All right. Good afternoon, everybody. My name is Matt Roberts. I'm the packaging analyst here at Raymond James. With us this afternoon is Graphic Packaging, a paperboard consumer packaging company that provides packaging solutions for food and beverage, food service, household, and healthcare and beauty end markets. Many of their products you all use on a daily basis, probably not even knowing about it, from paper-based coffee cups, to the cereal boxes I eat my dinner out of, to innovative products such as six-pack ring replacements or even Cup Noodles, which are now available in paperboard and microwavable for the first time. And I know what you're all thinking. That's information that probably would have been useful in my college days, but they are indeed now microwavable for the first time. With us today is Steve Scherger, CFO. Also joining us is Melanie Skijus, VP of Investor Relations. Steve, thank you for joining. Hey, great to be here. Perhaps if you could provide an overview of the company, just high-level, why your customers choose Graphic Packaging and where your competitive advantages are. Be glad to. And Matt, thanks for having us. Thanks, everybody, for joining here as well as online. You did a great job with that introduction. You actually gave a good sense for who we are as a consumer packaging company. We're a company that we are in your lives every day. And, you know, if we look on our purpose statement, I mean, our purpose is, you know, to package everyday moments with a renewable future in mind, because we are in all of our lives, relative to where and how we eat, at home, on the go, how we drink, how we go through a drive-through, how we feed our pets, how we change our filter frames. That's the business that really, over the last five years particularly, that we've created as a business entirely focused on the consumer, entirely focused on generating products that are made from renewable resources as well as recycled resources and that are recyclable. And as such, that's really the business that, that we've created, top line of about a little over about $9.4 billion last year, about 20% EBITDA margins, good, strong balance sheet. But if you why do our consumers work with us and our customers? Why do they do business with us? We unveiled Vision 2030 a couple of weeks ago, and there were four pillars associated with that. And they line up really well with why our customers do business with us. One was innovation. We've got a great track record of creating new products. You touched on several of them in your opening commentary, that are preferred by consumers, and that help our customers win in the marketplace. So innovation, a real core attribute, of what we've been creating, particularly over the last several years. The planet. Our customers do business with us because we're a very unique example of a company that actually is focused on a circular economy. We can invest behind that. We can invest to reduce our impact on the planet, invest to reduce greenhouse gases. That helps our customers meet their sustainability goals and the expectations that they're setting with us as consumers. We're also a business built around culture. Customers work with us because we've got a very deep, diverse, unique set of capabilities that help them win in the marketplace, whether it's through new innovation, high-quality products, cost-effective solutions for them. And that, of course, all rolls through our 24,000 colleagues that make up the company. And then results. We are an important part of our customers' results. The products that we make, we make billions of them at times. And they've got to run effectively. They've got to be very high quality. They have to work. And it impacts them. It impacts their businesses, both in terms of how well they physically run, but more importantly, how the consumer reacts to the package when, when they take it off the shelf. And so we play a role in their results while, obviously, generating ours. Great overview. Thank you for that, Steve. And you did touch on the Vision 2030 targets that you just presented a couple of weeks ago. So maybe could you talk on how that builds upon what you accomplished in the Vision 2025 targets and also how it represents a shift from Vision 2025? Yeah. No, it's an important question. And, when we brought Vision 2025 to life back in September of 2019, in many ways, we were setting the stage for the investments that we thought felt were possible, and important, to scaling our company, materially, pivoting towards that consumer, making a shift towards organic and innovation-oriented growth. We were very acquisitive during that period of time, 15 acquisitions that helped to build very intentionally, the consumer packaging business that we've created. And it set some aspirations in terms of the financial metrics. And we were very fortunate to achieve the majority of those, by 2023, which really opened the door for us to bring Vision 2030 to life. The pillars I just mentioned are right at the core of it. And behind that is a financial model, driven around confidence that we can consistently grow our top line low single digits through that innovation engine that I'm referencing, as I mentioned a moment ago, that EBITDA dollars can grow consistently mid-single digits and have then inherent significant benefits from an EPS perspective. So it's a simple model, but it's a model that can generate very substantial returns in the form of above cost of capital returns 'cause we invest behind the business to do so where we can see real competitive advantage, relative to the raw materials that we produce as well as the packaging that we produce for us eventually as consumers. And that has allowed us and allows for an incredible amount of cash flow generation. We're in the midst of a very substantial capital investment in the second new, coated recycled paperboard manufacturing facility in Waco, Texas. We're putting $1 billion to work. As such, we're at a peak CapEx spend here in 2024. That'll start to meter down in 2025 as we bring that facility to life. And then, as we shared with Vision 2030, the cash flow generation of the business moves towards, you know, between $800 million and $1 billion+ as you look out over the next, you know, five to seven years. And you did touch briefly on the financial targets you laid as well, but could you maybe provide a little bit more color around that base business growth algorithm? And what are your assumptions there? And should we think about that as an annual target or a CAGR over the period? Yeah. It's and I thank you for asking that. I think the low, mid, high, single digits, of course, there may be times where we're in an economic environment that creates a challenge there. So it's probably more of a CAGR, if you will. We expect a return, a positive, growth this year given the innovations that we know, are active in the in the marketplace. We, like everyone, experienced some of the pretty well-chronicled destocking last year. For us, that wasn't as material as a lot of packaging companies just 'cause our customers don't inventory a lot of our products. But we did experience some of it. But the algorithm actually sets up very nicely, to grow consistently, mostly driven by our innovation, you know, conversions into recyclable, renewable packaging out of other alternatives. Our identifiable and addressable market is very clear to us. We can see the packages that are in an alternative today, a foam cup, for example, that we know can move to, you know, a paper cup, over time. And so our line of sight to the innovation engine is quite good. We tend to be a business that grows more with population. And so you put a little population growth on top of an innovation engine that really allows for that low-single-digit top line growth. And then when we and as we continue an enormous emphasis around being highly productive, continuing to have productivity that offsets other costs in the business, have a model for being paid for the value of the products that we produce, resulting in consistent EBITDA growth is there to be had as well. And as Waco the significant investment comes to life, there'll be value creation there as well. So that really allows us to have confidence that we can continue to operate the company in a very narrow band of EBITDA margins that over time can expand modestly. That's really how the model we see playing out over time. Right. Right. And you've spoken a lot about innovation already, and you have identified the $15 billion total addressable market from alternative products and 2 points per year from that. So maybe could you just give us some examples of those new products in the pipeline? And have you seen the pace of plastic substitution change over the years, or how has that trended? It's definitely accelerated over the last 3-4 years, and I think pretty well chronicled as to why. And there are plenty of packages that are appropriately in other alternatives. But when you look at where we have had success, what's great about it is it's very distributed. And so whether it's replacing a plastic ring for 6 cans that you may carry around of carbonated or of alcoholic cans that you may be consuming later today, and putting that into a paperboard solution, it could be literally the cups that we talked about. We've got a very substantial initiative on replacing foam cups with our proprietary, what's called a double-wall cup, which is actually a cup we've invented, that can sit in your car for hours with ice in it, doesn't sweat, works as a foam cup does, if even potentially a little bit better. That's a great example of a major move. We're more involved in canisters than we've ever been before. So think about it as the coffee or your Mentos gum, which was in a plastic container, moving to a paperboard-based container. We've got a product called PaperSeal, which think of that as bowls and trays that are fiber-based that does have a seal on top of it, but it behaves extremely well around the perimeter of the store for meats and cheeses and other more fresh products. And so we shared at our Investor Day that we've gone from a company very much known, if you went back to 2017 or beyond for making basically 12 packs of cereal boxes to one that now really participates in the totality of our lives. And we move with the consumer. If you have a bias towards branded products, we're intensely focused there. If you have a desire for more private label-oriented, we're appropriately weighted there. If you're on the go, consuming, running through a drive-through, we're there. If you're at home morning, noon, and you eat cereal at night, perfect. We're there for you as well. Good to know. And now maybe, you know, new products aside, maybe you could talk about the underlying growth that you're seeing, you know, this quarter or 2024. So more in the near term, what are you seeing in demand trends by each consumer segment? Yeah, we did definitely, like many businesses, for the first time in several years. Last year, we had three quarters of negative. We had declining volumes. For us, it kind of started in Q2 a bit, accelerated a little bit in Q3 and Q4. And as I mentioned earlier, we're not a business that our customers carry a lot of inventory of. So it showed up a little late, ended up being about a 4% destocking, we believe, if you kind of look inside the numbers for the year. And Q4 was particularly slow, and it was both in Europe and here in North America, kind of a real step back on order rates in between kind of near the U.S. Thanksgiving holiday and year-end. We've seen that move more towards normalized here as the year has kicked off, more flattish. I don't necessarily think we'll be in a growth mode in Q1, but improvement over a -5%, which for us was pretty large in Q4. So normalizing, which was what that does is it gives us confidence that for the year, we can see a move back to positive organic sales growth. We've averaged across the four prior years 2%. It was kind of in the 3s and then a little bit of the step back. So 2% is a good, strong number, we believe, kind of normalized. Who knows what the next normal is, but we're certainly in one that feels a little more normal, currently. And the band around that, you know, is gonna depend upon the assertiveness our customers have relative to promotions and the like. We've got very good line of sight to the next $200 million of new-to-the-market innovation, that we expect to earn on here in 2024. Thank you for that. Now, I will pause quickly. If anybody has a question, feel free to raise your hand. If not, we'll move right along. Oh, one over there. Can you talk about commodities and how the pricing formula works with your customers? Yeah. For us, most of our customers, we've got very longstanding relationships with, and most of them are in kind of 2-4-year contracts. So, if you're a great longstanding customer of ours, every 3 years plus or minus, we'll re-earn your business. Obviously, we operate in a competitive landscape, but we tend to, you know, hold onto or modestly increase our position with you. And that's how pricing is established on a value basis with you, as a customer every few years. And then inside of that, we have a couple different mechanisms for how prices change while we're in that contract. Some of them are more cost-oriented. Some of them are more third-party index-oriented. We've been moving away from those, over the last several years. We'll continue to do that, into the future. So there are mechanisms for how prices move while we're in our relationship with you. And then every few years, we'll re-earn it with you and make sure that we're getting paid appropriate value for the products. Our relationships with our customers are very longstanding, and whether you're a small, medium, or large customer of ours, they tend to be built for the long term. And our stability from a pricing, quality, ability to produce at scale, particularly for our large customers, is really important because we've gotta help them, you know, be successful in the marketplace with you as a consumer, as well as just across their portfolio of their own assets, who are taking advantage of our packages that they're bringing to life for us as consumers. Excellent. Thank you for the question. Maybe if you could talk about how Graphic is optimizing your manufacturing facility footprint and what specific actions have you taken that should enable a higher ROIC? Yeah. I appreciate that. And one of the things we announced along with our Investor Day, as we were unveiling Vision 2030, was a decision to enter into a sale of our Augusta bleached paperboard facility, which we acquired back in 2018 from International Paper as part of getting into the food service business. So think about that as making primarily the cups that we produce today. We took a decision that for us, it was not a manufacturing facility that drove competitive advantage for us, as a business and actually fit very strategically well with Clearwater Paper, who have a strategy of being an active participant in the bleached paperboard production. And so we have entered into an agreement with them. It's obviously under the normal DOJ regulatory environment. We've expected to close here in the second quarter, assuming everything progresses as expectations would be. What that's done is it actually takes about 600,000 tons of paperboard manufacturing capabilities out of our infrastructure and allows us to continue to invest back in, elsewhere where we choose to make our raw materials. So when we say paperboard manufacturing, that's us choosing to make the raw material that we produce to eventually make the packages. And post the sale of the Augusta facility, 95% of everything we do will be making an end product that you as a consumer interact with, a cup, a bowl, a tray, a package. And so that's been a big part of the migration. Waco, when it comes to life, will bring on another 500,000-550,000 tons of the world's lowest cost, highest quality recycled paperboard that we will then turn into packages, as well. And then as we've talked, there's about 300,000 tons of capacity that will come out. So you could work all the way through that over the next few years. We'll actually have a modestly smaller footprint when it comes to the paperboard that we choose to produce, as part of having 95% of our top line of our sales be end products that we as consumers utilize every day. Very helpful. Thank you. And good capacity color there in what it does to your capacity output. But following the sale, are there near-term capacity pressures potentially as that goes over to Clearwater Paper, or that's near-term? And then longer term, there's been discussions of incremental capacity coming in. So if you could discuss, you know, is the market capable of absorbing that, and how are you insulated from such risk, if so? Yeah. I think first, I think it's important to note, as I just mentioned, I mean, we're a consumer packaging company. So 95% of everything we do is making that package. We choose to make raw materials where we have competitive advantage, ROIC advantage, cost advantage. And then we buy paperboard around the world for the rest of our needs. So the reality of that is that's the, you know, kind of the company that, that we've created. When it comes to the production of paperboard, there's some dynamics playing out, a little bit of known bleached, a little bit of known capacity, that's coming into the world of bleached paperboard, a little bit in North America, up in Maine, a little bit in Europe. Those are the two primary components where there is some bleached paperboard that's coming into the collective market. There's been some longer-term announcements. I think one in particular, up in the Upper Peninsula of Michigan, I think is unlikely to take place anytime soon. So broadly speaking, the demand for paperboard-based packaging, I think, will continue to grow, particularly here in North America and in Europe where the consumer has a bias towards recyclable, renewable packages. So I think there will be a growth profile, broadly speaking, for that which we participate in. And then we've got our strategies for how we play there as a consumer packaging company. That certainly makes sense. So if I could switch gears a little bit now to your free cash flow profile that you detailed two weeks ago thoroughly. But so you outlined a path to cumulative $5 billion+ in free cash flow through 2030. You know, what is within Graphic's control versus what is demand-dependent? And what underlies that base case scenario that you laid out? No, thank you. And you summarized it well. As I mentioned, we're in kind of a peak CapEx spend this year, probably $950 million or so, you know, on top of a $9 billion business. So a lot of cash flow. But we're still generating cash flow in the context of that, which is important, relative to our ability to generate the kind of cash flow we'll still generate $400 million plus or minus some cash flow while spending $950 million. And next year in 2025, that number will step down. And then it'll step down to 5% of sales for 2026 and beyond. That's plenty of capital for us, about 2% of sales for maintenance, 3% to grow and be more productive every year. So that's kind of the model for the business. As such, it does generate very substantial cash flow that we can put to work back into the business. Our capital allocation components that we laid out, you know, included, you know, the potential for, you know, a steady and modestly increasing dividend, as an example, appropriate balance sheet to fit the business. We have pulled all of our investments up against repurchasing shares, repurchasing the company as we should. That's appropriate to do. And so we're looking forward, actually, to kind of the big investments that we've made, acquiring AR Packaging in Europe, Kalamazoo coated recycled paperboard facility, Waco, the second one. I mean, those are big, big investments that we've made that have created the opportunity to generate this kind of cash flow, as we look out. We're looking forward to, you know, obviously deploying that thoughtfully and creating real value from it with that much cash flow. And you certainly have taken on a lot of projects. So are there any more in the pipeline? Well, there's always projects in the pipeline. But I think what I would say, and I get this question a lot, is, is there a second or a third Waco or Kalamazoo? And the answer is no. And you can write that down. No. We're gonna spend at 5%. It's an exceptional place to be. It allows us to invest for growth in the business. And as we stand back from the business that will be post the Augusta sale of that manufacturing facility, we have the business in hand and in place that can actually grow low, mid, and high single digits. And of course, with that level of cash flow that comes back into the business after executing on that algorithm, it really opens the door nicely to how we put that back to work to create value. But the good news is, we've assessed it every way conceivable. There is no need for that next major investment. There will be CapEx of substance. And we'll do some things that we're gonna reduce greenhouse gases substantially, over the next decade. And that will require some meaningful capital investments, think recovery boilers and the like in our wood fiber paperboard facilities. But they'll be metered in, over time that allows us to put that kind of money to work. We'll make big investments in, you know, automated warehouses as an example, big meaning $100 million kind of thing. But it's all in the context of 5%. And so there isn't the next that's out there. And what, what about on, on the M&A side? You know, if the market outlook improves there, do you envision any incremental M&A? Are there areas of the portfolio that you would like to complement or strengthen? I mean, you recently did do some M&A and introduce a new product as well through that. We did. And what we've talked about is that the bar right now on M&A is pretty darn high, for a lot of appropriate reasons. And so it has to be very line of sight for us and fit the building out of our consumer packaging business. And as such, it's gonna have to be more about capabilities, something that we're not as adept at today, that having it would fit us well. So we're getting into a lot of new categories, you know, think trays, bowls, other things that have growth potential. And so our lens actually is a little wider than it used to be on what's possible. But the return expectations have to be as meaningful for us. And so, the lens probably a little wider, the bar very high. It would have to be more focused on, or there are capabilities there that we can go the route of acquiring somebody who's disrupting, doing a good job, creating something new, maybe early stage even, or, you know, versus doing it on our own. We'll make those balanced trade-offs as we build, continue to build out the business. Right. Right. Certainly. And you did touch briefly on decarbonization. So could you give us just an overview of what your decarbonization goals are and how they fit into your spending plan? Yeah. Yeah. It's an important question because, as I mentioned in some of the opening remarks, we're a unique company in that we can actually invest in the circular economy. And that's unique. And so we established our science-based targets in 2023 through the initiative, Scope 1, Scope 2 down 50%, Scope 3 down 30%. And as we shared at our Investor Day, now we've got a line of sight to it on Scope 1, Scope 2. We know the investments that we can and will make to achieve the vast majority of those Scope 1 and Scope 2 reduction goals. And there will be, you know, some capital investments within the 5%, not above it, that we'll make and we'll be able to get there. And so, you know, larger scale investments inside of that decade of work, recovery boilers that, you know, dramatically increase and decrease our fossil fuel consumption at our wood fiber facilities, as an example, warehouses that run and better very high productivity, very limited people intensity reduces the impact on that. And so we've got a great roadmap that is unique for us. And it's highly beneficial to our customers. We play a very real role in our customers' Scope 3 expectations. And so that's a big deal, because they're looking for things to point to that they can put their arms around, and a 50% you know reduction for us in greenhouse gases over the next decade. And there's benefit to our customers. And we'll, we'll go down the path too of, of acquiring more renewable energy when it comes to the electrical side of the business. We've got line of sight to some of those, how that's gonna play out as well, particularly in Europe where we don't have as much of a lever to pull like we do with our wood fiber mills here, in the United States. So I think we're a bit unique in that we actually have the path. We can point to the projects. They're known. They're in our Vision 2030 expectations. And we plan to execute against them. Well, thank you. Are there any other audience questions? Anything out there? Okay. Well, we're winding down time here. So we're gonna finish with a quick lightning round. Now these are where I give you a question, and you just say the first thing that comes to mind. This oughta be good. So at your Investor Day, you did change the way that you talk about the business or certain words that are no longer in the vernacular. So randomly, what's one word that rhymes with disintegration? information. Oh, that's a good one. Maybe not a perfect rhyme. Okay. Well, that's a good one. 'Cause I wasn't gonna say the word. You didn't say what you wanted to say. 'Cause I didn't do it. That's a good one. But I would say information. And, you know, I'd just play that out for you. Our team did a phenomenal job of bringing together our Investor Day. And we were at the New York Stock Exchange. They do a great job of capturing it. And so if you haven't had a chance, I'm not sending you out to our website. But everything we kinda talked about today is out there. It's in 20-minute snippets, just to kinda pick up on if you want, you know, Michelle Fitzpatrick, who did a great job of talking about our the ESG goals and the like. It's out there. And so take advantage of it. It's good. It's well done. And so yes, that's information. Go find something. It didn't take the bait. Lastly, 2024 price cost equals? Yes. Okay. Yes. There will be a price cost. Fair enough. Okay. Well, with that, Graphic Packaging, thank you, everybody. Thank you. Steve, thank you. Thank you.