Q1 2024 Pactiv Evergreen Inc Earnings Call Transcript
Key Points
- Adjusted EBITDA for Q1 2024 was $168 million, at the high end of guidance, demonstrating strong financial management.
- Strategic focus on value over volume helped mitigate the impact of reduced restaurant foot traffic and inflationary pressures on the Food & Beverage Merchandising segment.
- Successful cost management initiatives, including manufacturing cost reductions and logistics improvements, are expected to drive sequential improvements and earnings momentum into the second half of 2024.
- Entered into agreements with new and existing customers across business segments, expected to ramp up in the second half of 2024, showcasing strong market execution and customer trust.
- Reiterated full-year outlook with anticipation of volume improvement and cost-saving actions to generate year-over-year adjusted EBITDA growth.
- Net revenues of $1.3 billion for the quarter represent a 13% decrease compared to last year, primarily due to the closure of the Canton North Carolina mill and lower pricing.
- Overall volumes were down 3% in the quarter, reflecting market softness and strategic decisions to focus on value over volume.
- The consumer financial health remains strained with high inflation impacting spending habits, which could continue to affect sales volumes.
- Recent increases in oil prices introduced more volatility in resin prices, potentially affecting future cost structures despite current pass-through mechanisms.
- Free cash flow was negative $74 million, influenced by seasonal inventory builds and lower profitability, highlighting challenges in cash flow management.
Good day and thank you for standing by. Welcome to the Pactiv Evergreen First Quarter 2024 earnings conference call. (Operator Instructions) Please be advised that today's conference is being recorded.
I would now like to hand the conference over to your speaker, Curt Worthington, Vice President of Strategy and Investor Relations. You may begin.
Thank you, operator, and good morning, everyone. Welcome to our first quarter 2024 earnings call. With me on the call today, we have Michael King, President and CEO; and Jon Baksht, CFO. Please visit the Events section of our Investor Relations website at www.PactivEvergreen.com and access our supplemental earnings presentation. Management's remarks today should be heard in tandem with reviewing this presentation.
Before we begin our formal remarks, I want to remind everyone that our discussions today will include forward-looking statements,
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