Ranpak (US:PACK)2021-10-30 19:59Financial Data and Key Metrics Changes - Consolidated net revenue increased 25.6% year-over-year to $95.6 million on a constant currency basis, driven by robust demand across all product lines [17][25] - Adjusted EBITDA rose 20.3% year-over-year to $28.5 million, implying a robust 29.8% margin [28] - Gross profit increased 25.1% on a constant currency basis, resulting in a gross margin of 39.1% compared to 39.3% in the prior year [27] Business Line Data and Key Metrics Changes - Machine placements increased 14.2% year-over-year to over 129,000 machines globally [25] - Cushioning systems grew 5.1%, Void-fill installed systems increased 14.7%, and Wrapping systems increased 33.3% year-over-year [25] - All categories within PPS saw significant growth, with Cushioning up 28.0%, Void-fill up 18.5%, and Wrapping up 23.8% on a constant currency basis [27] Market Data and Key Metrics Changes - North America net revenue increased 12% for the quarter, driven by Cushioning and Wrapping [18] - Europe and Asia Pacific saw net revenue growth of approximately 36.2% on a constant currency basis, with all product lines delivering meaningful growth [19] - Strong close activity was noted in retail and industrial sectors, particularly in sustainability and e-commerce [20] Company Strategy and Development Direction - The company is focused on expanding production capacity and investing in growth initiatives to create incremental shareholder value [22] - Strategic investments in automation and material science, including partnerships with Pickle Robot and Creapaper, are aimed at enhancing product offerings and sustainability [13][15] - The company aims to balance growth with maintaining profitability amidst rising input costs and supply chain challenges [21][34] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating supply chain challenges and maintaining inventory levels, indicating a proactive approach to managing costs [47] - The outlook for 2022 is positive, with expectations for balanced growth contributions from North America and Europe/Asia Pacific [58] - Management highlighted the importance of sustainability and customer-centricity as core principles guiding the company's future direction [40] Other Important Information - The company has made a companywide equity grant to employees to foster an ownership culture [40] - A cross-currency swap agreement was entered into to hedge exchange rate variability, enhancing financial stability [30] Q&A Session Summary Question: Impact of supply chain logistics on performance - Management indicated that while there are challenges, proactive planning and increased working capital investments have positioned the company well to navigate supply chain issues [47] Question: Expectations for EBITDA margins in 2022 - Management acknowledged that while last year's margins were exceptional, they expect a sequential increase in EBITDA margins moving forward [49] Question: Outlook for machine placements and growth in 2022 - Management anticipates a more balanced growth contribution from North America and Europe/Asia Pacific, driven by strong demand across various sectors [58] Question: Performance of automated solutions and backlog - Management reported a strong backlog for automation solutions and expects significant growth in this area for 2022 [84] Question: Long-term vision for Creapaper investment - Management sees Creapaper as a strategic opportunity to enhance product offerings and sustainability, with potential applications in both retail and core business [78]