PureCycle Technologies (NasdaqCM:PCT) Q4 2025 Earnings call February 26, 2026 05:00 PM ET Speaker7Good day. Thank you for standing by. Welcome to the PureCycle Technologies Fourth Quarter 2025 Corporate Update. At this time, all participants are on listen-only mode. After the speaker's presentation, there'll be a question-and-answer session. To ask a question during the session, you'll need to press star one one on your telephone. You will hear an automated message advising your hand is raised. To withdraw ...

Core Viewpoint - PureCycle Technologies and TOPPAN have formed a partnership aimed at enhancing sustainability in flexible films and thermoformed packaging, responding to the increasing demand for high-quality recycled content from brand owners to meet global regulatory requirements [1][3]. Partnership and Product Development - The collaboration has led to the creation of a snack bar wrapper that contains over 30% recycled content, showcasing the capabilities of PureCycle's PureFive resin in flexible packaging applications [2]. - The snack bar wrapper demonstrates essential printability and functionality required by leading snack brands while significantly reducing environmental impact [2][3]. Sustainability Goals - The partnership emphasizes that food safety, regulatory compliance, performance, and environmental responsibility should progress together, not in competition [3]. - The companies are now focusing on multiple thermoforming applications where major brand owners are seeking recycled content solutions to comply with upcoming mandates [3]. Technological Innovation - PureCycle's dissolution recycling process converts post-consumer polypropylene packaging into virgin-like PureFive resin, effectively removing impurities that limit traditional recycling [4]. - The resulting PureFive resin meets FDA standards for food-contact applications and performs comparably to virgin resin, facilitating integration into existing manufacturing processes [4]. Market Positioning - The collaboration illustrates how innovative partnerships can yield commercially viable packaging that meets regulatory requirements and brand expectations [4][5]. - The partnership aims to enable brand owners to fulfill their sustainability commitments without compromising on quality, safety, or performance [5].

Core Insights - Sonoco Products Company hosted an Investor Day to update investors on its value creation strategy, financial targets, and capital allocation plan [1] Financial Targets and Capital Allocation - Sonoco aims for approximately 200 basis points of margin expansion by 2028, translating to an incremental value of $150 million to $200 million [2] - The company targets adjusted EBITDA of approximately $1.5 billion by the end of 2028 and aims to expand adjusted EBITDA margins by around 200 basis points [6] - Cumulative cash flow from operations is targeted at approximately $2.5 billion from 2026 to 2028, with capital expenditures maintained at about 4% of sales during the same period [6] - Long-term net leverage is targeted to be below 2.5x by the end of 2028, with a commitment to return capital to shareholders through continued dividend payments and future share repurchases [6] Company Overview - Founded in 1899, Sonoco is a global leader in sustainable metal and paper packaging, with net sales of $7.5 billion in 2025 and approximately 22,000 employees across 265 operations in 37 countries [4] - The company emphasizes a culture of innovation and sustainability, aiming to provide better solutions for stakeholders [4]

Core Insights - DCGpac has established a wholly owned subsidiary, DCGPAC UK, to expand its operations into the UK and European markets, marking its second international move after entering the UAE [1][2] - The new UK entity will serve as a regional operations hub focusing on sustainable packaging, leveraging manufacturing resources from India and an AI-driven procurement and supply chain system [2][4] - The company has secured its first major export contract with a UK-based multinational, with initial shipments expected to commence this month [3] Group 1 - The UK subsidiary is part of DCGpac's strategy to capitalize on potential benefits from upcoming India–UK and India–EU free trade agreements, positioning the UK as a gateway to Europe [3][4] - Dedicated teams have been assigned in the UK to manage daily operations and customer relationships, enhancing local engagement [4] - A partnership with UKHI has been established to focus on raw material development and circular packaging solutions, integrating various aspects of the supply chain [4][5] Group 2 - The collaboration with UKHI aims to combine expertise in circular and compostable materials with DCGpac's manufacturing capabilities and AI platforms, promoting sustainable packaging solutions for UK and European customers [5] - Recently, DCGpac opened a new facility in Noida, India, to increase its production capacity for sustainable packaging materials, supporting its international expansion efforts [5]

Core Insights - Huhtamäki Oyj reported solid performance in 2025 despite adverse currency impacts, with net sales decreasing by 4% to EUR 3,960.2 million compared to EUR 4,126.3 million in 2024 [4][25] - The company experienced a comparable net sales growth of -1% for the year, with adjusted EBIT margin improving to 10.2% [13][27] - The Board of Directors proposed a dividend of EUR 1.14 per share, marking the 17th consecutive year of dividend growth [14][33] Financial Performance Q4 2025 - Net sales for Q4 2025 were EUR 980.5 million, down 7% from EUR 1,058.7 million in Q4 2024 [3][29] - Adjusted EBIT decreased to EUR 103.2 million, a 6% decline from EUR 110.3 million in Q4 2024, impacted by EUR 4.3 million from currency movements [18][20] - Reported EPS for Q4 was EUR 0.53, down 13% from EUR 0.61 in the previous year [4][21] Financial Performance 2025 - Total capital expenditure for 2025 was EUR 171.9 million, a 31% decrease from EUR 247.9 million in 2024 [4][30] - Free cash flow increased by 44% to EUR 311.2 million compared to EUR 215.8 million in 2024 [4][30] - The company’s net debt to adjusted EBITDA ratio decreased to 1.9, indicating a stronger balance sheet [14] Business Segment Performance - In Q4 2025, the Foodservice Packaging segment saw a sales decline of 11%, while North America and Flexible Packaging segments decreased by 6% and 8% respectively [16][29] - Fiber Packaging was the only segment to show resilience, with a slight decrease of 1% in sales [16][29] - For the full year, Fiber Packaging achieved a 5% increase in sales, contrasting with declines in other segments [23][24] Strategic Initiatives - The company implemented a new operating model aimed at increasing speed of execution and accountability, which has positively impacted performance [10][12] - Huhtamäki focused on disciplined capital allocation, prioritizing investments in high-yielding segments [9][8] - The acquisition of Zellwin Farms in North America was part of the strategy to drive growth [8]

Core Viewpoint - Smurfit Westrock Plc is facing ongoing margin pressures due to higher input costs and a challenging demand environment, leading to stock performance fluctuations [2][4]. Group 1: Company Overview - Smurfit Westrock Plc is a global leader in sustainable paper-based packaging, headquartered in Dublin, Ireland, with a market capitalization of $23.01 billion [1]. Group 2: Stock Performance - Over the past 52 weeks, Smurfit Westrock's stock has declined by 14.5%, but it has increased by 18.3% year-to-date (YTD) [2]. - The stock reached a 52-week low of $32.73 in November and has since risen by 39.8% from that level [2]. - In comparison, the S&P 500 Index has gained 14.4% over the past 52 weeks and 1.4% YTD, indicating that Smurfit Westrock has underperformed the broader market over the past year but outperformed year-to-date [3]. Group 3: Operational Changes - The company announced the permanent closure of a paper machine at its La Tuque, Quebec mill, which had an annual production capacity of 127,000 tons for solid bleached sulfate (SBS), due to ongoing scale and cost challenges [4]. - Additionally, the extrusion facility in Pointe-aux-Trembles, Quebec, will also be closed, aligning operations with market realities [4]. Group 4: Financial Performance - For the fourth quarter, Smurfit Westrock reported marginal growth in net sales to $7.58 billion, while adjusted EPS fell by 27.7% year-over-year (YOY) to $0.34 [4]. - Analysts expect the company's profit to increase by 36.4% YOY to $3 per share on a diluted basis for the current fiscal year [4].

Core Insights - Xpert Packs has launched a new collection of custom tube packaging solutions focused on sustainability for various sectors including food, confectionery, and cosmetics [1][3] - The packaging is made from recyclable and biodegradable materials, ensuring an eco-friendly option for businesses [1][2] Group 1: Product Offering - The new range includes packaging options for snacks, teas, dry fruits, candies, and cosmetic products [1] - Xpert Packs provides a variety of packaging products such as display boxes, foldable boxes, mylar bags, tuck boxes, sleeve boxes, and tissue papers [3] Group 2: Sustainability Focus - The company emphasizes the use of premium paper and cardboard materials to balance environmental considerations with product durability during shipping and storage [2] - The goal of the new packaging range is to innovate while prioritizing sustainability, allowing brands to enhance the unboxing experience for customers while reducing their environmental footprint [3] Group 3: Customization and Printing - Xpert Packs offers several printing methods for custom packaging, including offset printing, digital printing, flexography, and screen printing [4] - The company also provides specialized coatings, finishes, and distinctive custom options for their packaging solutions [4]

Core Viewpoint - Ukhi has launched Ecogran, a biodegradable and compostable packaging material aimed at fashion brands and e-commerce companies, providing a lower-cost alternative to traditional plastics while reducing environmental impact [1][4]. Group 1: Product Features - Ecogran visually resembles plastic and matches its functional properties but does not contain plastic components, allowing for reduced material use without compromising strength and durability [2]. - The cost of Ecogran packaging ranges from Rs1.05 ($0.01) to Rs2.5, depending on size and intended use [2]. - Ecogran is compatible with existing plastic processing equipment, enabling manufacturers to adopt it without modifying machines or altering supply chains [3]. Group 2: Market Positioning and Strategy - Ukhi aims to position biodegradable packaging as a mainstream choice rather than a niche alternative, addressing cost as a primary obstacle to wider adoption of compostable materials [4][5]. - The company claims potential savings of 70%-80% compared to similar plastic products, making it a more attractive option for brands [4]. - Ukhi plans to expand Ecogran production across India and international markets by collaborating with fashion brands, packaging converters, and online retailers [4]. Group 3: Partnerships and Initiatives - Last year, Ukhi signed a memorandum of understanding with the Indian Institute of Packaging (IIP) to advance sustainable packaging initiatives in India, focusing on joint research and development of new materials and technologies [5].

Core Insights - Eco-Products, a US-based supplier of sustainable foodservice packaging, has officially entered the UK market, partnering with Vegware for distribution [1][2] - The company has over 30 years of experience in the US food packaging sector, providing products to various venues including stadiums and universities [1] - Eco-Products aims to help organizations manage packaging waste through practical solutions, offering reusable, recyclable, and compostable options [2][4] Product Offerings - The UK product range will include reusable items like the Veda range, recyclable cups, and compostable packaging suitable for industrial composting [3][4] - The partnership with Vegware will enhance local support services for UK buyers, facilitating access to Eco-Products' portfolio [2][3] Market Demand - There is a growing demand in the foodservice industry for sustainable packaging solutions, reflecting a shift towards meeting sustainability goals [5] - Eco-Products plans to leverage its experience and the partnership with Vegware to support UK customers effectively [5]

Core Viewpoint - International Paper plans to create two independent, publicly traded companies focused on sustainable packaging solutions in North America and EMEA, aiming to enhance value creation and operational efficiency [1][3][8]. Group 1: Company Strategy and Structure - The separation will result in two distinct companies: one for North America and another for EMEA, each with tailored management and investment strategies [1][3]. - International Paper's North American business will focus on sustainable packaging solutions, leveraging both legacy IP and DS Smith assets to serve various industries [4][5]. - EMEA Packaging will operate as a standalone entity, emphasizing innovative customer solutions and sustainability, while reallocating resources for enhanced service [8][11]. Group 2: Financial and Operational Goals - The separation is expected to strengthen International Paper's position in North America, allowing for targeted capital allocation and improved operational focus [4][6]. - Following the separation, International Paper aims to accelerate investments in organic growth, productivity, and strategic acquisitions while maintaining a strong balance sheet [6][11]. - EMEA Packaging will continue to execute its 80/20 roadmap to optimize costs and drive innovation, with a focus on meeting evolving market demands [9][10]. Group 3: Leadership and Governance - Andy Silvernail will remain as Chairman and CEO of International Paper, while Tim Nicholls will lead the new EMEA Packaging company [7][12]. - The new EMEA company will have a robust investment-grade balance sheet and a dividend policy to support operational delivery and investment flexibility [11]. Group 4: Transaction Details - The separation is expected to be structured as a spin-off, with International Paper retaining a meaningful ownership stake in the new EMEA company [13]. - The completion of the separation is anticipated within 12-15 months, subject to customary conditions and approvals [14].