave last quarter, you had a $0.20-$0.40 non-operational contribution on EPS. Is the interest on that new term loan sort of a headwind to that $0.20-$0.40, and is that part of why the EPS guidance is now on the lower end? How is that filtering through your 2024 guidance? Yeah. The term loan that we announced is really, it's a delayed draw term loan to effectively retire our loan that would be due in September later this year. It's not a significant impact to our EPS range that's out there. It's more of these inflationary impacts in the short term that is driving our EPS down more than anything else. Okay. Because of the tight range on EPS, that's why it's impacting EPS and not as much on the top- You got it. Is that correct? Okay, great. Then- Yeah. If you think about the EBIT. Oh, go ahead. Go ahead. I was going to say, for the EBIT range, if you think about it's really $100 million that's out there. If you take the taxes out of that, it really becomes $133 million range, and your EPS is only $0.40. The two are disaggregated and disproportionate, almost a 3-to-1 ratio. It's your EBIT impacts. You can have a $10 million impact in your EBIT, but it'll drive a much larger impact on your EPS change that's out there. Right. Got it. Finally, how are you feeling about your geographic footprint now with your current split between U.S. and Europe? I only ask because some of your peers are reconsidering the benefits that they thought they would get by adding on a European business, and they're sort of saying that the large global customers tend to source more regionally. Do you believe that your global platform gives you significant economies of scale that maybe outweigh some of the complexity drawbacks? Yeah. We do. Certainly, economies of scale. We like the way we're situated right now. We're over half North America. I think it's about 40% in total company, both consumer and industrial, in Europe. We've seen that flip back and forth over the last decade or so, more in favor, stronger in favor of North America. It just depends on the market, the opportunity. It's not a conscious type situation. We're happy with the portfolio. We're happy with the geographies that we participate in. Southeast Asia, particularly on the consumer side, is becoming even more material. Frankly, as we noted earlier, continues to grow at a nice pace. We are where we are today, and we do not plan on any future portfolio or inorganic moves, but it wouldn't surprise me if we weren't talking years down the road and there's a different ratio there. All right. Thank you very much. I'll turn it over. Your next question comes from the line of Mark Weintraub from Seaport Research Partners. Your line is open. Great. Thank you. I got disconnected, so apologies if there's any repetition in the question here. was hoping to focus a little bit more on the volume side. Two things. One, maybe a little bit more color possible on some of the growth, on some of the potential business wins and some of the expansions. If you could perhaps scale the size of opportunity and what you've seen so far. for instance, with the new paper can facility in Thailand, how much revenue or opportunity might that provide? Then in Europe, you had been talking about at one point the possibility of converting some customers who were doing their own canning. If there's any update there on progress there. You mentioned on the saturating kraft, that was helpful. Thank you Just on the flip side of it, where volume has been disappointing, and certainly there's the macroeconomic, there's the weather, et cetera, et cetera, but there's also the kind of the GLP-1 issue, and hopefully it's not as big a deal for you as for some others. Maybe just update us on your thoughts relative to that. Yeah, Mark, a good question. Unless Paul has it, I do not have a total off the top of my head. We're not going to give out specific plant level type details. I can't really answer that question. What you did answer in your own question was where are we seeing opportunities? Certainly Thailand is reportedly going to be possibly even the third largest paper can plant that we operate globally. It's in its infancy in terms of, and we're doing about somewhere around 200 million units right now during its startup phase. Saturating kraft is really turning out to be quite an interesting market. We're in with our first customer. I could keep going in terms of investments that we've made across the portfolio. Let's put that down as a homework assignment to aggregate that for you and the rest of the group. No, we're not going to talk about one individual opportunity, but I think it's a fair question from an aggregate perspective. You're right on the GLP side, we feel better about our situation today. If you go back just over a year ago, it just feels good not to be in the type of markets, confectionery, cookies, crackers, and things like that we weren't pretty heavy in. The portfolio shift, I think is more favorable in this context. I would say, but yes, we do participate with salted snacks. What we're seeing there, as we just spoke to in a bit, was that growth seems to be, it is really materializing internationally, where the GLPs are just not at the same level as they are here in the United States, particularly in Southeast Asia. Eastern Europe, and even South America, where we've got expansions going on. We feel much better about our situation today from a portfolio perspective to drive through where GLPs will finally settle out at. Yeah. Mark, just to give you a little bit more context on the Thailand plant and referring back to a comment that Howard made in his opening statement, too, is that plant will lead to 200 million units on an annual basis for us, and it did contribute a 6% lift in our paper can volume in that region. It is going to be a significant asset for us and contribution to our overall growth and the strategy for that region. With the reminder, that's the startup phase of the plant. You got it. Right. The point being, it's a startup, A, there's more to come, B, are there also extra costs that you incur during the startup phase that presumably fade away? Yeah. Always when you're starting a new operation, yes, you've got a ramp-up curve. I'll tell you though, we have a heck of a good team. We do a lot of cans in Southeast Asia, and you never have a vertical, but you're right. We did see some costs, including a grand opening you saw the picture in the slides, was well done by the team. Great. Maybe this is getting a little too detailed, and if so, either take it offline or whatever, but is it possible sort of to walk us up a little bit, to the $8 million-$10 million? If we annualize it, $32 million-$40 million. You've got $7.5 billion of sales. We're talking about 4%-5%, 40-50 basis points of increase, which seems kind of low if freight and those other variables are about, I think you had said about 10% of revenue. It would seem like not too big an increase. I don't know if you can quickly, easily walk us up sort of the big drivers, basically how much is freight up on a percentage basis. If that's the biggest driver. Yeah. Mark, probably when you were disconnected, we did cover this, but freight is the largest component of that, and really where the, I'll call it as a recovery to go after that is gonna be lagged and delayed. The $8 million-$10 million is net of all of our recovery efforts that are out there. Got it. I would say it does seem small, and the reason it is small is because we did put the net number out there, not a gross number. Okay. Thank you. Mm-hmm. Your next question comes from the line of Gabe Hajde from Wells Fargo Securities. Your line is open. Hey, good morning, Howard, Paul, Roger. I'm struggling a little bit with maybe just the commentary on the second quarter, and I appreciate there's a lot of uncertainty out there, but specifically even to growing earnings in Q2, are we talking in EBITDA terms or EPS? Because I think just the reduction in interest expense should get to something like $0.15 or so of EPS growth. Just a little bit of clarity there, please. Yeah. Gabe, it will be both in EBITDA and EPS. EPS does receive the benefit of the interest favorability year-over-year as well too, so that is part of it. Okay. Maybe looking backwards and thinking about even the second quarter, I know there's a lot of moving parts, and I apologize if I missed it, but. If we think about North America food, European food cans, and then I guess maybe global composite cans. You talked about, I think, Europe food being up low single digits in Q1, which would imply maybe down high single digits, 8% or so in North America food or aerosol, and then I guess composite can. Half of that was off because of weather. Just help us maybe on Q1 volume trends in the three different geographies or three different businesses as you think about it. Yeah. You're pretty close in your math in terms of low single digits in EMEA and the correlation to how that would have impact the Americas. I really don't have that full what does it mean available to us at this point. Maybe that can be a follow-up that we hit the. Okay. I guess, Paul, when I think about tax rate, you gave us 26% at the beginning of the year. Maybe interest tracking around $150 million, and D&A was a little light in Q1, $125 million. I think we were kind of thinking about $135 million or so. Is the 125 a good run rate going forward? I'm just thinking about, again, the translation between EBITDA and EPS. If I take the low end of EPS, call it 585 or so, I'm coming out to like 1,265 implied EBITDA. Anything that we should be mindful of there? No. I'd say your depreciation will probably tick up a little bit as some of our products come online later this year. You'll see a little bit of an increase. Your ranges, you're right in the same ballpark there. Okay. Last one for me, and I apologize if it's repetitive, but getting at Mark's question. Our math on transport as our paper business is about $20 a ton of inflation flowing through the system. I think you have 1 million forward tons in North America, maybe 1 million tons in Europe. That would imply, I don't know, something, $100 million just of inflation there. Maybe I'm overestimating things. Then the GBP 75 million of polyethylene or resin buy that you were talking about, I think that was on a quarterly basis. It's up 30 cents, give or take, just between April and March. That would be implied, just a lag on that would be maybe the $10 million bucks. Again, I'm having a hard time reconciling kind of and I believe you, right? $8 million-$10 million of inflation versus sort of the math that we've come up with independently. Maybe we're over- or underestimating. Yeah. Gabe, I'd say maybe hats off to our supply chain teams. They have done a phenomenal job negotiating things. We do have in our contracts, too, some delays in the way that pricing gets passed. Those surcharges and things that you're talking about for freight can hit quicker. Also, you think about how we optimize our transportation. We keep our plants close to our customer bases and things like that as well too. They've done a phenomenal job, and we feel fairly confident in our numbers around the eight to 10 as being a net number and exposure. The gross number, you're probably absolutely spot on. It's definitely in that range, but the teams have done a phenomenal job of mitigating it. Like I said, very happy with their progress that they've done. On the resin side of it's variable in terms of contracts, some of which are monthly extending out to quarterly. That's the balance there. You've got to look at the anticipation of what was coming and the inventories that we were able to build. All of the above points to exactly what Paul said. Hats off to our procurement organization and how they've managed through this. Understood. All right, guys, good luck. I know it's volatile out there. Your next question comes from a line of Matt Roberts from Raymond James. Your line is open. Thank you. Couple questions. They're all on RPC, so I'll just fire them off one by one here. First, what was RPC volume performance in 1Q? I believe that used to be in the slide deck. On April 2. Yeah. I don't have Yeah visibility of that level. Matt, when we did the reorganization to the two segments, we're really talking about consumer and total now. We're not going to break out RPC cans. We're not going to break out metal pack cans. We'll talk to any major events that happen within the quarter, but we're going to keep that at a more consumer total level. Last couple of quarters, so that'll add a couple more lines. I'm all good there. If I may, on the April promotional trends, I mean, last year, because there was a customer on hold for working capital, has there been promotional environment changes from that customer now that the deal has closed, or has there been a broader promotional environment given your customers are seeing cost inflation as well? You were kind of breaking up, Matt, but I think I understand your question. We're seeing it's slowly happening. It's one quarter post new owner of that particular brand. Seeing probably more activity on an international perspective than we have seen here in North America. Things are improving. The relationship is rock solid. Again, it does appear if you look over in Europe and Asia, that's really the starting point of focus. The expectation is then we'll start seeing more activity here in North America over time. Question. Last one, if I may, on RPC. In 2025, how big was frozen juice in that category and any material headwinds in 2026 we could call out? Thank you. Oh, concentrate. Gosh, it's been a long time since anybody asked about that. It's still in production here. It is more related to the spirit side of things and mixers. But I guess I can say it's public. Minute Maid has discontinued. Relatively immaterial to us in that the volume had reached such low levels. Just really not material at this point or prior to. Your next question comes from the line of George Staphos from Bank of America Securities. Your line is open. Hi, everybody. Some odds and ends, just finishing up here. Can you talk about or give some clarity on the size of the reels business within the portfolio? Remind us how big that might be for you. Secondly, related to some of the activity that didn't necessarily happen last year on the consumer side with some of your customers, are there any new products that are now being considered that you may actually get some business on for this year? And if you were in a position, could you size any of that for us in terms of the revenue opportunity later in the year? Lastly, Howard, kind of longer term, looking at Slide 10 where you've got the dividend, and you do have a very good track record at Sonoco over the years. Certainly that dividend has been growing more quickly than the organic volume growth rate for the company. You're obviously doing a very good job with productivity and mix and all the things that has made Sonoco successful over the years. How long do you think you can keep growing the dividend at that rate if volume isn't growing at that rate? When do you think that we will get to a positive on volume in the businesses, consumer and industrial? Is it third quarter, fourth quarter 2027? Any thoughts here would be great. Thank you, guys. Good luck in the quarter. Sure. George, yes, there's more than a few new products that'll be launched through the second half of the year. I can't tell you what the success rate's going to be and what type of volumes that's ultimately going to materialize in. Pretty excited about some of what we see in the funnel. It's here in North America. It's also on the consumer side. On the rigid side of the business, it's doubled in the last multiple years, and it's probably about 10% of our industrial segment at this point in time. Again, continues to grow, and we certainly continue to support with capital. I guess that ties into your comment about dividend. Yeah. The good news, if you look at the dividend payout ratio of where we are today, as we've continued to grow it continues to go down, as opposed to where we were not too many years ago, six, seven years ago. You're right, productivity and other benefits to the P&L have certainly helped to support that dividend and the lowering of the payout ratio. When do we get back to growing? We've got some really exciting things in the funnel. If you'll recall, in February, we said, "Look, we got a lot ahead of us over the next two to three years in terms of improving the bottom line for the company with the portfolio that we have today." There's incremental growth. We just talked to some of that. I'm also very excited about some fairly large innovations from a capital perspective, from a market perspective that are in the funnel that kind of overlap as we, over the next couple of years, continue to drive the SG&A and other savings within the simplified organization that will be starting to kick in with some new products that are indeed material in existing markets that we're excited about. Can't give you timing, can't give you amounts, but yeah, we like the trajectory of the dividend. We also like the trajectory of the payout ratio. We're going to continue to do what we need to do to improve the bottom line while we work on, again, some pretty exciting things that are to come in the future. Thanks, Howard. Good luck in the quarter. Thanks. That concludes our question and answer session. I will now turn the call back over to Roger Schrum for closing remarks. Again, thank you for your time this morning. As always, if you have any further questions, please don't hesitate to give us a call. Thank you. You can disconnect. This concludes today's conference call. Thank you for your participation. You may now disconnect.

Speaker 12: Thank you for standing by, and welcome to the Sonoco first quarter 2026 earnings conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you'd like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, again, press star one. Thank you. I'd now like to turn the call over to Roger Schrum, Head of Investor Relations and Global Marketing Communications. You may begin. Thank you for standing by, and welcome to the Sonoco first quarter 2026 earnings conference call. thank you for standing by and welcome to the sonoco first quarter 2026 earnings conference call All lines have been placed on mute to prevent any background noise. all lines have been placed on mute to prevent any background noise After the speaker's remarks, there will be a question and answer session. after the speaker's remarks there will be a question and answer session If you'd like to ask a question during this time, simply press star followed by the number one on your telephone keypad. if you'd like to ask a question during this time simply press star followed by the number one on your telephone keypad If you would like to withdraw your question, again, press star one. if you would like to withdraw your question again press star one Thank you. thank you I'd now like to turn the call over to Roger Schrum, Head of Investor Relations and Global Marketing Communications. i'd now like to turn the call over to roger schrum head of investor relations and global marketing communications You may begin. you may begin

Speaker 14: Thank you, Rob, and good morning, everyone. Last evening, we issued a news release and posted an investor presentation that reviews Sonoco's first quarter 2026 financial results. Both are posted on the investor relations section of our website at sonoco.com. A replay of today's conference call will be available on our website later today, and we'll post a transcript later this week. If you would turn to Slide 2, I would remind you that 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. 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. Thank you, Rob, and good morning, everyone. thank you rob and good morning everyone Last evening, we issued a news release and posted an investor presentation that reviews Sonoco's first quarter 2026 financial results. last evening we issued a news release and posted an investor presentation that reviews sonoco's first quarter 2026 financial results Both are posted on the investor relations section of our website at sonoco.com. both are posted on the investor relations section of our website at sonoco.com A replay of today's conference call will be available on our website later today, and we'll post a transcript later this week. a replay of today's conference call will be available on our website later today and we'll post a transcript later this week If you would turn to Slide 2, I would remind you that during today's call, we will discuss a number of forward-looking statements based on current expectations, estimates, and projections. if you would turn to slide 2 i would remind you that 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. these statements are not guarantees of future performance and are subject to certain risks and uncertainties Therefore, actual results may differ materially. therefore actual results may differ materially 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. 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. Joining me today are Howard Coker, President and CEO, and Paul Joachimczyk, Chief Financial Officer. For today's call, we will provide prepared remarks followed by your questions. If you'll turn to Slide 4 in our presentation, I'll now turn the call over to Howard. 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. 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 Joining me today are Howard Coker, President and CEO, and Paul Joachimczyk, Chief Financial Officer. joining me today are howard coker president and ceo and paul joachimczyk chief financial officer For today's call, we will provide prepared remarks followed by your questions. for today's call we will provide prepared remarks followed by your questions If you'll turn to Slide 4 in our presentation, I'll now turn the call over to Howard. if you'll turn to slide 4 in our presentation i'll now turn the call over to howard

Speaker 7: Thanks, Roger, and good morning, everyone. During our February Investor Day, we set out the framework for our focus strategy over the next three years, which is linked to our three priorities of sustainable growth, margin improvement, driven by our Profitability Performance Plan and efficient capital allocation, which is focused on investing in ourselves, debt reduction, and returning value to our shareholders. We made strides in each of these priorities in the first quarter while achieving a solid start to the year despite some significant headwinds. Paul will go through the numbers in more detail, but as shown on Slide 5, our adjusted earnings for the first quarter of $1.20 met our and consensus estimates. This performance was primarily driven by strong productivity savings, favorable price cost environment, and a successful start to our Profitability Performance Plan despite lower volume mix. Thanks, Roger, and good morning, everyone. thanks roger and good morning everyone During our February Investor Day, we set out the framework for our focus strategy over the next three years, which is linked to our three priorities of sustainable growth, margin improvement, driven by our Profitability Performance Plan and efficient capital allocation, which is focused on investing in ourselves, debt reduction, and returning value to our shareholders. during our february investor day we set out the framework for our focus strategy over the next three years which is linked to our three priorities of sustainable growth margin improvement driven by our profitability performance plan and efficient capital allocation which is focused on investing in ourselves debt reduction and returning value to our shareholders We made strides in each of these priorities in the first quarter while achieving a solid start to the year despite some significant headwinds. we made strides in each of these priorities in the first quarter while achieving a solid start to the year despite some significant headwinds Paul will go through the numbers in more detail, but as shown on Slide 5, our adjusted earnings for the first quarter of $1.20 met our and consensus estimates. paul will go through the numbers in more detail but as shown on slide 5 our adjusted earnings for the first quarter of $1.20 met our and consensus estimates This performance was primarily driven by strong productivity savings, favorable price cost environment, and a successful start to our Profitability Performance Plan despite lower volume mix. this performance was primarily driven by strong productivity savings favorable price cost environment and a successful start to our profitability performance plan despite lower volume mix I was really proud of our team's performance in the first quarter, despite severe winter weather, which temporarily closed some of our customers and our operations, a fire that destroyed our recycling facility in Greenville, South Carolina, and the effects of rapidly changing macroeconomic conditions stemming from the Middle East conflict. Our Consumer Packaging segment exceeded our expectations during the quarter. Our Industrial Paper Packaging segment managed well through both operational and demand challenges. As I mentioned, severe winter weather disrupted several of our U.S. operations in late January, as well as some of our large consumer customers who faced power outages, some lasting over a week. February was a much better month from a volume perspective, but with the onset of the Middle East conflict, we began experiencing rapid input cost inflation in March, and as I mentioned, an unfortunate fire in our Greenville facility on March 24th. I was really proud of our team's performance in the first quarter, despite severe winter weather, which temporarily closed some of our customers and our operations, a fire that destroyed our recycling facility in Greenville, South Carolina, and the effects of rapidly changing macroeconomic conditions stemming from the Middle East conflict. i was really proud of our team's performance in the first quarter despite severe winter weather which temporarily closed some of our customers and our operations a fire that destroyed our recycling facility in greenville south carolina and the effects of rapidly changing macroeconomic conditions stemming from the middle east conflict Our Consumer Packaging segment exceeded our expectations during the quarter. our consumer packaging segment exceeded our expectations during the quarter Our Industrial Paper Packaging segment managed well through both operational and demand challenges. our industrial paper packaging segment managed well through both operational and demand challenges As I mentioned, severe winter weather disrupted several of our U.S. operations in late January, as well as some of our large consumer customers who faced power outages, some lasting over a week. as i mentioned severe winter weather disrupted several of our u.s operations in late january as well as some of our large consumer customers who faced power outages some lasting over a week February was a much better month from a volume perspective, but with the onset of the Middle East conflict, we began experiencing rapid input cost inflation in March, and as I mentioned, an unfortunate fire in our Greenville facility on March 24th. february was a much better month from a volume perspective but with the onset of the middle east conflict we began experiencing rapid input cost inflation in march and as i mentioned an unfortunate fire in our greenville facility on march 24th Thankfully, no one was hurt, but it did lead to a one-time cost of $2 million within the quarter. As you would expect, we're not standing still in the face of these macroeconomic challenges. If you turn to Slide 6, I'll talk further about the steps we're taking to mitigate rising costs and ensure supply for our customers in this challenging inflationary environment. Energy and freight and other petrochemical-related input costs, such as resins, coatings, and other chemicals, represent approximately 10% of our annual sales, while the impact on the first quarter was under a few million dollars. Based on current estimates, we believe this inflation could add between $8 million-$10 million in additional costs in the second quarter. We are leveraging our global sourcing and supply assurance team to do all we can to help offset these rising costs. Thankfully, no one was hurt, but it did lead to a one-time cost of $2 million within the quarter. thankfully no one was hurt but it did lead to a one-time cost of $2 million within the quarter As you would expect, we're not standing still in the face of these macroeconomic challenges. as you would expect we're not standing still in the face of these macroeconomic challenges If you turn to Slide 6, I'll talk further about the steps we're taking to mitigate rising costs and ensure supply for our customers in this challenging inflationary environment. if you turn to slide 6 i'll talk further about the steps we're taking to mitigate rising costs and ensure supply for our customers in this challenging inflationary environment Energy and freight and other petrochemical-related input costs, such as resins, coatings, and other chemicals, represent approximately 10% of our annual sales, while the impact on the first quarter was under a few million dollars. energy and freight and other petrochemical-related input costs such as resins coatings and other chemicals represent approximately 10% of our annual sales while the impact on the first quarter was under a few million dollars Based on current estimates, we believe this inflation could add between $8 million-$10 million in additional costs in the second quarter. based on current estimates we believe this inflation could add between $8 million-$10 million in additional costs in the second quarter We are leveraging our global sourcing and supply assurance team to do all we can to help offset these rising costs. we are leveraging our global sourcing and supply assurance team to do all we can to help offset these rising costs That said, we must recover this inflation and have implemented a number of necessary price increases, including a $70 per ton uncoated recycled paperboard increase in the U.S. and an EUR 80 per ton increase in Europe, along with other pricing actions. These actions are showing traction in the market. Fastmarkets reported last Friday an initial $60 per ton increase in U.S. URB prices. Given our current backlogs and solid mill utilization rates entering April, we feel confident about the sustainability of our actions. As shown on Slide 7, we have purposefully shifted our mix to more resilient consumer-focused businesses, where today two-thirds of our sales are generated by our leadership positions in paper and metal cans. We're focused on affordable, center-of-the-store, staple food categories, which have historically remained resilient during periods of economic stress. That said, we must recover this inflation and have implemented a number of necessary price increases, including a $70 per ton uncoated recycled paperboard increase in the U.S. and an EUR 80 per ton increase in Europe, along with other pricing actions. that said we must recover this inflation and have implemented a number of necessary price increases including a $70 per ton uncoated recycled paperboard increase in the u.s and an eur 80 per ton increase in europe along with other pricing actions These actions are showing traction in the market. these actions are showing traction in the market Fastmarkets reported last Friday an initial $60 per ton increase in U.S. fastmarkets reported last friday an initial $60 per ton increase in u.s URB prices. urb prices Given our current backlogs and solid mill utilization rates entering April, we feel confident about the sustainability of our actions. given our current backlogs and solid mill utilization rates entering april we feel confident about the sustainability of our actions As shown on Slide 7, we have purposefully shifted our mix to more resilient consumer-focused businesses, where today two-thirds of our sales are generated by our leadership positions in paper and metal cans. We're focused on affordable, center-of-the-store, staple food categories, which have historically remained resilient during periods of economic stress. as shown on slide 7 we have purposefully shifted our mix to more resilient consumer-focused businesses where today two-thirds of our sales are generated by our leadership positions in paper and metal cans. we're focused on affordable center-of-the-store staple food categories which have historically remained resilient during periods of economic stress I'm happy that our recent portfolio work has substantially reduced our exposure to resin-based packaging. In 2023, we used approximately GBP 240 million of petroleum-based resins, while today, we use only about GBP 75 million, primarily in our industrial plastics business and our plastic cartridges for adhesives and sealants, where we do have recovery mechanisms in place. As it relates to our growth pillar, we recently opened a new paper can plant in Nong Yai, Thailand. As shown on Slide 8, Paul and I had the opportunity to participate in the grand opening with our team in Asia in March. This highly automated operation is expected to annually produce approximately 200 million units for the growing stacked chip markets in Asia, and is one of the reasons we saw a 6% lift in paper can volume in the region in the first quarter. I'm happy that our recent portfolio work has substantially reduced our exposure to resin-based packaging. i'm happy that our recent portfolio work has substantially reduced our exposure to resin-based packaging In 2023, we used approximately GBP 240 million of petroleum-based resins, while today, we use only about GBP 75 million , primarily in our industrial plastics business and our plastic cartridges for adhesives and sealants, where we do have recovery mechanisms in place. in 2023 we used approximately gbp 240 million of petroleum-based resins while today we use only about gbp 75 million primarily in our industrial plastics business and our plastic cartridges for adhesives and sealants where we do have recovery mechanisms in place As it relates to our growth pillar, we recently opened a new paper can plant in Nong Yai, Thailand. as it relates to our growth pillar we recently opened a new paper can plant in nong yai thailand As shown on Slide 8, Paul and I had the opportunity to participate in the grand opening with our team in Asia in March. as shown on slide 8 paul and i had the opportunity to participate in the grand opening with our team in asia in march This highly automated operation is expected to annually produce approximately 200 million units for the growing stacked chip markets in Asia, and is one of the reasons we saw a 6% lift in paper can volume in the region in the first quarter. this highly automated operation is expected to annually produce approximately 200 million units for the growing stacked chip markets in asia and is one of the reasons we saw a 6% lift in paper can volume in the region in the first quarter This plant was built to accommodate future capacity expansion, and we believe it could eventually become one of the largest global paper can operations over the next several years. In our industrial business, we are investing $20 million to add a new automated nailed wood reel production line at our Hartselle, Alabama facility. As shown on Slide 9, when this new line opens at the end of the second quarter, we expect it will increase our capacity by 15%, enable us to meet the needs of the fast-growing wire and cable industry, as it supplies the booming power infrastructure demand for AI center growth. I'll add that sales in our reels business were up 13% in the quarter. In addition to funding our growth, our disciplined capital allocation strategy remains focused on reducing debt and returning capital to shareholders. This plant was built to accommodate future capacity expansion, and we believe it could eventually become one of the largest global paper can operations over the next several years. this plant was built to accommodate future capacity expansion and we believe it could eventually become one of the largest global paper can operations over the next several years In our industrial business, we are investing $20 million to add a new automated nailed wood reel production line at our Hartselle, Alabama facility. in our industrial business we are investing $20 million to add a new automated nailed wood reel production line at our hartselle alabama facility As shown on Slide 9, when this new line opens at the end of the second quarter, we expect it will increase our capacity by 15%, enable us to meet the needs of the fast-growing wire and cable industry, as it supplies the booming power infrastructure demand for AI center growth. as shown on slide 9 when this new line opens at the end of the second quarter we expect it will increase our capacity by 15% enable us to meet the needs of the fast-growing wire and cable industry as it supplies the booming power infrastructure demand for ai center growth I'll add that sales in our reels business were up 13% in the quarter. i'll add that sales in our reels business were up 13% in the quarter In addition to funding our growth, our disciplined capital allocation strategy remains focused on reducing debt and returning capital to shareholders. in addition to funding our growth our disciplined capital allocation strategy remains focused on reducing debt and returning capital to shareholders As shown on Slide 10, last week, our board of directors authorized the 43rd consecutive annual increase of dividends to shareholders, raising the payout to $2.16 per share, which provides an annual yield of about 3.8%. Sonoco is one of only a few public companies that has paid dividends consecutively for more than 100 years. In summary, we had a good start to the year despite challenges, and we remain confident in our portfolio, our strategy, and ability to execute through economic cycles. With that, I'll turn it over to Paul. As shown on Slide 10, last week, our board of directors authorized the 43rd consecutive annual increase of dividends to shareholders, raising the payout to $2.16 per share, which provides an annual yield of about 3.8%. as shown on slide 10 last week our board of directors authorized the 43rd consecutive annual increase of dividends to shareholders raising the payout to $2.16 per share which provides an annual yield of about 3.8% Sonoco is one of only a few public companies that has paid dividends consecutively for more than 100 years. sonoco is one of only a few public companies that has paid dividends consecutively for more than 100 years In summary, we had a good start to the year despite challenges, and we remain confident in our portfolio, our strategy, and ability to execute through economic cycles. in summary we had a good start to the year despite challenges and we remain confident in our portfolio our strategy and ability to execute through economic cycles With that, I'll turn it over to Paul. with that i'll turn it over to paul

Speaker 13: Thank you, Howard. I'll walk you through our first quarter financial performance starting on Slide 11. With our portfolio transformation complete, we're entering the next phase defined by sustainable growth, margin improvement driven by our Profitability Performance Plan, and efficient capital allocation, which is focused on investing in ourselves, debt reduction, and returning value to our shareholders. Today, I'll cover our first quarter results and our early progress against the Profitability Performance Plan we laid out at Investor Day in February. Before I review the quarter, a quick note on comparability and some nuances related to the accounting treatment for our divestitures in 2025. TFP was divested on April 1st, 2025, and is reported as discontinued operations in last year's first quarter. ThermoSafe was divested on November 3rd, 2025, and was included in continuing operations in that same period. In 2026, neither TFP nor ThermoSafe is part of continuing operations. Thank you, Howard. thank you howard I'll walk you through our first quarter financial performance starting on Slide 11. i'll walk you through our first quarter financial performance starting on slide 11 With our portfolio transformation complete, we're entering the next phase defined by sustainable growth, margin improvement driven by our Profitability Performance Plan, and efficient capital allocation, which is focused on investing in ourselves, debt reduction, and returning value to our shareholders. with our portfolio transformation complete we're entering the next phase defined by sustainable growth margin improvement driven by our profitability performance plan and efficient capital allocation which is focused on investing in ourselves debt reduction and returning value to our shareholders Today, I'll cover our first quarter results and our early progress against the Profitability Performance Plan we laid out at Investor Day in February. today i'll cover our first quarter results and our early progress against the profitability performance plan we laid out at investor day in february Before I review the quarter, a quick note on comparability and some nuances related to the accounting treatment for our divestitures in 2025. before i review the quarter a quick note on comparability and some nuances related to the accounting treatment for our divestitures in 2025 TFP was divested on April 1st, 2025, and is reported as discontinued operations in last year's first quarter. tfp was divested on april 1st 2025 and is reported as discontinued operations in last year's first quarter ThermoSafe was divested on November 3rd, 2025, and was included in continuing operations in that same period. thermosafe was divested on november 3rd 2025 and was included in continuing operations in that same period In 2026, neither TFP nor ThermoSafe is part of continuing operations. in 2026 neither tfp nor thermosafe is part of continuing operations As a result, all year-over-year comparisons I discuss for continuing operations with ThermoSafe included in the 2025 figures, and I'll highlight the differences where applicable. Net sales from continuing operations were $1.7 billion, down 2% year over year. Results reflect lower than expected volumes, weather impacts, as well as macroeconomic and geopolitical pressures weighed on both our supply chain and our customers. Those headwinds were partially offset by pricing actions and a foreign currency benefit, primarily from the euro. Also in the year-over-year comparison is ThermoSafe, which contributed $55 million of sales in the first quarter of 2025. Excluding ThermoSafe, our sales increased by approximately 1% versus the prior year. Adjusted EBITDA was $277 million, down 4% year over year, and margin was down approximately 35 basis points. The decline was driven by lower volumes and the absence of operating profit from the divested ThermoSafe business. As a result, all year-over-year comparisons I discuss for continuing operations with ThermoSafe included in the 2025 figures, and I'll highlight the differences where applicable. as a result all year-over-year comparisons i discuss for continuing operations with thermosafe included in the 2025 figures and i'll highlight the differences where applicable Net sales from continuing operations were $1.7 billion, down 2% year over year. net sales from continuing operations were $1.7 billion down 2% year over year Results reflect lower than expected volumes, weather impacts, as well as macroeconomic and geopolitical pressures weighed on both our supply chain and our customers. results reflect lower than expected volumes weather impacts as well as macroeconomic and geopolitical pressures weighed on both our supply chain and our customers Those headwinds were partially offset by pricing actions and a foreign currency benefit, primarily from the euro. those headwinds were partially offset by pricing actions and a foreign currency benefit primarily from the euro Also in the year-over-year comparison is ThermoSafe, which contributed $55 million of sales in the first quarter of 2025. also in the year-over-year comparison is thermosafe which contributed $55 million of sales in the first quarter of 2025 Excluding ThermoSafe, our sales increased by approximately 1% versus the prior year. excluding thermosafe our sales increased by approximately 1% versus the prior year Adjusted EBITDA was $277 million, down 4% year over year, and margin was down approximately 35 basis points. adjusted ebitda was $277 million down 4% year over year and margin was down approximately 35 basis points The decline was driven by lower volumes and the absence of operating profit from the divested ThermoSafe business. the decline was driven by lower volumes and the absence of operating profit from the divested thermosafe business These impacts were partially offset by productivity initiatives, strong pricing realizations, early savings from our multiyear profitability programs, and favorable foreign exchange rates. Excluding ThermoSafe, Adjusted EBITDA would have been flat, reflecting strong cost containment from our profitability programs despite softer volumes. Overall, we're encouraged by how our continuing operations performed following last year's reorganization. On a consistent comparison basis, our key metrics are up year-over-year, reinforcing that we're building a more agile and resilient organization to navigate challenges as they arise. Now moving to Slide 12. Adjusted EBITDA for the quarter was $1.20, flat year-over-year. After excluding the impact of discontinued operations. The year-over-year results reflect the balance of a softer volume and the impact of divestitures offset by productivity gains, pricing, early profitability savings from our three-year program, a lower effective tax rate, and a favorable foreign currency. These impacts were partially offset by productivity initiatives, strong pricing realizations, early savings from our multiyear profitability programs, and favorable foreign exchange rates. these impacts were partially offset by productivity initiatives strong pricing realizations early savings from our multiyear profitability programs and favorable foreign exchange rates Excluding ThermoSafe, Adjusted EBITDA would have been flat, reflecting strong cost containment from our profitability programs despite softer volumes. excluding thermosafe adjusted ebitda would have been flat reflecting strong cost containment from our profitability programs despite softer volumes Overall, we're encouraged by how our continuing operations performed following last year's reorganization. overall we're encouraged by how our continuing operations performed following last year's reorganization On a consistent comparison basis, our key metrics are up year-over-year, reinforcing that we're building a more agile and resilient organization to navigate challenges as they arise. on a consistent comparison basis our key metrics are up year-over-year reinforcing that we're building a more agile and resilient organization to navigate challenges as they arise Now moving to Slide 12. now moving to slide 12 Adjusted EBITDA for the quarter was $1.20, flat year-over-year. adjusted ebitda for the quarter was $1.20 flat year-over-year After excluding the impact of discontinued operations. The year-over-year results reflect the balance of a softer volume and the impact of divestitures offset by productivity gains, pricing, early profitability savings from our three-year program, a lower effective tax rate, and a favorable foreign currency. after excluding the impact of discontinued operations. the year-over-year results reflect the balance of a softer volume and the impact of divestitures offset by productivity gains pricing early profitability savings from our three-year program a lower effective tax rate and a favorable foreign currency If we go a little deeper into the bridge here, I'd like to walk you through the components of each bar. We'll start with the discontinued operations adjustment, which is a net impact of $0.18, led by the TFP divestiture, partially offset by interest. The divestiture of ThermoSafe represents a $0.07 decrease. Operational changes are down $0.08 due to the pressures on the top line due to the macroeconomic and geopolitical factors within the quarter, partially offset by operational productivity. Non-operational changes are up $0.09, led by FX, especially the euro, reduction of our debt, and tax benefits, which helped to offset several headwinds the business faced within the quarter. Profitability Performance drove $0.06 of improvement. I want to underscore the importance of what we're doing to drive margins for the rest of the year by controlling the controllables. If we go a little deeper into the bridge here, I'd like to walk you through the components of each bar. if we go a little deeper into the bridge here i'd like to walk you through the components of each bar We'll start with the discontinued operations adjustment, which is a net impact of $0.18, led by the TFP divestiture, partially offset by interest. we'll start with the discontinued operations adjustment which is a net impact of $0.18 led by the tfp divestiture partially offset by interest The divestiture of ThermoSafe represents a $0.07 decrease. the divestiture of thermosafe represents a $0.07 decrease Operational changes are down $0.08 due to the pressures on the top line due to the macroeconomic and geopolitical factors within the quarter, partially offset by operational productivity. operational changes are down $0.08 due to the pressures on the top line due to the macroeconomic and geopolitical factors within the quarter partially offset by operational productivity Non-operational changes are up $0.09, led by FX, especially the euro, reduction of our debt, and tax benefits, which helped to offset several headwinds the business faced within the quarter. non-operational changes are up $0.09 led by fx especially the euro reduction of our debt and tax benefits which helped to offset several headwinds the business faced within the quarter Profitability Performance drove $0.06 of improvement. profitability performance drove $0.06 of improvement I want to underscore the importance of what we're doing to drive margins for the rest of the year by controlling the controllables. i want to underscore the importance of what we're doing to drive margins for the rest of the year by controlling the controllables We're maintaining pricing discipline, accelerating productivity, advancing our Profitability Performance Plan, and tightly managing both our costs and our capital. While the macro environment remains uncertain, we remain committed to executing the long-term financial targets we shared at Investor Day. Turning to cash flow on Slide 13. Operating cash flow in the first quarter was a use of $368 million, consistent with normal seasonal patterns as we build inventories ahead of the canning season. Gross capital investment was $62 million, below our expectations. Given the current macro environment, we are actively monitoring capital spending to stay disciplined and meet our targets. The year-over-year decline in cash flows was primarily driven by approximately $140 million of higher tax payments. That includes $103 million related to capital gains from prior period divestitures, which will not repeat. We're maintaining pricing discipline, accelerating productivity, advancing our Profitability Performance Plan, and tightly managing both our costs and our capital. we're maintaining pricing discipline accelerating productivity advancing our profitability performance plan and tightly managing both our costs and our capital While the macro environment remains uncertain, we remain committed to executing the long-term financial targets we shared at Investor Day. while the macro environment remains uncertain we remain committed to executing the long-term financial targets we shared at investor day Turning to cash flow on Slide 13. turning to cash flow on slide 13 Operating cash flow in the first quarter was a use of $368 million, consistent with normal seasonal patterns as we build inventories ahead of the canning season. operating cash flow in the first quarter was a use of $368 million consistent with normal seasonal patterns as we build inventories ahead of the canning season Gross capital investment was $62 million, below our expectations. gross capital investment was $62 million below our expectations Given the current macro environment, we are actively monitoring capital spending to stay disciplined and meet our targets. given the current macro environment we are actively monitoring capital spending to stay disciplined and meet our targets The year-over-year decline in cash flows was primarily driven by approximately $140 million of higher tax payments. the year-over-year decline in cash flows was primarily driven by approximately $140 million of higher tax payments That includes $103 million related to capital gains from prior period divestitures, which will not repeat. that includes $103 million related to capital gains from prior period divestitures which will not repeat As discussed at Investor Day, we have a clear and disciplined approach to capital allocation that includes prioritizing high return projects, continuing to optimize working capital, especially inventory and payables, and preserving balance sheet flexibility by paying down debt while still supporting the long-term growth initiatives. Turning to Slide 14. Before I go deeper into the segment results, I want to share a brief disclosure related to our Consumer segment and a footnote we've included for this discussion. In first quarter of 2025, Consumer segment Adjusted EBITDA did not include $18 million of unallocated corporate costs. You can find these details in the earnings release table on page 20 of our press release dated April 21st, 2026. Now let's turn our attention to the two segments and overall results. Starting with Consumer. As discussed at Investor Day, we have a clear and disciplined approach to capital allocation that includes prioritizing high return projects, continuing to optimize working capital, especially inventory and payables, and preserving balance sheet flexibility by paying down debt while still supporting the long-term growth initiatives. as discussed at investor day we have a clear and disciplined approach to capital allocation that includes prioritizing high return projects continuing to optimize working capital especially inventory and payables and preserving balance sheet flexibility by paying down debt while still supporting the long-term growth initiatives Turning to S lide 14. turning to s lide 14 Before I go deeper into the segment results, I want to share a brief disclosure related to our Consumer segment and a footnote we've included for this discussion. before i go deeper into the segment results i want to share a brief disclosure related to our consumer segment and a footnote we've included for this discussion In first quarter of 2025, Consumer segment Adjusted EBITDA did not include $18 million of unallocated corporate costs. in first quarter of 2025 consumer segment adjusted ebitda did not include $18 million of unallocated corporate costs You can find these details in the earnings release table on page 20 of our press release dated April 21st, 2026. you can find these details in the earnings release table on page 20 of our press release dated april 21st 2026 Now let's turn our attention to the two segments and overall results. now let's turn our attention to the two segments and overall results Starting with Consumer. starting with consumer Sales increased 3% year-over-year to $1.1 billion, driven by pricing and favorable foreign currency exchange rates, partially offset by volume and mix softness related to the macroeconomic conditions. Adjusted EBITDA from continuing operations declined 7%, reflecting lower volumes, partially offset by productivity initiatives, pricing actions, and early transformation savings. Adjusting for the 2025 unallocated corporate costs I just described, Consumer Adjusted EBITDA would've been up with margins flat. In Consumer, the team remains focused on price realization and mix discipline across key geographies while driving manufacturing and supply chain productivity. They are also leveraging accelerated transformation savings to improve their margins. Let's move on to our Industrial segment. Sales were $579 million, down year-over-year by 1%, driven by softer volumes, partially offset by favorable pricing and index-based resets with foreign currency benefits. Sales increased 3% year-over-year to $1.1 billion, driven by pricing and favorable foreign currency exchange rates, partially offset by volume and mix softness related to the macroeconomic conditions. sales increased 3% year-over-year to $1.1 billion driven by pricing and favorable foreign currency exchange rates partially offset by volume and mix softness related to the macroeconomic conditions Adjusted EBITDA from continuing operations declined 7%, reflecting lower volumes, partially offset by productivity initiatives, pricing actions, and early transformation savings. adjusted ebitda from continuing operations declined 7% reflecting lower volumes partially offset by productivity initiatives pricing actions and early transformation savings Adjusting for the 2025 unallocated corporate costs I just described, Consumer Adjusted EBITDA would've been up with margins flat. adjusting for the 2025 unallocated corporate costs i just described consumer adjusted ebitda would've been up with margins flat In Consumer, the team remains focused on price realization and mix discipline across key geographies while driving manufacturing and supply chain productivity. in consumer the team remains focused on price realization and mix discipline across key geographies while driving manufacturing and supply chain productivity They are also leveraging accelerated transformation savings to improve their margins. they are also leveraging accelerated transformation savings to improve their margins Let's move on to our Industrial segment. let's move on to our industrial segment Sales were $579 million, down year-over-year by 1%, driven by softer volumes, partially offset by favorable pricing and index-based resets with foreign currency benefits. sales were $579 million down year-over-year by 1% driven by softer volumes partially offset by favorable pricing and index-based resets with foreign currency benefits Adjusted EBITDA declined by $7 million to $100 million, a 7% decrease as lower volumes were partially mitigated by pricing resets and productivity improvements. EBITDA margin was lower year-over-year due to unfavorable volume and mix, along with losses attributed to a fire at a recycling facility in Greenville, South Carolina. The industrial segment is focused fully on capturing index-based pricing resets as they flow through, executing against cost and productivity initiatives already underway, and preserving margin discipline while managing demand variability. We've seen good progress throughout the current month, which supports our confidence as we move into the second quarter. Turning to Slide 15. We are pleased with the early progress of our three-year Profitability Performance Plan outlined at Investor Day. In the first quarter, we delivered $8 million of savings, progressing towards our $150 million-$200 million target. Adjusted EBITDA declined by $7 million to $100 million, a 7% decrease as lower volumes were partially mitigated by pricing resets and productivity improvements. adjusted ebitda declined by $7 million to $100 million a 7% decrease as lower volumes were partially mitigated by pricing resets and productivity improvements EBITDA margin was lower year-over-year due to unfavorable volume and mix, along with losses attributed to a fire at a recycling facility in Greenville, South Carolina. ebitda margin was lower year-over-year due to unfavorable volume and mix along with losses attributed to a fire at a recycling facility in greenville south carolina The industrial segment is focused fully on capturing index-based pricing resets as they flow through, executing against cost and productivity initiatives already underway, and preserving margin discipline while managing demand variability. the industrial segment is focused fully on capturing index-based pricing resets as they flow through executing against cost and productivity initiatives already underway and preserving margin discipline while managing demand variability We've seen good progress throughout the current month, which supports our confidence as we move into the second quarter. we've seen good progress throughout the current month which supports our confidence as we move into the second quarter Turning to Slide 15. turning to slide 15 We are pleased with the early progress of our three-year Profitability Performance Plan outlined at Investor Day. we are pleased with the early progress of our three-year profitability performance plan outlined at investor day In the first quarter, we delivered $8 million of savings, progressing towards our $150 million-$200 million target. in the first quarter we delivered $8 million of savings progressing towards our $150 million-$200 million target These savings were primarily driven by structural transformation initiatives, which contributed $6 million along with $2 million from commercial excellence and operational improvement efforts. Importantly, these savings are already flowing through the P&L, reinforcing our confidence in the program's execution and durability. As they annualize, they represent approximately $32 million of recurring savings. Turning to guidance on Slide 16. We are maintaining our full year outlook while recognizing that continued macroeconomic and geopolitical uncertainty, particularly late in our quarter, creates a dynamic operating environment. We will continue to monitor inflation and demand trends closely. With that, let me walk you through our full year expectations. For the full year, we expect sales of $7.25 billion-$7.75 billion, Adjusted EBITDA of $1.25 billion-$1.35 billion, Adjusted EBITDA of $5.80-$6.20, with results expected to trend towards the lower end of the range. These savings were primarily driven by structural transformation initiatives, which contributed $6 million along with $2 million from commercial excellence and operational improvement efforts. these savings were primarily driven by structural transformation initiatives which contributed $6 million along with $2 million from commercial excellence and operational improvement efforts Importantly, these savings are already flowing through the P&L, reinforcing our confidence in the program's execution and durability. importantly these savings are already flowing through the p&l reinforcing our confidence in the program's execution and durability As they annualize, they represent approximately $32 million of recurring savings. as they annualize they represent approximately $32 million of recurring savings Turning to guidance on Slide 16. We are maintaining our full year outlook while recognizing that continued macroeconomic and geopolitical uncertainty, particularly late in our quarter, creates a dynamic operating environment. turning to guidance on slide 16. we are maintaining our full year outlook while recognizing that continued macroeconomic and geopolitical uncertainty particularly late in our quarter creates a dynamic operating environment We will continue to monitor inflation and demand trends closely. we will continue to monitor inflation and demand trends closely With that, let me walk you through our full year expectations. with that let me walk you through our full year expectations For the full year, we expect sales of $7.25 billion-$7.75 billion, Adjusted EBITDA of $1.25 billion-$1.35 billion, Adjusted EBITDA of $5.80-$6.20, with results expected to trend towards the lower end of the range. for the full year we expect sales of $7.25 billion-$7.75 billion adjusted ebitda of $1.25 billion-$1.35 billion adjusted ebitda of $5.80-$6.20 with results expected to trend towards the lower end of the range While we are maintaining our Adjusted EBITDA outlook, EPS will not track EBITDA one for one because of the tighter EPS range of only $0.40. In the current environment, inflationary cost pressures and macro volatility will create a larger impact on EPS rather than EBITDA. Operating cash flow of $700-$800 million, inclusive of the $103 million of tax payments related to 2025 divestitures, which were paid in the first quarter. For the remainder of 2026, our mandate is clear. Deliver on our three-year strategy of focus by executing the Profitability Performance Plan, which is delivering $32 million of annualized savings in 2026. We have to offset volume pressures that we experienced in early 2026, and we are protecting our margins through disciplined pricing and productivity, strengthening our cash flow through working capital and disciplined capital spending. While we are maintaining our Adjusted EBITDA outlook, EPS will not track EBITDA one for one because of the tighter EPS range of only $0.40. while we are maintaining our adjusted ebitda outlook eps will not track ebitda one for one because of the tighter eps range of only $0.40 In the current environment, inflationary cost pressures and macro volatility will create a larger impact on EPS rather than EBITDA. in the current environment inflationary cost pressures and macro volatility will create a larger impact on eps rather than ebitda Operating cash flow of $700-$800 million, inclusive of the $103 million of tax payments related to 2025 divestitures, which were paid in the first quarter. operating cash flow of $700-$800 million inclusive of the $103 million of tax payments related to 2025 divestitures which were paid in the first quarter For the remainder of 2026, our mandate is clear. for the remainder of 2026 our mandate is clear Deliver on our three-year strategy of focus by executing the Profitability Performance Plan, which is delivering $32 million of annualized savings in 2026. deliver on our three-year strategy of focus by executing the profitability performance plan which is delivering $32 million of annualized savings in 2026 We have to offset volume pressures that we experienced in early 2026, and we are protecting our margins through disciplined pricing and productivity, strengthening our cash flow through working capital and disciplined capital spending. we have to offset volume pressures that we experienced in early 2026 and we are protecting our margins through disciplined pricing and productivity strengthening our cash flow through working capital and disciplined capital spending We are more focused and have stronger execution levers than in recent years, building a higher quality earnings base and strengthening cash generation, even in a challenging demand environment. Let me turn the call back over to Howard for some closing comments. We are more focused and have stronger execution levers than in recent years, building a higher quality earnings base and strengthening cash generation, even in a challenging demand environment. we are more focused and have stronger execution levers than in recent years building a higher quality earnings base and strengthening cash generation even in a challenging demand environment Let me turn the call back over to Howard for some closing comments. let me turn the call back over to howard for some closing comments

Speaker 7: Thanks, Paul. Let me close by, again, thanking our global team for successfully guiding us through these uncertain times during the first part of the year. The year started out fairly strong, but we were affected by winter weather in the Americas, losing two weeks of production from two of our major consumer customers in the Tennessee region. We also had mill and converting downtime at our mills and our customers throughout the region. We lost a facility to fire and other relatively one-off type issues, and of course, the impact of the Middle East conflict. In spite of these, we stayed focused on controls and long-term productivity to deliver well within our expectations. I think it's also important to note while uncertainty remains, there is concern how the rest of the year will unfold. However, April has shown thus far some encouraging signs. Thanks, Paul. thanks paul Let me close by, again, thanking our global team for successfully guiding us through these uncertain times during the first part of the year. let me close by again thanking our global team for successfully guiding us through these uncertain times during the first part of the year The year started out fairly strong, but we were affected by winter weather in the Americas, losing two weeks of production from two of our major consumer customers in the Tennessee region. the year started out fairly strong but we were affected by winter weather in the americas losing two weeks of production from two of our major consumer customers in the tennessee region We also had mill and converting downtime at our mills and our customers throughout the region. we also had mill and converting downtime at our mills and our customers throughout the region We lost a facility to fire and other relatively one-off type issues, and of course, the impact of the Middle East conflict. we lost a facility to fire and other relatively one-off type issues and of course the impact of the middle east conflict In spite of these, we stayed focused on controls and long-term productivity to deliver well within our expectations. in spite of these we stayed focused on controls and long-term productivity to deliver well within our expectations I think it's also important to note while uncertainty remains, there is concern how the rest of the year will unfold. i think it's also important to note while uncertainty remains there is concern how the rest of the year will unfold However, April has shown thus far some encouraging signs. however april has shown thus far some encouraging signs As we enter the pack season, consumer EMEA is seeing early positive signs in the south. The tuna pack has been strong, and while we have not built expectation for a rebound in sardines, this market too is showing some promise for improvement. Salted snack volumes are increasing, which is typical in a World Cup year. We've seen necessary index-based price in North America in our industrial business, which will drive full benefit during Q3 with incremental help in Q2, and early but reasonable expectations for URB and converted products and announced prices in Europe. Our focus on our drive for $150 million-$200 million over the next three years is on pace and will only build as we go deeper into the year. The reality is we are in uncertain times. Things are changing on a daily basis. As we enter the pack season, consumer EMEA is seeing early positive signs in the south. as we enter the pack season consumer emea is seeing early positive signs in the south The tuna pack has been strong, and while we have not built expectation for a rebound in sardines, this market too is showing some promise for improvement. the tuna pack has been strong and while we have not built expectation for a rebound in sardines this market too is showing some promise for improvement Salted snack volumes are increasing, which is typical in a World Cup year. salted snack volumes are increasing which is typical in a world cup year We've seen necessary index-based price in North America in our industrial business, which will drive full benefit during Q3 with incremental help in Q2, and early but reasonable expectations for URB and converted products and announced prices in Europe. we've seen necessary index-based price in north america in our industrial business which will drive full benefit during q3 with incremental help in q2 and early but reasonable expectations for urb and converted products and announced prices in europe Our focus on our drive for $150 million-$200 million over the next three years is on pace and will only build as we go deeper into the year. our focus on our drive for $150 million-$200 million over the next three years is on pace and will only build as we go deeper into the year The reality is we are in uncertain times. the reality is we are in uncertain times Things are changing on a daily basis. things are changing on a daily basis We do have some catch up to deal with from the quick hit of inflation as we entered into Q2, and thus the cautionary tone in our EPS forecast. Let me close by saying how pleased I am we have made, over the past several years, the changes you all have seen. If we had not made the portfolio shift, we'd be living in a vastly different world. Without our simplification efforts, we would not be driving the level of SG&A and other savings noted today. We would be facing serious supply chain issues and a much larger degree of inflation impact and volume pressures. Again, thanks to our team as we continue to drive through this difficult operating environment, and certainly looking forward to any questions that you may have. I'll turn it back over to the operator. We do have some catch up to deal with from the quick hit of inflation as we entered into Q2, and thus the cautionary tone in our EPS forecast. we do have some catch up to deal with from the quick hit of inflation as we entered into q2 and thus the cautionary tone in our eps forecast Let me close by saying how pleased I am we have made, over the past several years, the changes you all have seen. let me close by saying how pleased i am we have made over the past several years the changes you all have seen If we had not made the portfolio shift, we'd be living in a vastly different world. if we had not made the portfolio shift we'd be living in a vastly different world Without our simplification efforts, we would not be driving the level of SG&A and other savings noted today. without our simplification efforts we would not be driving the level of sg&a and other savings noted today We would be facing serious supply chain issues and a much larger degree of inflation impact and volume pressures. we would be facing serious supply chain issues and a much larger degree of inflation impact and volume pressures Again, thanks to our team as we continue to drive through this difficult operating environment, and certainly looking forward to any questions that you may have. again thanks to our team as we continue to drive through this difficult operating environment and certainly looking forward to any questions that you may have I'll turn it back over to the operator. i'll turn it back over to the operator

Speaker 12: Thank you. We will now begin the question and answer session. If you would like to ask a question, please press star one on your telephone keypad. If you would like to withdraw your question, simply press star one again. Your first question today comes from the line of George Staphos from Bank of America Securities. Your line is open. Thank you. thank you We will now begin the question and answer session. we will now begin the question and answer session If you would like to ask a question, please press star one on your telephone keypad. if you would like to ask a question please press star one on your telephone keypad If you would like to withdraw your question, simply press star one again. if you would like to withdraw your question simply press star one again Your first question today comes from the line of George Staphos from Bank of America Securities. your first question today comes from the line of george staphos from bank of america securities Your line is open. your line is open

Speaker 4: Hi, everyone. Good morning. Thanks for the presentation. I guess I had three questions. I'll ask them in sequence and turn it over. Howard, first of all, Paul, could you discuss what the effect of the storms was in the first quarter from a percentage of volume standpoint? In other words, if you did not have the storms, what would volumes have been? And what kind of early run rate are you seeing on volumes in consumer and in industrial for the second quarter? Second point, we appreciate you calling out the inflation effect so far of $8-$10 million in 2Q. Is that a sequential impact from 1Q or year-on-year? And if costs stay where they're at right now, would that be the effect in 3Q or would it be a lesser effect? Hi, everyone. hi everyone Good morning. good morning Thanks for the presentation. thanks for the presentation I guess I had three questions. i guess i had three questions I'll ask them in sequence and turn it over. i'll ask them in sequence and turn it over Howard, first of all, Paul, could you discuss what the effect of the storms was in the first quarter from a percentage of volume standpoint? howard first of all paul could you discuss what the effect of the storms was in the first quarter from a percentage of volume standpoint In other words, if you did not have the storms, what would volumes have been? in other words if you did not have the storms what would volumes have been And what kind of early run rate are you seeing on volumes in consumer and in industrial for the second quarter? and what kind of early run rate are you seeing on volumes in consumer and in industrial for the second quarter Second point, we appreciate you calling out the inflation effect so far of $8-$10 million in 2Q. second point we appreciate you calling out the inflation effect so far of $8-$10 million in 2q Is that a sequential impact from 1Q or year-on-year? is that a sequential impact from 1q or year-on-year And if costs stay where they're at right now, would that be the effect in 3Q or would it be a lesser effect? and if costs stay where they're at right now would that be the effect in 3q or would it be a lesser effect The last question I had for you is can you talk to us about how you feel on your metal supply chain, both aluminum and steel? Are there any flashpoints we need to watch out against relative to the street or do you feel like you're pretty well situated as far as you can see for the rest of the year? Thank you. The last question I had for you is can you talk to us about how you feel on your metal supply chain, both aluminum and steel? the last question i had for you is can you talk to us about how you feel on your metal supply chain both aluminum and steel Are there any flashpoints we need to watch out against relative to the street or do you feel like you're pretty well situated as far as you can see for the rest of the year? are there any flashpoints we need to watch out against relative to the street or do you feel like you're pretty well situated as far as you can see for the rest of the year Thank you. thank you

Speaker 7: Thanks, George. I'm going to let Paul cover. I don't have the direct, and I don't know if Paul does either, the full numbers in terms of the impact of the storm. What I would say on the metal side, which I will handle, is we have no issues, no concerns, not only in terms of supply chain, but we have fixed pricing through the year. Obviously, we've seen tariffs and other things that can impact, but based off of where we sit today, we're in good shape. Thanks, George. thanks george I'm going to let Paul cover. i'm going to let paul cover I don't have the direct, and I don't know if Paul does either, the full numbers in terms of the impact of the storm. i don't have the direct and i don't know if paul does either the full numbers in terms of the impact of the storm What I would say on the metal side, which I will handle, is we have no issues, no concerns, not only in terms of supply chain, but we have fixed pricing through the year. what i would say on the metal side which i will handle is we have no issues no concerns not only in terms of supply chain but we have fixed pricing through the year Obviously, we've seen tariffs and other things that can impact, but based off of where we sit today, we're in good shape. obviously we've seen tariffs and other things that can impact but based off of where we sit today we're in good shape

Speaker 13: George, on the first question that you had around the storm effect, we did experience more declines in our consumer business in the Americas, primarily due to the weather that was out there with some of our CPGs being down, two of our largest customers being down for over a week. That did create, I'll call it, a larger impact disproportionately than our international businesses that are out there. I'll say the early run rates, though, that we're seeing is we're seeing some recovery back in the business, more so in our industrial businesses. We're seeing strengthening in those markets as mills are getting closer back to the 90% effective rates, run rates that are there. We're seeing some lift back in our consumer businesses, but still more focused in on the international side. The Americas are still lagging behind. George, on the first question that you had around the storm effect, we did experience more declines in our consumer business in the Americas, primarily due to the weather that was out there with some of our CPGs being down, two of our largest customers being down for over a week. george on the first question that you had around the storm effect we did experience more declines in our consumer business in the americas primarily due to the weather that was out there with some of our cpgs being down two of our largest customers being down for over a week That did create, I'll call it, a larger impact disproportionately than our international businesses that are out there. that did create i'll call it a larger impact disproportionately than our international businesses that are out there I'll say the early run rates, though, that we're seeing is we're seeing some recovery back in the business, more so in our industrial businesses. i'll say the early run rates though that we're seeing is we're seeing some recovery back in the business more so in our industrial businesses We're seeing strengthening in those markets as mills are getting closer back to the 90% effective rates, run rates that are there. we're seeing strengthening in those markets as mills are getting closer back to the 90% effective rates run rates that are there We're seeing some lift back in our consumer businesses, but still more focused in on the international side. we're seeing some lift back in our consumer businesses but still more focused in on the international side The Americas are still lagging behind. the americas are still lagging behind It did impact the volume pressures there for sure. Moving on to your second It did impact the volume pressures there for sure. it did impact the volume pressures there for sure Moving on to your second moving on to your second

Speaker 4: Hey, Paul, let me just back you up there. Hey, Paul, let me just back you up there. hey paul let me just back you up there

Speaker 13: Oh, yeah. Oh, yeah. oh yeah

Speaker 4: Just so I know it's early, but what kind of volume are you seeing up/down? Can you put a percentage on it in your key consumer or industrial categories? Just so I know it's early, but what kind of volume are you seeing up/down? just so i know it's early but what kind of volume are you seeing up/down Can you put a percentage on it in your key consumer or industrial categories? can you put a percentage on it in your key consumer or industrial categories

Speaker 13: Yeah, I would say internationally, say low single digits that were up there. Industrial in the same ballpark, too. As you know, March was impacted primarily because of all the uncertainties that are out there. We're starting to see the recovery of those flows coming in early part of the month. I'll say it's right now, if that trend continues, it'll be a nice quarter for us in Q2. Yeah, I would say internationally, say low single digits that were up there. yeah i would say internationally say low single digits that were up there Industrial in the same ballpark, too. industrial in the same ballpark too As you know, March was impacted primarily because of all the uncertainties that are out there. as you know march was impacted primarily because of all the uncertainties that are out there We're starting to see the recovery of those flows coming in early part of the month. we're starting to see the recovery of those flows coming in early part of the month I'll say it's right now, if that trend continues, it'll be a nice quarter for us in Q2. i'll say it's right now if that trend continues it'll be a nice quarter for us in q2

Speaker 4: Okay. Okay. okay

Speaker 13: If I move on to your second question around the inflation impact, the $8 million-$10 million is what we have line of sight to for Q2. With our recovery mechanisms that we have in place, there is a little bit of a lag. I'd say right now our exposure for Q2 is the $8 million-$10 million. Obviously, if there's more macroeconomic effects, if there's something that happens with pricing pressures on our input costs, those could change to be greater in Q3 and Q4. We do think our recovery mechanisms will help cover and offset those in those future quarters that are there, we don't have full line of sight to what's going to happen in the macro world that's out there. Today we feel confident in our exposure for what Q2 is going to bear. If I move on to your second question around the inflation impact, the $8 million-$10 million is what we have line of sight to for Q2. if i move on to your second question around the inflation impact the $8 million-$10 million is what we have line of sight to for q2 With our recovery mechanisms that we have in place, there is a little bit of a lag. with our recovery mechanisms that we have in place there is a little bit of a lag I'd say right now our exposure for Q2 is the $8 million-$10 million. i'd say right now our exposure for q2 is the $8 million-$10 million Obviously, if there's more macroeconomic effects, if there's something that happens with pricing pressures on our input costs, those could change to be greater in Q3 and Q4. obviously if there's more macroeconomic effects if there's something that happens with pricing pressures on our input costs those could change to be greater in q3 and q4 We do think our recovery mechanisms will help cover and offset those in those future quarters that are there, we don't have full line of sight to what's going to happen in the macro world that's out there. we do think our recovery mechanisms will help cover and offset those in those future quarters that are there we don't have full line of sight to what's going to happen in the macro world that's out there Today we feel confident in our exposure for what Q2 is going to bear. today we feel confident in our exposure for what q2 is going to bear Say, if everything holds steady, those would not recur, and we could recover that by Q3 and Q4. Say, if everything holds steady, those would not recur, and we could recover that by Q3 and Q4. say if everything holds steady those would not recur and we could recover that by q3 and q4

Speaker 4: Thank you very much. Thank you very much. thank you very much

Speaker 13: Mm-hmm. Mm-hmm. mm-hmm

Speaker 12: Your next question comes from the line of John Dunigan from Jefferies. Your line is open. Your next question comes from the line of John Dunigan from Jefferies. your next question comes from the line of john dunigan from jefferies Your line is open. your line is open

Speaker 8: Thank you, Howard. Thank you, Paul. Really appreciate all the details. I wanted to start back on the cost inflation with the $8 million-$10 million. Can you walk us through some of those key buckets and, in particular, nat gas, electricity across U.S. and Europe, and how much of that you have hedged across your businesses? If we're thinking about the freight surcharges that you called out, is there any kind of lag to putting those through contractually? Maybe you can help us quantify how much of your contracts currently have those freight surcharge mechanisms contained in them. Thanks. Thank you, Howard. thank you howard Thank you, Paul. thank you paul Really appreciate all the details. really appreciate all the details I wanted to start back on the cost inflation with the $8 million-$10 million. i wanted to start back on the cost inflation with the $8 million-$10 million Can you walk us through some of those key buckets and, in particular, nat gas, electricity across U.S. and Europe, and how much of that you have hedged across your businesses? can you walk us through some of those key buckets and in particular nat gas electricity across u.s and europe and how much of that you have hedged across your businesses If we're thinking about the freight surcharges that you called out, is there any kind of lag to putting those through contractually? if we're thinking about the freight surcharges that you called out is there any kind of lag to putting those through contractually Maybe you can help us quantify how much of your contracts currently have those freight surcharge mechanisms contained in them. maybe you can help us quantify how much of your contracts currently have those freight surcharge mechanisms contained in them Thanks. thanks

Speaker 13: Yeah, John, I'll take the first part of that. The cost inflation, the breakdown of it, you go through your freight as your primary driver of that. That was the one that we experienced almost immediately. You saw rising fuel prices, primarily in the diesel aspect, come through. We do have recovery places and mechanisms out there. There is a lag related to those, call it roughly three weeks, four weeks of a time period that's out there to get that recovery back. You're exposed, let's just say a month to be simplistic out there. As far as all the other inputs that are out there, whether it's the resins, the energy and things like that, I'd say we do have some coverage on our hedging. We haven't gone out with exactly what that coverage is from a hedging. The eight to nine is inclusive. Yeah, John, I'll take the first part of that. yeah john i'll take the first part of that The cost inflation, the breakdown of it, you go through your freight as your primary driver of that. the cost inflation the breakdown of it you go through your freight as your primary driver of that That was the one that we experienced almost immediately. that was the one that we experienced almost immediately You saw rising fuel prices, primarily in the diesel aspect, come through. you saw rising fuel prices primarily in the diesel aspect come through We do have recovery places and mechanisms out there. we do have recovery places and mechanisms out there There is a lag related to those, call it roughly three weeks, four weeks of a time period that's out there to get that recovery back. there is a lag related to those call it roughly three weeks four weeks of a time period that's out there to get that recovery back You're exposed, let's just say a month to be simplistic out there. you're exposed let's just say a month to be simplistic out there As far as all the other inputs that are out there, whether it's the resins, the energy and things like that, I'd say we do have some coverage on our hedging. as far as all the other inputs that are out there whether it's the resins the energy and things like that i'd say we do have some coverage on our hedging We haven't gone out with exactly what that coverage is from a hedging. we haven't gone out with exactly what that coverage is from a hedging The eight to nine is inclusive. the eight to nine is inclusive It's net of that. That is an impact of us from already factoring into what we already have hedged and placed into programs. That's the impact that we'll experience in our P&L. Freight is primarily the largest impact for us. It's net of that. it's net of that That is an impact of us from already factoring into what we already have hedged and placed into programs. that is an impact of us from already factoring into what we already have hedged and placed into programs That's the impact that we'll experience in our P&L. that's the impact that we'll experience in our p&l Freight is primarily the largest impact for us. freight is primarily the largest impact for us

Speaker 8: Great. That's very helpful. Just on my follow-up, I just wanted to jump over to the cost savings. You called out the $8 million from the initiatives towards the $150-$200, but productivity in the quarter was pretty impressive. It was up $33 million year-over-year. Can you just walk us through the difference between those two figures and how we should think of the cadence through the rest of the year? That'd be helpful. Great. great That's very helpful. that's very helpful Just on my follow-up, I just wanted to jump over to the cost savings. just on my follow-up i just wanted to jump over to the cost savings You called out the $8 million from the initiatives towards the $150-$200, but productivity in the quarter was pretty impressive. you called out the $8 million from the initiatives towards the $150-$200 but productivity in the quarter was pretty impressive It was up $33 million year-over-year. it was up $33 million year-over-year Can you just walk us through the difference between those two figures and how we should think of the cadence through the rest of the year? can you just walk us through the difference between those two figures and how we should think of the cadence through the rest of the year That'd be helpful. that'd be helpful

Speaker 13: Yeah. John, that's a great question. Really what we're trying to do is we're trying to delineate productivity, which really is covering our inflationary impacts, things of that nature versus the Profitability Performance Plan. The Profitability Performance Plan, as we think about it, this is costs that are going to fall right to the bottom line, and they're going to be there every quarter on a go-forward basis. That's why we did the delineation this quarter more so, and we'll continue that going forward. We want to assure you that what we are delivering in those savings and that program of the $150 million-$200 million, that is something that you can bank on for us that's going to be there quarter, after quarter, after quarter, and it's going to be recurring. Yeah. yeah John, that's a great question. john that's a great question Really what we're trying to do is we're trying to delineate productivity, which really is covering our inflationary impacts, things of that nature versus the Profitability Performance Plan. really what we're trying to do is we're trying to delineate productivity which really is covering our inflationary impacts things of that nature versus the profitability performance plan The Profitability Performance Plan, as we think about it, this is costs that are going to fall right to the bottom line, and they're going to be there every quarter on a go-forward basis. the profitability performance plan as we think about it this is costs that are going to fall right to the bottom line and they're going to be there every quarter on a go-forward basis That's why we did the delineation this quarter more so, and we'll continue that going forward. that's why we did the delineation this quarter more so and we'll continue that going forward We want to assure you that what we are delivering in those savings and that program of the $150 million-$200 million, that is something that you can bank on for us that's going to be there quarter, after quarter, after quarter, and it's going to be recurring. we want to assure you that what we are delivering in those savings and that program of the $150 million-$200 million that is something that you can bank on for us that's going to be there quarter after quarter after quarter and it's going to be recurring

Speaker 8: Got it. Thank you very much, Paul. Got it. got it Thank you very much, Paul. thank you very much paul

Speaker 13: Mm-hmm. Mm-hmm. mm-hmm

Speaker 12: Your next question comes from a line of Michael Roxland from Truist Securities. Your line is open. Your next question comes from a line of Michael Roxland from Truist Securities. your next question comes from a line of michael roxland from truist securities Your line is open. your line is open

Speaker 11: Hi, guys. Thanks for taking my questions. This is Nico Buccioni on for Mike Roxland. Just to clarify on the inflationary impacts, does your current guide assume that $8-$10 million is the limit of the impact, or do you assume current conditions basically persist through the rest of the year rather than kind of improve? Hi, guys. hi guys Thanks for taking my questions. thanks for taking my questions This is Nico Buccioni on for Mike Roxland. this is nico buccioni on for mike roxland Just to clarify on the inflationary impacts, does your current guide assume that $8-$10 million is the limit of the impact, or do you assume current conditions basically persist through the rest of the year rather than kind of improve? just to clarify on the inflationary impacts does your current guide assume that $8-$10 million is the limit of the impact or do you assume current conditions basically persist through the rest of the year rather than kind of improve Secondly, what do you think of your customers' and consumers' ability is to absorb price? How much do you think you can push before demand destruction might occur? Secondly, what do you think of your customers' and consumers' ability is to absorb price? secondly what do you think of your customers' and consumers' ability is to absorb price How much do you think you can push before demand destruction might occur? how much do you think you can push before demand destruction might occur

Speaker 7: Yeah, I would say that's what we have visibility of at this point in time. I went to extra effort to point out that with the new portfolio, particularly, our key raw materials being steel on the consumer side, they're basically flat, contractually protected through the year. We do have the resin exposure I spoke to in my opening comments. That too has recovery mechanisms in it, and it varies from within the month to within the quarter. Will we see more? It's hard to say. Depends on what happened while we were talking during this call. Virtually just seems to be changing on an immediate basis. The point here is that, from a key raw materials perspective, we feel really good in terms of the position that we're in at this point in time. The customer impact, it's hard to say. Yeah, I would say that's what we have visibility of at this point in time. yeah i would say that's what we have visibility of at this point in time I went to extra effort to point out that with the new portfolio, particularly, our key raw materials being steel on the consumer side, they're basically flat, contractually protected through the year. i went to extra effort to point out that with the new portfolio particularly our key raw materials being steel on the consumer side they're basically flat contractually protected through the year We do have the resin exposure I spoke to in my opening comments. we do have the resin exposure i spoke to in my opening comments That too has recovery mechanisms in it, and it varies from within the month to within the quarter. that too has recovery mechanisms in it and it varies from within the month to within the quarter Will we see more? will we see more It's hard to say. it's hard to say Depends on what happened while we were talking during this call. depends on what happened while we were talking during this call Virtually just seems to be changing on an immediate basis. virtually just seems to be changing on an immediate basis The point here is that, from a key raw materials perspective, we feel really good in terms of the position that we're in at this point in time. the point here is that from a key raw materials perspective we feel really good in terms of the position that we're in at this point in time The customer impact, it's hard to say. the customer impact it's hard to say Being in staple food, all I can say is what we've seen historically. When, obviously the inflation being felt at retail is also showing up in QSR and other outlets as well. When wallets get tight, we historically have seen in our consumer business that volumes are not affected and in fact, in some cases, have improved as people shop in the grocery store, cook at home as opposed to going out. Hard to predict how that's going to go. Certainly would think that, while we're talking about the packaging side of things, that there's pressures on all raw materials associated with all food items. Really on all items going forward, and ultimately we'll see how that fares through the consumer. Being in staple food, all I can say is what we've seen historically. being in staple food all i can say is what we've seen historically When, obviously the inflation being felt at retail is also showing up in QSR and other outlets as well. when obviously the inflation being felt at retail is also showing up in qsr and other outlets as well When wallets get tight, we historically have seen in our consumer business that volumes are not affected and in fact, in some cases, have improved as people shop in the grocery store, cook at home as opposed to going out. when wallets get tight we historically have seen in our consumer business that volumes are not affected and in fact in some cases have improved as people shop in the grocery store cook at home as opposed to going out Hard to predict how that's going to go. hard to predict how that's going to go Certainly would think that, while we're talking about the packaging side of things, that there's pressures on all raw materials associated with all food items. certainly would think that while we're talking about the packaging side of things that there's pressures on all raw materials associated with all food items Really on all items going forward, and ultimately we'll see how that fares through the consumer. really on all items going forward and ultimately we'll see how that fares through the consumer

Speaker 11: Got it. Understood. Just quick follow-up. I think you mentioned a little softer URB volumes in 1Q, but a pickup more recently in April. What do you attribute that pickup to, and can you share where backlogs stand right now? Got it. got it Understood. understood Just quick follow-up. just quick follow-up I think you mentioned a little softer URB volumes in 1Q, but a pickup more recently in April. i think you mentioned a little softer urb volumes in 1q but a pickup more recently in april What do you attribute that pickup to, and can you share where backlogs stand right now? what do you attribute that pickup to and can you share where backlogs stand right now

Speaker 7: Yeah, we don't really track backlogs in URB, but what we're seeing is that Paul had noted roughly a 90%-91% operating rate here, which is our largest market in URB in North America. Frankly, there's a couple of things going on. The main is that we talked in Investor Day about new products and new markets that we're entering with URB that traditionally have been served by other grades of paper, some of which has been taken out of the market, the mill closures. We've been successful in converting saturating kraft. We've got our first customer and a line of customers in the funnel right now. That is really helping us to, as we look out into the quarter, go from the low 90s, well, still low 90s, but from 90 to 92-93 type operating rates as that volume starts flowing through the mill network. Yeah, we don't really track backlogs in URB, but what we're seeing is that Paul had noted roughly a 90%-91% operating rate here, which is our largest market in URB in North America. yeah we don't really track backlogs in urb but what we're seeing is that paul had noted roughly a 90%-91% operating rate here which is our largest market in urb in north america Frankly, there's a couple of things going on. frankly there's a couple of things going on The main is that we talked in Investor Day about new products and new markets that we're entering with URB that traditionally have been served by other grades of paper, some of which has been taken out of the market, the mill closures. the main is that we talked in investor day about new products and new markets that we're entering with urb that traditionally have been served by other grades of paper some of which has been taken out of the market the mill closures We've been successful in converting saturating kraft. we've been successful in converting saturating kraft We've got our first customer and a line of customers in the funnel right now. we've got our first customer and a line of customers in the funnel right now That is really helping us to, as we look out into the quarter, go from the low 90s, well, still low 90s, but from 90 to 92-93 type operating rates as that volume starts flowing through the mill network. that is really helping us to as we look out into the quarter go from the low 90s well still low 90s but from 90 to 92-93 type operating rates as that volume starts flowing through the mill network

Speaker 11: Got it. Thank you very much. I'll turn it over. Got it. got it Thank you very much. thank you very much I'll turn it over. i'll turn it over

Speaker 7: Thanks. Thanks. thanks

Speaker 12: Your next question comes from the line of Hillary Cacanando from Deutsche Bank. Your line is open. Your next question comes from the line of Hillary Cacanando from Deutsche Bank. your next question comes from the line of hillary cacanando from deutsche bank Your line is open. your line is open

Speaker 6: Hi. Thank you for taking my question. Just regarding the softer volumes and inflationary pressures in the first quarter, could you just elaborate on which specific end markets or geographies underperformed expectations or outperformed expectations? Most notably, I know you talked a little bit about tuna pack and sardines, but if you could give a little more detail on other end markets. Hi. hi Thank you for taking my question. thank you for taking my question Just regarding the softer volumes and inflationary pressures in the first quarter, could you just elaborate on which specific end markets or geographies underperformed expectations or outperformed expectations? just regarding the softer volumes and inflationary pressures in the first quarter could you just elaborate on which specific end markets or geographies underperformed expectations or outperformed expectations Most notably, I know you talked a little bit about tuna pack and sardines, but if you could give a little more detail on other end markets. most notably i know you talked a little bit about tuna pack and sardines but if you could give a little more detail on other end markets

Speaker 7: Yeah. What I'd say, I'm really just talking the geography. If you go around the world, Paul already noted that consumer EMEA was a very low, well, low single digits off from a volume year over year. It was a bigger impact here in North America, and I don't think I want to get in, just from a confidentiality with customers, but our two largest customers on our paper can business lost seven, eight days during the winter storm. Now, we talked about that in February, and what would typically happen is we'd see them rush to make up that time, and enough time would be held in the quarter. Of course, five, seven days after our Investor Day, you wake up and find out on February 27th we bombed Iran. Yeah. yeah What I'd say, I'm really just talking the geography. what i'd say i'm really just talking the geography If you go around the world, Paul already noted that consumer EMEA was a very low, well, low single digits off from a volume year over year. if you go around the world paul already noted that consumer emea was a very low well low single digits off from a volume year over year It was a bigger impact here in North America, and I don't think I want to get in, just from a confidentiality with customers, but our two largest customers on our paper can business lost seven, eight days during the winter storm. it was a bigger impact here in north america and i don't think i want to get in just from a confidentiality with customers but our two largest customers on our paper can business lost seven, eight days during the winter storm Now, we talked about that in February, and what would typically happen is we'd see them rush to make up that time, and enough time would be held in the quarter. now we talked about that in february and what would typically happen is we'd see them rush to make up that time and enough time would be held in the quarter Of course, five, seven days after our Investor Day, you wake up and find out on February 27th we bombed Iran. of course five, seven days after our investor day you wake up and find out on february 27th we bombed iran We think they took the opportunity to bring inventories down, and we're starting to see now a bit of a pickup, and the expectation is the magnitude of what we saw in the first quarter will not repeat itself. In fact, they should be looking to make some of that up through the year. We think they took the opportunity to bring inventories down, and we're starting to see now a bit of a pickup, and the expectation is the magnitude of what we saw in the first quarter will not repeat itself. we think they took the opportunity to bring inventories down and we're starting to see now a bit of a pickup and the expectation is the magnitude of what we saw in the first quarter will not repeat itself In fact, they should be looking to make some of that up through the year. in fact they should be looking to make some of that up through the year

Speaker 6: Got it. Great. Thank you. Just to follow up, as we're three weeks into the second quarter, I know you said April picked up, but are you seeing any real discernible change in customer ordering patterns or conversations? Has anything really changed? I know you're forecasting weaker volumes, but just wanted to see if any discernible change in patterns. Got it. got it Great. great Thank you. thank you Just to follow up, as we're three weeks into the second quarter, I know you said April picked up, but are you seeing any real discernible change in customer ordering patterns or conversations? just to follow up as we're three weeks into the second quarter i know you said april picked up but are you seeing any real discernible change in customer ordering patterns or conversations Has anything really changed? has anything really changed I know you're forecasting weaker volumes, but just wanted to see if any discernible change in patterns. i know you're forecasting weaker volumes but just wanted to see if any discernible change in patterns

Speaker 13: Yeah, Hillary, this is Paul. Really no discernible patterns that are out there. We're seeing a slight uptick in the volume that's given us a little bit more confidence in our guide that's out there, but really nothing that I'd say you could lead anything to other than just a recovery from Q1. Yeah, Hillary, this is Paul. yeah hillary this is paul Really no discernible patterns that are out there. really no discernible patterns that are out there We're seeing a slight uptick in the volume that's given us a little bit more confidence in our guide that's out there, but really nothing that I'd say you could lead anything to other than just a recovery from Q1. we're seeing a slight uptick in the volume that's given us a little bit more confidence in our guide that's out there but really nothing that i'd say you could lead anything to other than just a recovery from q1

Speaker 6: Got it. Great. Thank you very much. Got it. got it Great. great Thank you very much. thank you very much

Speaker 12: Your next question comes from the line of Anthony Pettinari from Citi. Your line is open. Your next question comes from the line of Anthony Pettinari from Citi. your next question comes from the line of anthony pettinari from citi Your line is open. your line is open

Speaker 2: Good morning. Thanks for taking the question. This is actually Bryan Burgmeier on for Anthony. Maybe just focusing on consumer a little bit, volumes were down against a pretty tough comp from last year. Do you think we start to see some improvement in year-on-year volume growth, in 2Q and as we start to get into the back half, maybe from easy comps or ramping investments? Just any detail on maybe how that volume trend could develop in 2026 and consumer. Thanks. Good morning. good morning Thanks for taking the question. thanks for taking the question This is actually Bryan Burgmeier on for Anthony. this is actually bryan burgmeier on for anthony Maybe just focusing on consumer a little bit, volumes were down against a pretty tough comp from last year. maybe just focusing on consumer a little bit volumes were down against a pretty tough comp from last year Do you think we start to see some improvement in year-on-year volume growth, in 2Q and as we start to get into the back half, maybe from easy comps or ramping investments? do you think we start to see some improvement in year-on-year volume growth in 2q and as we start to get into the back half maybe from easy comps or ramping investments Just any detail on maybe how that volume trend could develop in 2026 and consumer. just any detail on maybe how that volume trend could develop in 2026 and consumer Thanks. thanks

Speaker 7: Yeah. It's pretty hard to really nail it with the amount of uncertainty we have out there. What I would say is probably on our aerosol business here in North America, pretty tough comps coming up here in the summertime and somewhat of a discretionary spend you can do without. On the other side of that would be reflective of a consumer that more of an economic downturn situation. You could see that being a tougher comp. At the same time, as I said earlier, you would expect that the food side of the business, the center of the store, the drive to the supermarket as conditions toughen, that it would balance that, if not actually exceed that. Tough to say. Yeah. yeah It's pretty hard to really nail it with the amount of uncertainty we have out there. it's pretty hard to really nail it with the amount of uncertainty we have out there What I would say is probably on our aerosol business here in North America, pretty tough comps coming up here in the summertime and somewhat of a discretionary spend you can do without. what i would say is probably on our aerosol business here in north america pretty tough comps coming up here in the summertime and somewhat of a discretionary spend you can do without On the other side of that would be reflective of a consumer that more of an economic downturn situation. on the other side of that would be reflective of a consumer that more of an economic downturn situation You could see that being a tougher comp. you could see that being a tougher comp At the same time, as I said earlier, you would expect that the food side of the business, the center of the store, the drive to the supermarket as conditions toughen, that it would balance that, if not actually exceed that. at the same time as i said earlier you would expect that the food side of the business the center of the store the drive to the supermarket as conditions toughen that it would balance that if not actually exceed that Tough to say. tough to say I mentioned earlier in Europe, the World Cup, that's kind of a normal thing for us to see that volumes start to pick up around that particular event. Kind of a wait and see. I don't know if the consumer has fully felt it to the point. It does appear we're heading in that direction. That could be favorable, frankly, for the most part of the consumer side of the business. I mentioned earlier in Europe, the World Cup, that's kind of a normal thing for us to see that volumes start to pick up around that particular event. i mentioned earlier in europe the world cup that's kind of a normal thing for us to see that volumes start to pick up around that particular event Kind of a wait and see. kind of a wait and see I don't know if the consumer has fully felt it to the point. i don't know if the consumer has fully felt it to the point It does appear we're heading in that direction. it does appear we're heading in that direction That could be favorable, frankly, for the most part of the consumer side of the business. that could be favorable frankly for the most part of the consumer side of the business

Speaker 2: Got it. Thanks for that detail. Maybe just on working capital, I'm not sure if there's any maybe sensitivity to raw material inputs that we should be mindful of just as the year goes on, trying to be mindful of higher metal prices and pet chems. Not sure if like an earnings sensitivity or just any detail you would want to put on maybe working capital or free cash flow as we think about higher metal. Thank you. I'll turn it over. Got it. got it Thanks for that detail. thanks for that detail Maybe just on working capital, I'm not sure if there's any maybe sensitivity to raw material inputs that we should be mindful of just as the year goes on, trying to be mindful of higher metal prices and pet chems. maybe just on working capital i'm not sure if there's any maybe sensitivity to raw material inputs that we should be mindful of just as the year goes on trying to be mindful of higher metal prices and pet chems Not sure if like an earnings sensitivity or just any detail you would want to put on maybe working capital or free cash flow as we think about higher metal. not sure if like an earnings sensitivity or just any detail you would want to put on maybe working capital or free cash flow as we think about higher metal Thank you. thank you I'll turn it over. i'll turn it over

Speaker 13: Yeah. Really from a working capital perspective, no real concerns there. I'd say one thing to highlight, though. We are being very disciplined about our spend on capital for the remainder of the year. We want to make sure that we're hitting our guide and our targets that we've committed to the Street. There will be some products that we'll postpone, but we're not cutting back any of our growth or our value-adding capital products that are out there. We feel really confident that with our supply chain team and our efforts that they've done to secure a really strong supply chain, both around metal packaging and all the other inputs that are there. Really no concerns from this perspective right now. That's with our current environment, as we said. Yeah. yeah Really from a working capital perspective, no real concerns there. really from a working capital perspective no real concerns there I'd say one thing to highlight, though. i'd say one thing to highlight though We are being very disciplined about our spend on capital for the remainder of the year. we are being very disciplined about our spend on capital for the remainder of the year We want to make sure that we're hitting our guide and our targets that we've committed to the Street. we want to make sure that we're hitting our guide and our targets that we've committed to the street There will be some products that we'll postpone, but we're not cutting back any of our growth or our value-adding capital products that are out there. there will be some products that we'll postpone but we're not cutting back any of our growth or our value-adding capital products that are out there We feel really confident that with our supply chain team and our efforts that they've done to secure a really strong supply chain, both around metal packaging and all the other inputs that are there. we feel really confident that with our supply chain team and our efforts that they've done to secure a really strong supply chain both around metal packaging and all the other inputs that are there Really no concerns from this perspective right now. really no concerns from this perspective right now That's with our current environment, as we said. that's with our current environment as we said

Speaker 12: Your next question comes from a line of Ghansham Panjabi from Baird. Your line is open. Your next question comes from a line of Ghansham Panjabi from Baird. your next question comes from a line of ghansham panjabi from baird Your line is open. your line is open

Speaker 5: Thank you. Good morning. Just kind of picking up on some of the last few questions. Obviously 1Q was impacted from a volume standpoint for all the reasons you kind of went through. 2Q, you gave some parameters as it relates to raw material cost inflation, et cetera, and we know what your full year guidance is. Specific to 2Q, do you expect earnings to grow year-over-year, or will it be comparable to sort of 1Q, just given what you called out as it relates to the price cost headwinds? Thank you. thank you Good morning. good morning Just kind of picking up on some of the last few questions. just kind of picking up on some of the last few questions Obviously 1Q was impacted from a volume standpoint for all the reasons you kind of went through. 2Q, you gave some parameters as it relates to raw material cost inflation, et cetera, and we know what your full year guidance is. obviously 1q was impacted from a volume standpoint for all the reasons you kind of went through 2q you gave some parameters as it relates to raw material cost inflation et cetera and we know what your full year guidance is Specific to 2Q, do you expect earnings to grow year-over-year, or will it be comparable to sort of 1Q, just given what you called out as it relates to the price cost headwinds? specific to 2q do you expect earnings to grow year-over-year or will it be comparable to sort of 1q just given what you called out as it relates to the price cost headwinds

Speaker 13: Yeah, Ghansham, we do expect earnings to grow in Q2. I will say, though, there is that inflationary impact for the raw materials that we talked about with freight and everything else that's there. That'll create a little bit of a margin drag for us and some of the pressures that are there, but we definitely expect earnings to grow. Yeah, Ghansham, we do expect earnings to grow in Q2. yeah ghansham we do expect earnings to grow in q2 I will say, though, there is that inflationary impact for the raw materials that we talked about with freight and everything else that's there. i will say though there is that inflationary impact for the raw materials that we talked about with freight and everything else that's there That'll create a little bit of a margin drag for us and some of the pressures that are there, but we definitely expect earnings to grow. that'll create a little bit of a margin drag for us and some of the pressures that are there but we definitely expect earnings to grow

Speaker 5: On a year-over-year basis, just to clarify. On a year-over-year basis, just to clarify. on a year-over-year basis just to clarify

Speaker 13: Yes. Yes. yes

Speaker 5: Okay. Thank you for that. Okay. okay Thank you for that. thank you for that

Speaker 7: Yeah. No, Ghansham, I do want to reiterate that. I know we talked about it over and over, but in the soft volume environment, the team really did deliver on the bottom line expectations for the most part, and that is not changing as we see seasonal volumes increase in terms of the levels of productivity and savings and the programs that we've got in place. I just want to say again, hats off to our team in a soft volume environment, still being able to drop down within our expectations. Yeah. yeah No, Ghansham, I do want to reiterate that. no ghansham i do want to reiterate that I know we talked about it over and over, but in the soft volume environment, the team really did deliver on the bottom line expectations for the most part, and that is not changing as we see seasonal volumes increase in terms of the levels of productivity and savings and the programs that we've got in place. i know we talked about it over and over but in the soft volume environment the team really did deliver on the bottom line expectations for the most part and that is not changing as we see seasonal volumes increase in terms of the levels of productivity and savings and the programs that we've got in place I just want to say again, hats off to our team in a soft volume environment, still being able to drop down within our expectations. i just want to say again hats off to our team in a soft volume environment still being able to drop down within our expectations

Speaker 5: Yeah, for sure. A lot going on. As it relates to the volume impact of this particular inflation cycle, and obviously customers know that price increases are coming and so on and so forth, have you seen any sort of pre-ordering or just some sort of order pattern distortions that may be amplifying some of the volume that you're seeing early part of 2Q in terms of the recovery you called out? Yeah, for sure. yeah for sure A lot going on. a lot going on As it relates to the volume impact of this particular inflation cycle, and obviously customers know that price increases are coming and so on and so forth, have you seen any sort of pre-ordering or just some sort of order pattern distortions that may be amplifying some of the volume that you're seeing early part of 2Q in terms of the recovery you called out? as it relates to the volume impact of this particular inflation cycle and obviously customers know that price increases are coming and so on and so forth have you seen any sort of pre-ordering or just some sort of order pattern distortions that may be amplifying some of the volume that you're seeing early part of 2q in terms of the recovery you called out

Speaker 7: No. In fact, it's again, based off the portfolio, the type of inflation that we're seeing is not really about product inflation, it's how we deliver. It's freight, obviously some energy, but not your typical, "Hey, you've got a 5%-10% price increase coming." In the next quarter, I need to load it up. No. No. no In fact, it's again, based off the portfolio, the type of inflation that we're seeing is not really about product inflation, it's how we deliver. in fact it's again based off the portfolio the type of inflation that we're seeing is not really about product inflation it's how we deliver It's freight, obviously some energy, but not your typical, "Hey, you've got a 5%-10% price increase coming." In the next quarter, I need to load it up. it's freight obviously some energy but not your typical "hey you've got a 5%-10% price increase coming." in the next quarter i need to load it up No. no

Speaker 5: Okay. You haven't seen any change in the macro backdrop, just broadly speaking, for your industrial business either, right? Okay. okay You haven't seen any change in the macro backdrop, just broadly speaking, for your industrial business either, right? you haven't seen any change in the macro backdrop just broadly speaking for your industrial business either right

Speaker 7: No. In fact, a little bit of concern about, yes, we had the weather impacts in the first quarter, but we've seen some green shoots here. A lot of it is self-help, entering new markets that we've never participated in before. As I mentioned earlier with saturating kraft using the, I guess, the furniture industry. Right now, you got to put that into the model to say, "Hey, we've got new business coming on that we never participated in before." Our operating rates, as I said, we've said a couple of times, are in pretty good shape. No. no In fact, a little bit of concern about, yes, we had the weather impacts in the first quarter, but we've seen some green shoots here. in fact a little bit of concern about yes we had the weather impacts in the first quarter but we've seen some green shoots here A lot of it is self-help, entering new markets that we've never participated in before. a lot of it is self-help entering new markets that we've never participated in before As I mentioned earlier with saturating kraft using the, I guess, the furniture industry. as i mentioned earlier with saturating kraft using the i guess the furniture industry Right now, you got to put that into the model to say, "Hey, we've got new business coming on that we never participated in before." Our operating rates, as I said, we've said a couple of times, are in pretty good shape. right now you got to put that into the model to say "hey we've got new business coming on that we never participated in before." our operating rates as i said we've said a couple of times are in pretty good shape

Speaker 13: Ghansham Panjabi, we have a reels business too that is doing really well in performance for us in Q1, and we expect that to continue into Q2 as well. Ghansham Panjabi, we have a reels business too that is doing really well in performance for us in Q1, and we expect that to continue into Q2 as well. ghansham panjabi we have a reels business too that is doing really well in performance for us in q1 and we expect that to continue into q2 as well

Speaker 5: Okay. Perfect. Thank you so much. Okay. okay Perfect. perfect Thank you so much. thank you so much

Speaker 7: Mm-hmm. Mm-hmm. mm-hmm

Speaker 12: Your next question comes from the line of Anojja Shah from UBS. Your line is open. Your next question comes from the line of Anojja Shah from UBS. your next question comes from the line of anojja shah from ubs Your line is open. your line is open

Speaker 1: Hi, everyone. Good morning. Hi, everyone. hi everyone Good morning. good morning

Speaker 7: Morning. Morning. morning

Speaker 1: Hi. Sorry. First, I just want to confirm, that $8 million-$10 million of inflation that you call out in 2Q, based on the lags in your pass-through, you're confident that should get recovered in the second half? Hi. hi Sorry. sorry First, I just want to confirm, that $8 million-$10 million of inflation that you call out in 2Q, based on the lags in your pass-through, you're confident that should get recovered in the second half? first i just want to confirm that $8 million-$10 million of inflation that you call out in 2q based on the lags in your pass-through you're confident that should get recovered in the second half

Speaker 13: Yes. It would get recovered. Yes. yes It would get recovered. it would get recovered

Speaker 1: Okay. Assuming, though, and if there is additional inflation, then it's about a quarter lag, you said. Is that right? Okay. okay Assuming, though, and if there is additional inflation, then it's about a quarter lag, you said. assuming though and if there is additional inflation then it's about a quarter lag you said Is that right? is that right

Speaker 13: Correct. Yep. Correct. correct Yep. yep

Speaker 1: Okay. Perfect. Also, you announced a new term loan at the end of March, and in the bridges you gave last quarter, you had a $0.20-$0.40 non-operational contribution on EPS. Is the interest on that new term loan sort of a headwind to that $0.20-$0.40, and is that part of why the EPS guidance is now on the lower end? How is that filtering through your 2024 guidance? Okay. okay Perfect. perfect Also, you announced a new term loan at the end of March, and in the bridges you gave last quarter, you had a $0.20-$0.40 non-operational contribution on EPS. also you announced a new term loan at the end of march and in the bridges you gave last quarter you had a $0.20-$0.40 non-operational contribution on eps Is the interest on that new term loan sort of a headwind to that $0.20-$0.40, and is that part of why the EPS guidance is now on the lower end? is the interest on that new term loan sort of a headwind to that $0.20-$0.40 and is that part of why the eps guidance is now on the lower end How is that filtering through your 2024 guidance? how is that filtering through your 2024 guidance

Speaker 13: Yeah. The term loan that we announced is really, it's a delayed draw term loan to effectively retire our loan that would be due in September later this year. It's not a significant impact to our EPS range that's out there. It's more of these inflationary impacts in the short term that is driving our EPS down more than anything else. Yeah. yeah The term loan that we announced is really, it's a delayed draw term loan to effectively retire our loan that would be due in September later this year. the term loan that we announced is really it's a delayed draw term loan to effectively retire our loan that would be due in september later this year It's not a significant impact to our EPS range that's out there. it's not a significant impact to our eps range that's out there It's more of these inflationary impacts in the short term that is driving our EPS down more than anything else. it's more of these inflationary impacts in the short term that is driving our eps down more than anything else

Speaker 1: Okay. Because of the tight range on EPS, that's why it's impacting EPS and not as much on the top- Okay. okay Because of the tight range on EPS, that's why it's impacting EPS and not as much on the top- because of the tight range on eps that's why it's impacting eps and not as much on the top-

Speaker 13: You got it. You got it. you got it

Speaker 1: Is that correct? Okay, great. Then- Is that correct? is that correct Okay, great. okay great Then- then-

Speaker 13: Yeah. If you think about the EBIT. Oh, go ahead. Yeah. yeah If you think about the EBIT. if you think about the ebit Oh, go ahead. oh go ahead

Speaker 1: Go ahead. Go ahead. go ahead

Speaker 13: I was going to say, for the EBIT range, if you think about it's really $100 million that's out there. If you take the taxes out of that, it really becomes $133 million range, and your EPS is only $0.40. The two are disaggregated and disproportionate, almost a 3-to-1 ratio. It's your EBIT impacts. You can have a $10 million impact in your EBIT, but it'll drive a much larger impact on your EPS change that's out there. I was going to say, for the EBIT range, if you think about it's really $100 million that's out there. i was going to say for the ebit range if you think about it's really $100 million that's out there If you take the taxes out of that, it really becomes $133 million range, and your EPS is only $0.40. if you take the taxes out of that it really becomes $133 million range and your eps is only $0.40 The two are disaggregated and disproportionate, almost a 3-to-1 ratio. the two are disaggregated and disproportionate almost a 3-to-1 ratio It's your EBIT impacts. it's your ebit impacts You can have a $10 million impact in your EBIT, but it'll drive a much larger impact on your EPS change that's out there. you can have a $10 million impact in your ebit but it'll drive a much larger impact on your eps change that's out there

Speaker 1: Right. Got it. Finally, how are you feeling about your geographic footprint now with your current split between U.S. and Europe? I only ask because some of your peers are reconsidering the benefits that they thought they would get by adding on a European business, and they're sort of saying that the large global customers tend to source more regionally. Do you believe that your global platform gives you significant economies of scale that maybe outweigh some of the complexity drawbacks? Right. right Got it. got it Finally, how are you feeling about your geographic footprint now with your current split between U.S. and Europe? finally how are you feeling about your geographic footprint now with your current split between u.s and europe I only ask because some of your peers are reconsidering the benefits that they thought they would get by adding on a European business, and they're sort of saying that the large global customers tend to source more regionally. i only ask because some of your peers are reconsidering the benefits that they thought they would get by adding on a european business and they're sort of saying that the large global customers tend to source more regionally Do you believe that your global platform gives you significant economies of scale that maybe outweigh some of the complexity drawbacks? do you believe that your global platform gives you significant economies of scale that maybe outweigh some of the complexity drawbacks

Speaker 7: Yeah. We do. Certainly, economies of scale. We like the way we're situated right now. We're over half North America. I think it's about 40% in total company, both consumer and industrial, in Europe. We've seen that flip back and forth over the last decade or so, more in favor, stronger in favor of North America. It just depends on the market, the opportunity. It's not a conscious type situation. We're happy with the portfolio. We're happy with the geographies that we participate in. Southeast Asia, particularly on the consumer side, is becoming even more material. Frankly, as we noted earlier, continues to grow at a nice pace. We are where we are today, and we do not plan on any future portfolio or inorganic moves, but it wouldn't surprise me if we weren't talking years down the road and there's a different ratio there. Yeah. yeah We do. we do Certainly, economies of scale. certainly economies of scale We like the way we're situated right now. we like the way we're situated right now We're over half North America. we're over half north america I think it's about 40% in total company, both consumer and industrial, in Europe. i think it's about 40% in total company both consumer and industrial in europe We've seen that flip back and forth over the last decade or so, more in favor, stronger in favor of North America. we've seen that flip back and forth over the last decade or so more in favor stronger in favor of north america It just depends on the market, the opportunity. it just depends on the market the opportunity It's not a conscious type situation. it's not a conscious type situation We're happy with the portfolio. we're happy with the portfolio We're happy with the geographies that we participate in. we're happy with the geographies that we participate in Southeast Asia, particularly on the consumer side, is becoming even more material. southeast asia particularly on the consumer side is becoming even more material Frankly, as we noted earlier, continues to grow at a nice pace. frankly as we noted earlier continues to grow at a nice pace We are where we are today, and we do not plan on any future portfolio or inorganic moves, but it wouldn't surprise me if we weren't talking years down the road and there's a different ratio there. we are where we are today and we do not plan on any future portfolio or inorganic moves but it wouldn't surprise me if we weren't talking years down the road and there's a different ratio there

Speaker 1: All right. Thank you very much. I'll turn it over. All right. all right Thank you very much. thank you very much I'll turn it over. i'll turn it over

Speaker 12: Your next question comes from the line of Mark Weintraub from Seaport Research Partners. Your line is open. Your next question comes from the line of Mark Weintraub from Seaport Research Partners. your next question comes from the line of mark weintraub from seaport research partners Your line is open. your line is open

Speaker 9: Great. Thank you. I got disconnected, so apologies if there's any repetition in the question here. was hoping to focus a little bit more on the volume side. Two things. One, maybe a little bit more color possible on some of the growth, on some of the potential business wins and some of the expansions. If you could perhaps scale the size of opportunity and what you've seen so far. for instance, with the new paper can facility in Thailand, how much revenue or opportunity might that provide? Then in Europe, you had been talking about at one point the possibility of converting some customers who were doing their own canning. If there's any update there on progress there. You mentioned on the saturating kraft, that was helpful. Thank you Great. great Thank you. thank you I got disconnected, so apologies if there's any repetition in the question here. was hoping to focus a little bit more on the volume side. i got disconnected so apologies if there's any repetition in the question here was hoping to focus a little bit more on the volume side Two things. two things One, maybe a little bit more color possible on some of the growth, on some of the potential business wins and some of the expansions. one maybe a little bit more color possible on some of the growth on some of the potential business wins and some of the expansions If you could perhaps scale the size of opportunity and what you've seen so far. for instance, with the new paper can facility in Thailand, how much revenue or opportunity might that provide? if you could perhaps scale the size of opportunity and what you've seen so far for instance with the new paper can facility in thailand how much revenue or opportunity might that provide Then in Europe, you had been talking about at one point the possibility of converting some customers who were doing their own canning. then in europe you had been talking about at one point the possibility of converting some customers who were doing their own canning If there's any update there on progress there. if there's any update there on progress there You mentioned on the saturating kraft, that was helpful. you mentioned on the saturating kraft that was helpful Thank you thank you Just on the flip side of it, where volume has been disappointing, and certainly there's the macroeconomic, there's the weather, et cetera, et cetera, but there's also the kind of the GLP-1 issue, and hopefully it's not as big a deal for you as for some others. Maybe just update us on your thoughts relative to that. Just on the flip side of it, where volume has been disappointing, and certainly there's the macroeconomic, there's the weather, et cetera, et cetera, but there's also the kind of the GLP-1 issue, and hopefully it's not as big a deal for you as for some others. just on the flip side of it where volume has been disappointing and certainly there's the macroeconomic there's the weather, et cetera et cetera but there's also the kind of the glp-1 issue and hopefully it's not as big a deal for you as for some others Maybe just update us on your thoughts relative to that. maybe just update us on your thoughts relative to that

Speaker 7: Yeah, Mark, a good question. Unless Paul has it, I do not have a total off the top of my head. We're not going to give out specific plant level type details. I can't really answer that question. What you did answer in your own question was where are we seeing opportunities? Certainly Thailand is reportedly going to be possibly even the third largest paper can plant that we operate globally. It's in its infancy in terms of, and we're doing about somewhere around 200 million units right now during its startup phase. Saturating kraft is really turning out to be quite an interesting market. We're in with our first customer. I could keep going in terms of investments that we've made across the portfolio. Let's put that down as a homework assignment to aggregate that for you and the rest of the group. Yeah, Mark, a good question. yeah mark a good question Unless Paul has it, I do not have a total off the top of my head. unless paul has it i do not have a total off the top of my head We're not going to give out specific plant level type details. we're not going to give out specific plant level type details I can't really answer that question. i can't really answer that question What you did answer in your own question was where are we seeing opportunities? what you did answer in your own question was where are we seeing opportunities Certainly Thailand is reportedly going to be possibly even the third largest paper can plant that we operate globally. certainly thailand is reportedly going to be possibly even the third largest paper can plant that we operate globally It's in its infancy in terms of, and we're doing about somewhere around 200 million units right now during its startup phase. it's in its infancy in terms of and we're doing about somewhere around 200 million units right now during its startup phase Saturating kraft is really turning out to be quite an interesting market. saturating kraft is really turning out to be quite an interesting market We're in with our first customer. we're in with our first customer I could keep going in terms of investments that we've made across the portfolio. i could keep going in terms of investments that we've made across the portfolio Let's put that down as a homework assignment to aggregate that for you and the rest of the group. let's put that down as a homework assignment to aggregate that for you and the rest of the group No, we're not going to talk about one individual opportunity, but I think it's a fair question from an aggregate perspective. You're right on the GLP side, we feel better about our situation today. If you go back just over a year ago, it just feels good not to be in the type of markets, confectionery, cookies, crackers, and things like that we weren't pretty heavy in. The portfolio shift, I think is more favorable in this context. I would say, but yes, we do participate with salted snacks. What we're seeing there, as we just spoke to in a bit, was that growth seems to be, it is really materializing internationally, where the GLPs are just not at the same level as they are here in the United States, particularly in Southeast Asia. No, we're not going to talk about one individual opportunity, but I think it's a fair question from an aggregate perspective. no we're not going to talk about one individual opportunity but i think it's a fair question from an aggregate perspective You're right on the GLP side, we feel better about our situation today. you're right on the glp side we feel better about our situation today If you go back just over a year ago, it just feels good not to be in the type of markets, confectionery, cookies, crackers, and things like that we weren't pretty heavy in. if you go back just over a year ago it just feels good not to be in the type of markets confectionery cookies crackers and things like that we weren't pretty heavy in The portfolio shift, I think is more favorable in this context. the portfolio shift i think is more favorable in this context I would say, but yes, we do participate with salted snacks. i would say but yes we do participate with salted snacks What we're seeing there, as we just spoke to in a bit, was that growth seems to be, it is really materializing internationally, where the GLPs are just not at the same level as they are here in the United States, particularly in Southeast Asia. what we're seeing there as we just spoke to in a bit was that growth seems to be it is really materializing internationally where the glps are just not at the same level as they are here in the united states particularly in southeast asia Eastern Europe, and even South America, where we've got expansions going on. We feel much better about our situation today from a portfolio perspective to drive through where GLPs will finally settle out at. Eastern Europe, and even South America, where we've got expansions going on. eastern europe and even south america where we've got expansions going on We feel much better about our situation today from a portfolio perspective to drive through where GLPs will finally settle out at. we feel much better about our situation today from a portfolio perspective to drive through where glps will finally settle out at

Speaker 13: Yeah. Mark, just to give you a little bit more context on the Thailand plant and referring back to a comment that Howard made in his opening statement, too, is that plant will lead to 200 million units on an annual basis for us, and it did contribute a 6% lift in our paper can volume in that region. It is going to be a significant asset for us and contribution to our overall growth and the strategy for that region. Yeah. yeah Mark, just to give you a little bit more context on the Thailand plant and referring back to a comment that Howard made in his opening statement, too, is that plant will lead to 200 million units on an annual basis for us, and it did contribute a 6% lift in our paper can volume in that region. mark just to give you a little bit more context on the thailand plant and referring back to a comment that howard made in his opening statement too is that plant will lead to 200 million units on an annual basis for us and it did contribute a 6% lift in our paper can volume in that region It is going to be a significant asset for us and contribution to our overall growth and the strategy for that region. it is going to be a significant asset for us and contribution to our overall growth and the strategy for that region

Speaker 7: With the reminder, that's the startup phase of the plant. With the reminder, that's the startup phase of the plant. with the reminder that's the startup phase of the plant

Speaker 13: You got it. You got it. you got it

Speaker 9: Right. The point being, it's a startup, A, there's more to come, B, are there also extra costs that you incur during the startup phase that presumably fade away? Right. right The point being, it's a startup, A, there's more to come, B, are there also extra costs that you incur during the startup phase that presumably fade away? the point being it's a startup a there's more to come b are there also extra costs that you incur during the startup phase that presumably fade away

Speaker 7: Yeah. Always when you're starting a new operation, yes, you've got a ramp-up curve. I'll tell you though, we have a heck of a good team. We do a lot of cans in Southeast Asia, and you never have a vertical, but you're right. We did see some costs, including a grand opening you saw the picture in the slides, was well done by the team. Yeah. yeah Always when you're starting a new operation, yes, you've got a ramp-up curve. always when you're starting a new operation yes you've got a ramp-up curve I'll tell you though, we have a heck of a good team. i'll tell you though we have a heck of a good team We do a lot of cans in Southeast Asia, and you never have a vertical, but you're right. we do a lot of cans in southeast asia and you never have a vertical but you're right We did see some costs, including a grand opening you saw the picture in the slides, was well done by the team. we did see some costs including a grand opening you saw the picture in the slides was well done by the team

Speaker 9: Great. Maybe this is getting a little too detailed, and if so, either take it offline or whatever, but is it possible sort of to walk us up a little bit, to the $8 million-$10 million? If we annualize it, $32 million-$40 million. You've got $7.5 billion of sales. We're talking about 4%-5%, 40-50 basis points of increase, which seems kind of low if freight and those other variables are about, I think you had said about 10% of revenue. It would seem like not too big an increase. I don't know if you can quickly, easily walk us up sort of the big drivers, basically how much is freight up on a percentage basis. If that's the biggest driver. Great. great Maybe this is getting a little too detailed, and if so, either take it offline or whatever, but is it possible sort of to walk us up a little bit, to the $8 million-$10 million? maybe this is getting a little too detailed and if so either take it offline or whatever but is it possible sort of to walk us up a little bit to the $8 million-$10 million If we annualize it, $32 million-$40 million. if we annualize it $32 million-$40 million You've got $7.5 billion of sales. you've got $7.5 billion of sales We're talking about 4%-5%, 40-50 basis points of increase, which seems kind of low if freight and those other variables are about, I think you had said about 10% of revenue. we're talking about 4%-5% 40-50 basis points of increase which seems kind of low if freight and those other variables are about i think you had said about 10% of revenue It would seem like not too big an increase. it would seem like not too big an increase I don't know if you can quickly, easily walk us up sort of the big drivers, basically how much is freight up on a percentage basis. i don't know if you can quickly easily walk us up sort of the big drivers basically how much is freight up on a percentage basis If that's the biggest driver. if that's the biggest driver

Speaker 13: Yeah. Mark, probably when you were disconnected, we did cover this, but freight is the largest component of that, and really where the, I'll call it as a recovery to go after that is gonna be lagged and delayed. The $8 million-$10 million is net of all of our recovery efforts that are out there. Yeah. yeah Mark, probably when you were disconnected, we did cover this, but freight is the largest component of that, and really where the, I'll call it as a recovery to go after that is gonna be lagged and delayed. mark probably when you were disconnected we did cover this but freight is the largest component of that and really where the i'll call it as a recovery to go after that is gonna be lagged and delayed The $8 million-$10 million is net of all of our recovery efforts that are out there. the $8 million-$10 million is net of all of our recovery efforts that are out there

Speaker 9: Got it. Got it. got it

Speaker 13: I would say it does seem small, and the reason it is small is because we did put the net number out there, not a gross number. I would say it does seem small, and the reason it is small is because we did put the net number out there, not a gross number. i would say it does seem small and the reason it is small is because we did put the net number out there not a gross number

Speaker 9: Okay. Thank you. Okay. okay Thank you. thank you

Speaker 13: Mm-hmm. Mm-hmm. mm-hmm

Speaker 12: Your next question comes from the line of Gabe Hajde from Wells Fargo Securities. Your line is open. Your next question comes from the line of Gabe Hajde from Wells Fargo Securities. your next question comes from the line of gabe hajde from wells fargo securities Your line is open. your line is open

Speaker 3: Hey, good morning, Howard, Paul, Roger. I'm struggling a little bit with maybe just the commentary on the second quarter, and I appreciate there's a lot of uncertainty out there, but specifically even to growing earnings in Q2, are we talking in EBITDA terms or EPS? Because I think just the reduction in interest expense should get to something like $0.15 or so of EPS growth. Just a little bit of clarity there, please. Hey, good morning, Howard, Paul, Roger. hey good morning howard paul roger I'm struggling a little bit with maybe just the commentary on the second quarter, and I appreciate there's a lot of uncertainty out there, but specifically even to growing earnings in Q2, are we talking in EBITDA terms or EPS? i'm struggling a little bit with maybe just the commentary on the second quarter and i appreciate there's a lot of uncertainty out there but specifically even to growing earnings in q2 are we talking in ebitda terms or eps Because I think just the reduction in interest expense should get to something like $0.15 or so of EPS growth. because i think just the reduction in interest expense should get to something like $0.15 or so of eps growth Just a little bit of clarity there, please. just a little bit of clarity there please

Speaker 13: Yeah. Gabe, it will be both in EBITDA and EPS. EPS does receive the benefit of the interest favorability year-over-year as well too, so that is part of it. Yeah. yeah Gabe, it will be both in EBITDA and EPS. gabe it will be both in ebitda and eps EPS does receive the benefit of the interest favorability year-over-year as well too, so that is part of it. eps does receive the benefit of the interest favorability year-over-year as well too so that is part of it

Speaker 3: Okay. Maybe looking backwards and thinking about even the second quarter, I know there's a lot of moving parts, and I apologize if I missed it, but. If we think about North America food, European food cans, and then I guess maybe global composite cans. You talked about, I think, Europe food being up low single digits in Q1, which would imply maybe down high single digits, 8% or so in North America food or aerosol, and then I guess composite can. Half of that was off because of weather. Just help us maybe on Q1 volume trends in the three different geographies or three different businesses as you think about it. Okay. okay Maybe looking backwards and thinking about even the second quarter, I know there's a lot of moving parts, and I apologize if I missed it, but. If we think about North America food, European food cans, and then I guess maybe global composite cans. maybe looking backwards and thinking about even the second quarter i know there's a lot of moving parts and i apologize if i missed it but. if we think about north america food european food cans and then i guess maybe global composite cans You talked about, I think, Europe food being up low single digits in Q1, which would imply maybe down high single digits, 8% or so in North America food or aerosol, and then I guess composite can. you talked about i think europe food being up low single digits in q1 which would imply maybe down high single digits 8% or so in north america food or aerosol and then i guess composite can Half of that was off because of weather. half of that was off because of weather Just help us maybe on Q1 volume trends in the three different geographies or three different businesses as you think about it. just help us maybe on q1 volume trends in the three different geographies or three different businesses as you think about it

Speaker 7: Yeah. You're pretty close in your math in terms of low single digits in EMEA and the correlation to how that would have impact the Americas. I really don't have that full what does it mean available to us at this point. Maybe that can be a follow-up that we hit the. Yeah. yeah You're pretty close in your math in terms of low single digits in EMEA and the correlation to how that would have impact the Americas. you're pretty close in your math in terms of low single digits in emea and the correlation to how that would have impact the americas I really don't have that full what does it mean available to us at this point. i really don't have that full what does it mean available to us at this point Maybe that can be a follow-up that we hit the. maybe that can be a follow-up that we hit the

Speaker 3: Okay. I guess, Paul, when I think about tax rate, you gave us 26% at the beginning of the year. Maybe interest tracking around $150 million, and D&A was a little light in Q1, $125 million. I think we were kind of thinking about $135 million or so. Is the 125 a good run rate going forward? I'm just thinking about, again, the translation between EBITDA and EPS. If I take the low end of EPS, call it 585 or so, I'm coming out to like 1,265 implied EBITDA. Anything that we should be mindful of there? Okay. okay I guess, Paul, when I think about tax rate, you gave us 26% at the beginning of the year. i guess paul when i think about tax rate you gave us 26% at the beginning of the year Maybe interest tracking around $150 million, and D&A was a little light in Q1, $125 million. maybe interest tracking around $150 million and d&a was a little light in q1 $125 million I think we were kind of thinking about $135 million or so. i think we were kind of thinking about $135 million or so Is the 125 a good run rate going forward? is the 125 a good run rate going forward I'm just thinking about, again, the translation between EBITDA and EPS. i'm just thinking about again the translation between ebitda and eps If I take the low end of EPS, call it 585 or so, I'm coming out to like 1,265 implied EBITDA. if i take the low end of eps call it 585 or so i'm coming out to like 1,265 implied ebitda Anything that we should be mindful of there? anything that we should be mindful of there

Speaker 13: No. I'd say your depreciation will probably tick up a little bit as some of our products come online later this year. You'll see a little bit of an increase. Your ranges, you're right in the same ballpark there. No. no I'd say your depreciation will probably tick up a little bit as some of our products come online later this year. i'd say your depreciation will probably tick up a little bit as some of our products come online later this year You'll see a little bit of an increase. you'll see a little bit of an increase Your ranges, you're right in the same ballpark there. your ranges you're right in the same ballpark there

Speaker 3: Okay. Last one for me, and I apologize if it's repetitive, but getting at Mark's question. Our math on transport as our paper business is about $20 a ton of inflation flowing through the system. I think you have 1 million forward tons in North America, maybe 1 million tons in Europe. That would imply, I don't know, something, $100 million just of inflation there. Maybe I'm overestimating things. Then the GBP 75 million of polyethylene or resin buy that you were talking about, I think that was on a quarterly basis. It's up 30 cents, give or take, just between April and March. That would be implied, just a lag on that would be maybe the $10 million bucks. Again, I'm having a hard time reconciling kind of and I believe you, right? Okay. okay Last one for me, and I apologize if it's repetitive, but getting at Mark's question. last one for me and i apologize if it's repetitive but getting at mark's question Our math on transport as our paper business is about $20 a ton of inflation flowing through the system. our math on transport as our paper business is about $20 a ton of inflation flowing through the system I think you have 1 million forward tons in North America, maybe 1 million tons in Europe. i think you have 1 million forward tons in north america maybe 1 million tons in europe That would imply, I don't know, something, $100 million just of inflation there. that would imply i don't know something $100 million just of inflation there Maybe I'm overestimating things. maybe i'm overestimating things Then the GBP 75 million of polyethylene or resin buy that you were talking about, I think that was on a quarterly basis. then the gbp 75 million of polyethylene or resin buy that you were talking about i think that was on a quarterly basis It's up 30 cents, give or take, just between April and March. it's up 30 cents give or take just between april and march That would be implied, just a lag on that would be maybe the $10 million bucks. that would be implied just a lag on that would be maybe the $10 million bucks Again, I'm having a hard time reconciling kind of and I believe you, right? again i'm having a hard time reconciling kind of and i believe you right $8 million-$10 million of inflation versus sort of the math that we've come up with independently. Maybe we're over- or underestimating. $8 million-$10 million of inflation versus sort of the math that we've come up with independently. $8 million-$10 million of inflation versus sort of the math that we've come up with independently Maybe we're over- or underestimating. maybe we're over- or underestimating

Speaker 13: Yeah. Gabe, I'd say maybe hats off to our supply chain teams. They have done a phenomenal job negotiating things. We do have in our contracts, too, some delays in the way that pricing gets passed. Those surcharges and things that you're talking about for freight can hit quicker. Also, you think about how we optimize our transportation. We keep our plants close to our customer bases and things like that as well too. They've done a phenomenal job, and we feel fairly confident in our numbers around the eight to 10 as being a net number and exposure. The gross number, you're probably absolutely spot on. It's definitely in that range, but the teams have done a phenomenal job of mitigating it. Like I said, very happy with their progress that they've done. Yeah. yeah Gabe, I'd say maybe hats off to our supply chain teams. gabe i'd say maybe hats off to our supply chain teams They have done a phenomenal job negotiating things. they have done a phenomenal job negotiating things We do have in our contracts, too, some delays in the way that pricing gets passed. we do have in our contracts too some delays in the way that pricing gets passed Those surcharges and things that you're talking about for freight can hit quicker. those surcharges and things that you're talking about for freight can hit quicker Also, you think about how we optimize our transportation. also you think about how we optimize our transportation We keep our plants close to our customer bases and things like that as well too. we keep our plants close to our customer bases and things like that as well too They've done a phenomenal job, and we feel fairly confident in our numbers around the eight to 10 as being a net number and exposure. they've done a phenomenal job and we feel fairly confident in our numbers around the eight to 10 as being a net number and exposure The gross number, you're probably absolutely spot on. the gross number you're probably absolutely spot on It's definitely in that range, but the teams have done a phenomenal job of mitigating it. it's definitely in that range but the teams have done a phenomenal job of mitigating it Like I said, very happy with their progress that they've done. like i said very happy with their progress that they've done

Speaker 7: On the resin side of it's variable in terms of contracts, some of which are monthly extending out to quarterly. That's the balance there. You've got to look at the anticipation of what was coming and the inventories that we were able to build. All of the above points to exactly what Paul said. Hats off to our procurement organization and how they've managed through this. On the resin side of it's variable in terms of contracts, some of which are monthly extending out to quarterly. on the resin side of it's variable in terms of contracts some of which are monthly extending out to quarterly That's the balance there. that's the balance there You've got to look at the anticipation of what was coming and the inventories that we were able to build. you've got to look at the anticipation of what was coming and the inventories that we were able to build All of the above points to exactly what Paul said. all of the above points to exactly what paul said Hats off to our procurement organization and how they've managed through this. hats off to our procurement organization and how they've managed through this

Speaker 3: Understood. All right, guys, good luck. I know it's volatile out there. Understood. understood All right, guys, good luck. all right guys good luck I know it's volatile out there. i know it's volatile out there

Speaker 12: Your next question comes from a line of Matt Roberts from Raymond James. Your line is open. Your next question comes from a line of Matt Roberts from Raymond James. your next question comes from a line of matt roberts from raymond james Your line is open. your line is open

Speaker 10: Thank you. Couple questions. They're all on RPC, so I'll just fire them off one by one here. First, what was RPC volume performance in 1Q? I believe that used to be in the slide deck. On April 2. Thank you. thank you Couple questions. couple questions They're all on RPC, so I'll just fire them off one by one here. they're all on rpc so i'll just fire them off one by one here First, what was RPC volume performance in 1Q? first what was rpc volume performance in 1q I believe that used to be in the slide deck. i believe that used to be in the slide deck On April 2. on april 2

Speaker 7: Yeah. I don't have Yeah. yeah I don't have i don't have

Speaker 10: Yeah Yeah yeah

Speaker 7: visibility of that level. visibility of that level. visibility of that level

Speaker 13: Matt, when we did the reorganization to the two segments, we're really talking about consumer and total now. We're not going to break out RPC cans. We're not going to break out metal pack cans. We'll talk to any major events that happen within the quarter, but we're going to keep that at a more consumer total level. Matt, when we did the reorganization to the two segments, we're really talking about consumer and total now. matt when we did the reorganization to the two segments we're really talking about consumer and total now We're not going to break out RPC cans. we're not going to break out rpc cans We're not going to break out metal pack cans. we're not going to break out metal pack cans We'll talk to any major events that happen within the quarter, but we're going to keep that at a more consumer total level. we'll talk to any major events that happen within the quarter but we're going to keep that at a more consumer total level

Speaker 10: Last couple of quarters, so that'll add a couple more lines. I'm all good there. If I may, on the April promotional trends, I mean, last year, because there was a customer on hold for working capital, has there been promotional environment changes from that customer now that the deal has closed, or has there been a broader promotional environment given your customers are seeing cost inflation as well? Last couple of quarters, so that'll add a couple more lines. last couple of quarters so that'll add a couple more lines I'm all good there. i'm all good there If I may, on the April promotional trends, I mean, last year, because there was a customer on hold for working capital, has there been promotional environment changes from that customer now that the deal has closed, or has there been a broader promotional environment given your customers are seeing cost inflation as well? if i may on the april promotional trends i mean last year because there was a customer on hold for working capital, has there been promotional environment changes from that customer now that the deal has closed or has there been a broader promotional environment given your customers are seeing cost inflation as well

Speaker 7: You were kind of breaking up, Matt, but I think I understand your question. We're seeing it's slowly happening. It's one quarter post new owner of that particular brand. Seeing probably more activity on an international perspective than we have seen here in North America. Things are improving. The relationship is rock solid. Again, it does appear if you look over in Europe and Asia, that's really the starting point of focus. The expectation is then we'll start seeing more activity here in North America over time. You were kind of breaking up, Matt, but I think I understand your question. you were kind of breaking up matt but i think i understand your question We're seeing it's slowly happening. we're seeing it's slowly happening It's one quarter post new owner of that particular brand. it's one quarter post new owner of that particular brand Seeing probably more activity on an international perspective than we have seen here in North America. seeing probably more activity on an international perspective than we have seen here in north america Things are improving. things are improving The relationship is rock solid. the relationship is rock solid Again, it does appear if you look over in Europe and Asia, that's really the starting point of focus. again it does appear if you look over in europe and asia that's really the starting point of focus The expectation is then we'll start seeing more activity here in North America over time. the expectation is then we'll start seeing more activity here in north america over time

Speaker 10: Question. Last one, if I may, on RPC. In 2025, how big was frozen juice in that category and any material headwinds in 2026 we could call out? Thank you. Question. question Last one, if I may, on RPC. last one if i may on rpc In 2025, how big was frozen juice in that category and any material headwinds in 2026 we could call out? in 2025 how big was frozen juice in that category and any material headwinds in 2026 we could call out Thank you. thank you

Speaker 7: Oh, concentrate. Gosh, it's been a long time since anybody asked about that. It's still in production here. It is more related to the spirit side of things and mixers. But I guess I can say it's public. Minute Maid has discontinued. Relatively immaterial to us in that the volume had reached such low levels. Just really not material at this point or prior to. Oh, concentrate. oh concentrate Gosh, it's been a long time since anybody asked about that. gosh it's been a long time since anybody asked about that It's still in production here. it's still in production here It is more related to the spirit side of things and mixers. it is more related to the spirit side of things and mixers But I guess I can say it's public. but i guess i can say it's public Minute Maid has discontinued. minute maid has discontinued Relatively immaterial to us in that the volume had reached such low levels. relatively immaterial to us in that the volume had reached such low levels Just really not material at this point or prior to. just really not material at this point or prior to

Speaker 12: Your next question comes from the line of George Staphos from Bank of America Securities. Your line is open. Your next question comes from the line of George Staphos from Bank of America Securities. your next question comes from the line of george staphos from bank of america securities Your line is open. your line is open

Speaker 4: Hi, everybody. Some odds and ends, just finishing up here. Can you talk about or give some clarity on the size of the reels business within the portfolio? Remind us how big that might be for you. Secondly, related to some of the activity that didn't necessarily happen last year on the consumer side with some of your customers, are there any new products that are now being considered that you may actually get some business on for this year? And if you were in a position, could you size any of that for us in terms of the revenue opportunity later in the year? Lastly, Howard, kind of longer term, looking at Slide 10 where you've got the dividend, and you do have a very good track record at Sonoco over the years. Hi, everybody. hi everybody Some odds and ends, just finishing up here. some odds and ends just finishing up here Can you talk about or give some clarity on the size of the reels business within the portfolio? can you talk about or give some clarity on the size of the reels business within the portfolio Remind us how big that might be for you. remind us how big that might be for you Secondly, related to some of the activity that didn't necessarily happen last year on the consumer side with some of your customers, are there any new products that are now being considered that you may actually get some business on for this year? secondly related to some of the activity that didn't necessarily happen last year on the consumer side with some of your customers are there any new products that are now being considered that you may actually get some business on for this year And if you were in a position, could you size any of that for us in terms of the revenue opportunity later in the year? and if you were in a position could you size any of that for us in terms of the revenue opportunity later in the year Lastly, Howard, kind of longer term, looking at Slide 10 where you've got the dividend, and you do have a very good track record at Sonoco over the years. lastly howard kind of longer term looking at slide 10 where you've got the dividend and you do have a very good track record at sonoco over the years Certainly that dividend has been growing more quickly than the organic volume growth rate for the company. You're obviously doing a very good job with productivity and mix and all the things that has made Sonoco successful over the years. How long do you think you can keep growing the dividend at that rate if volume isn't growing at that rate? When do you think that we will get to a positive on volume in the businesses, consumer and industrial? Is it third quarter, fourth quarter 2027? Any thoughts here would be great. Thank you, guys. Good luck in the quarter. Certainly that dividend has been growing more quickly than the organic volume growth rate for the company. certainly that dividend has been growing more quickly than the organic volume growth rate for the company You're obviously doing a very good job with productivity and mix and all the things that has made Sonoco successful over the years. you're obviously doing a very good job with productivity and mix and all the things that has made sonoco successful over the years How long do you think you can keep growing the dividend at that rate if volume isn't growing at that rate? how long do you think you can keep growing the dividend at that rate if volume isn't growing at that rate When do you think that we will get to a positive on volume in the businesses, consumer and industrial? when do you think that we will get to a positive on volume in the businesses consumer and industrial Is it third quarter, fourth quarter 2027? is it third quarter fourth quarter 2027 Any thoughts here would be great. any thoughts here would be great Thank you, guys. thank you guys Good luck in the quarter. good luck in the quarter

Speaker 7: Sure. George, yes, there's more than a few new products that'll be launched through the second half of the year. I can't tell you what the success rate's going to be and what type of volumes that's ultimately going to materialize in. Pretty excited about some of what we see in the funnel. It's here in North America. It's also on the consumer side. On the rigid side of the business, it's doubled in the last multiple years, and it's probably about 10% of our industrial segment at this point in time. Again, continues to grow, and we certainly continue to support with capital. I guess that ties into your comment about dividend. Yeah. Sure. sure George, yes, there's more than a few new products that'll be launched through the second half of the year. george yes there's more than a few new products that'll be launched through the second half of the year I can't tell you what the success rate's going to be and what type of volumes that's ultimately going to materialize in. i can't tell you what the success rate's going to be and what type of volumes that's ultimately going to materialize in Pretty excited about some of what we see in the funnel. pretty excited about some of what we see in the funnel It's here in North America. it's here in north america It's also on the consumer side. it's also on the consumer side On the rigid side of the business, it's doubled in the last multiple years, and it's probably about 10% of our industrial segment at this point in time. on the rigid side of the business it's doubled in the last multiple years and it's probably about 10% of our industrial segment at this point in time Again, continues to grow, and we certainly continue to support with capital. again continues to grow and we certainly continue to support with capital I guess that ties into your comment about dividend. i guess that ties into your comment about dividend Yeah. yeah The good news, if you look at the dividend payout ratio of where we are today, as we've continued to grow it continues to go down, as opposed to where we were not too many years ago, six, seven years ago. You're right, productivity and other benefits to the P&L have certainly helped to support that dividend and the lowering of the payout ratio. When do we get back to growing? We've got some really exciting things in the funnel. If you'll recall, in February, we said, "Look, we got a lot ahead of us over the next two to three years in terms of improving the bottom line for the company with the portfolio that we have today." There's incremental growth. We just talked to some of that. The good news, if you look at the dividend payout ratio of where we are today, as we've continued to grow it continues to go down, as opposed to where we were not too many years ago, six, seven years ago. the good news if you look at the dividend payout ratio of where we are today as we've continued to grow it continues to go down as opposed to where we were not too many years ago six seven years ago You're right, productivity and other benefits to the P&L have certainly helped to support that dividend and the lowering of the payout ratio. you're right productivity and other benefits to the p&l have certainly helped to support that dividend and the lowering of the payout ratio When do we get back to growing? when do we get back to growing We've got some really exciting things in the funnel. we've got some really exciting things in the funnel If you'll recall, in February, we said, "Look, we got a lot ahead of us over the next two to three years in terms of improving the bottom line for the company with the portfolio that we have today." There's incremental growth. if you'll recall in february we said "look we got a lot ahead of us over the next two to three years in terms of improving the bottom line for the company with the portfolio that we have today." there's incremental growth We just talked to some of that. we just talked to some of that I'm also very excited about some fairly large innovations from a capital perspective, from a market perspective that are in the funnel that kind of overlap as we, over the next couple of years, continue to drive the SG&A and other savings within the simplified organization that will be starting to kick in with some new products that are indeed material in existing markets that we're excited about. Can't give you timing, can't give you amounts, but yeah, we like the trajectory of the dividend. We also like the trajectory of the payout ratio. We're going to continue to do what we need to do to improve the bottom line while we work on, again, some pretty exciting things that are to come in the future. I'm also very excited about some fairly large innovations from a capital perspective, from a market perspective that are in the funnel that kind of overlap as we, over the next couple of years, continue to drive the SG&A and other savings within the simplified organization that will be starting to kick in with some new products that are indeed material in existing markets that we're excited about. i'm also very excited about some fairly large innovations from a capital perspective from a market perspective that are in the funnel that kind of overlap as we over the next couple of years continue to drive the sg&a and other savings within the simplified organization that will be starting to kick in with some new products that are indeed material in existing markets that we're excited about Can't give you timing, can't give you amounts, but yeah, we like the trajectory of the dividend. can't give you timing can't give you amounts but yeah we like the trajectory of the dividend We also like the trajectory of the payout ratio. we also like the trajectory of the payout ratio We're going to continue to do what we need to do to improve the bottom line while we work on, again, some pretty exciting things that are to come in the future. we're going to continue to do what we need to do to improve the bottom line while we work on again some pretty exciting things that are to come in the future

Speaker 4: Thanks, Howard. Good luck in the quarter. Thanks, Howard. thanks howard Good luck in the quarter. good luck in the quarter

Speaker 7: Thanks. Thanks. thanks

Speaker 12: That concludes our question and answer session. I will now turn the call back over to Roger Schrum for closing remarks. That concludes our question and answer session. that concludes our question and answer session I will now turn the call back over to Roger Schrum for closing remarks. i will now turn the call back over to roger schrum for closing remarks

Speaker 14: Again, thank you for your time this morning. As always, if you have any further questions, please don't hesitate to give us a call. Thank you. You can disconnect. Again, thank you for your time this morning. again thank you for your time this morning As always, if you have any further questions, please don't hesitate to give us a call. as always if you have any further questions please don't hesitate to give us a call Thank you. thank you You can disconnect. you can disconnect

Speaker 12: This concludes today's conference call. Thank you for your participation. You may now disconnect. This concludes today's conference call. this concludes today's conference call Thank you for your participation. thank you for your participation You may now disconnect. you may now disconnect