Good day, and thank you for standing by. Welcome to the Sonoco Fourth Quarter 2022 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press star one one on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star one one again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today Lisa Weeks, Vice President, Investor Relations and Communications. Please go ahead. Thank you, Operator, and thanks to everyone for joining us today for Sonoco's fourth quarter 2022 and full year 2022 earnings call. Joining me this morning are Howard Coker, President and CEO; Rob Dillard, Chief Financial Officer; and Rodger Fuller, Chief Operating Officer. Last evening, we issued a news release highlighting our financial performance for the fourth quarter, and we prepared a presentation that we will reference during this call. The press release and presentation are available online under the Investor Relations section of our website at www.sonoco.com. As a reminder, 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. Please take a moment to review the forward-looking statements on page two of the presentation. 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. For today's call, Howard will begin by covering a summary of 2022 performance. Rob will review our detailed financial results for the 4th quarter and the full year, along with Rodger Fuller, will discuss our guidance update for the 1st quarter and full year of 2023. Howard will provide closing comments, followed by a Q&A session. If you will please turn to slide four in our presentation, I will now turn the call over to our CEO, Howard Coker. Thank you, Lisa, and thanks to all of you for joining our call this morning. We really look forward to sharing our transformational results for the past year and provide our outlook for 2023. As we look at 2022, it was a pivotal year for Sonoco, where we made significant progress on a strategy to continue growth as a world-class packaging company with a portfolio of highly engineered and sustainable products to support our customers. When I took this role three years ago, we started on a journey to fundamentally change the trajectory of long-term profits of the company. To do that, we had to take a pretty complex business and simplify both our portfolio and the way we run the company to drive improved growth and profitability. These changes were necessary for us to deploy capital more efficiently to our larger core business units and to better integrate acquisitions. In fact, the metal packaging acquisitions were the largest in the company's history, and performance and integration are well ahead of schedule. In parallel, we worked hard on commercial excellence to reposition pricing to less volatile indices while improving the timing of recovery for higher manufacturing costs. It's taken several years, but the efforts of these programs are reflected in our 2022 results, and we expect them to continue well into the future. In 2022, we saw strong year-over-year performance, in which revenue grew 30% to $7.3 billion. Base EBITDA grew 51% to $1.15 billion, and base earnings per share grew 65% to $6.48. These records obviously were a record in the 24-year history of this company. I couldn't be more proud of the team for these results, which were achieved in another year, which was nothing short of chaotic. All while staying true to the mission of Sonoco and further advancing our ESG and sustainability initiatives, which are intently aligned to the values of this company and a part of our everyday lives. With that, I'm gonna turn it over to Rob to take you through the financial results and our forward guidance. Thanks, Howard. I'll begin on slide six with a review of key financial results for the fourth quarter. Please note that all results discussed will be adjusted to base, and all growth metrics will be on a year-over-year basis unless otherwise stated. The GAAP to non-GAAP EPS reconciliation can be found in the appendix of this presentation as well as in the press release. The fourth quarter and full year 2022 financial results again represented Sonoco's ability to deliver strong results from our core market positions despite challenging market conditions. Sales increased 16.5% to $1.7 billion in the fourth quarter. The sales growth was driven primarily by the Sonoco Metal Packaging acquisition and an 11.5% increase in price as strategic pricing efforts continue to both offset inflation and reflect the value we provide our customers. Volumes in the fourth quarter declined 8.5% due primarily to declining demand in the global URB and converted paper products markets and also due to soft consumer volumes, particularly in the last weeks of the quarter. Base operating profit increased 34% to $184 million, and base operating profit margin increased 145 basis points to 11%. This strong performance was due to strategic pricing that offset inflation and a lack of operating leverage due to low volumes. While metal packaging was important to these results, excluding metal packaging, operating profit would have grown 28% and operating profit margin would have been 12.2%. The base EBITDA increased 31% to $241 million, and base EBITDA margin increased 160 basis points to 14.4%. This margin improvement has been strategic and is backed by ongoing portfolio management actions, footprint optimization activities, value-enhancing capital investments, and structural transformation. These actions have enabled a reduction in SG&A as a% of sales from 9.8% in 2020 and 8.8% in 2021 to 8% in 2022. Importantly, we have reduced this metric while also investing in our commercial, operational, and supply chain capabilities. Finally, base earnings per share increased 28% to $1.27. This increase in earnings was attributable to strong operating performance, offset by $0.04 of negative FX and enabled by a lower tax rate of 21.3% in the quarter. The sales bridge on slide 7 provides the primary drivers for growth in the quarter. Volume mix was negative $123 million or 8.5%. Consumer segment volumes were down primarily due to consumer inventory management and weather in the fresh food businesses. We view these effects as transitory and not a trend. We do not anticipate they will continue in the first quarter. Industrial segment volumes also down in the quarter and continued declines in Europe and Asia. U.S. industrial volumes also declined, particularly due to their exiting of the corrugated medium market. Price was $166 million positive, up 11.5% on the fourth quarter. Our pricing performance continued to reflect strategic pricing efforts associated with our commercial excellence strategy, mainly selling to value and managing contracts to recover inflation. Acquisitions increased $239 million, driven by metal packaging and our first month of Skjern. The integration of Skjern is ahead of schedule, and we're excited about both adding new team members in Europe and our expanded capabilities that serve consumer end markets. The base operating profit bridge illustrates our improving profitability in greater detail. Volume mix was negative $35 million, primarily due to lower volumes in industrials. Price cost was an $87 million benefit in the quarter. Consumer had strong price cost performance, generating $16 million of favorability, primarily from RPC. We achieved $66 million of positive price cost in the industrial segment in the fourth quarter. The strong price-cost performance was due to contractual pricing mechanisms and historically low OCC costs. OCC averaged $38 per ton in the quarter versus $123 per ton in the third quarter and $183 per ton in the fourth quarter of 2021. In 2022, we achieved a record $340 million of positive price cost. These figures exclude Metal Packaging, which was accounted for in the acquisitions. Acquisitions and divestitures generated $9 million of base operating profit in the quarter. As Metal Packaging continues to perform as expected, margins in this business were lower than previous quarters due to normal seasonality associated with food can volume and lower volumes in aerosols associated with inventory rebalancing. Other impacts on the quarter were -$8 million due to higher depreciation and FX headwinds, which specifically impacted operating profit $5 million in the quarter. Slide eight has an overview of our segment performance for the quarter. Consumer sales grew 49% to $879 million due to a metal packaging acquisition and strong price performance, only partially offset by negative volumes of 2.5%. Volumes would have been generally flat, excluding the impact of weather and plastic foods and mix from exiting ice cream segment in RPC Europe. Consumer operating profit grew 37% to $85 million in the quarter. Operating profit margin declined 83 basis points to 9.7%. Excluding metal packaging for comparison purposes, consumer operating profit margins would have been 11.9% at 139 basis point improvement. Industrial sales declined 8.9% to $597 million due to a 15% decline in volumes. Volumes weakened throughout the quarter due to customer inventory management and lower end market demand in more economic sensitive regions and segments. Operating profit grew 34% to $79 million as price cost offset low utilization. Industrial pricing is holding as pricing mechanisms are now oriented to overall inflation recovery and value delivered rather than OCC prices. Operating profit margin increased 422 basis points to 13.3%. All other sales increased 2.5% to $200 million, and operating profit increased 24% to $20 million. Growth was driven by strategic pricing and overall stable volumes. Moving to Slide 9, we have our record full year 2022 financial summary. Revenue grew by 30% to $7.3 billion, driven by acquisitions, volume in consumer packaging, and strategic pricing. Base operating profit increased 63% to $920 million, driven primarily by positive price cost and acquisitions. Base EBITDA rose 51% to $1.15 billion, and base EBITDA margins expanded to 15.8%. Last, our base EPS for 2022 grew by 65% to $6.48. We also announced the acquisition from WestRock of the remaining equity interest in RTS Packaging and one paper mill in Chattanooga, Tennessee. In light of the current status of the regulatory review process, we now expect the closing of the acquisition to occur in the second half of 2023. Turning to Slide 10. Our capital allocation framework is aligned with our business strategy to drive value creation for our shareholders. Our priority is to allocate capital to high return investments in our core businesses to drive growth and improve efficiencies. From a free cash flow perspective, we remain focused on increasing the dividend, which at present is $0.49 per share on a quarterly basis, or a greater than 3% average yield over the past 12 months. We paid $187 million in dividends in 2022. After capital investments in the dividend, we prioritize investments in accretive M&A transactions aligned with our long-term strategy. We prioritize our access to capital and retaining our investment-grade credit rating. For the quarter, operating cash flow was $87 million, and capital investments were $88 million. For the year, operating cash flow was $509 million, and capital investments were $319 million. On Slide 11, we have our 2023 guidance. For the first quarter, our EPS guidance is $1.15- $1.25. Our full year 2023 EPS guidance is $5.70- $5.90. Our full year 2023 base EBITDA guidance is $1.1 billion-$1.15 billion. Our full year operating cash flow guidance is $925 million-$975 million. We anticipate net working capital to be a meaningful benefit to cash flow in 2023. Rodger will discuss our outlook on a segment basis. Thanks, Rob. Please turn to Slide 13 for our view on segment performance drivers for the first quarter and the full year of 2023, which supports our guidance. Across the consumer segment for the first quarter of 2023, we expect sequential volume growth in all products, including metal cans, rigid paper packaging, and flexibles. The only exception we expect is plastic packaging for fresh fruits and vegetables, which continues to be hampered by weather issues. On a year-over-year basis for Q1, we expect to see positive volume driven primarily by the one extra month of metal packaging sales as we close the acquisition at the end of January in 2022. For first quarter earnings, we have projected headwinds in our guidance from lower steel prices and are managing through other raw material costs and availability issues with energy, adhesives, and laminates. For consumer during the first full year of 2023, we see volume increases year-over-year across the portfolio, including mid-single-digit volume increases in our metal can business. We're continuing to invest for growth and productivity, led by the increasing demand for sustainable packaging in our rigid and flexible packaging businesses. In our industrial segment, we see continued softness in volumes globally in our converting and trade paper sales in the first quarter. In North America, protective packaging for appliances and household goods remains weak. We expect little near-term recovery for products that support residential home building and construction markets. We're monitoring the Europe and Asia demand recovery carefully, as this will be critical to the overall volume outlook in industrial for the full year, which at present, we believe, will be down low single digits versus 2022 levels. Like Howard mentioned, with transitioning our contracts to more stable indices, putting in better cost recovery mechanisms, and current lower input costs on OCC, our pricing in industrial remains stable. Even with the most recent modest decline of $20 a ton for URB on the RISI index and some expectations of modestly higher OCC costs in 2023, we expect positive price cost benefits this year in industrial. With planned downtime in our global paper operations, we continue to maintain reasonable backlog levels and are ramping up all paper grades on our No. 10 machine in Hartsville. In our all other businesses, we continue to have net stable volume demand across this collection of businesses. With improved productivity and favorable pricing actions, we expect slight increases in profitability for the all other segment this year. As we look to 2023, we have a keen focus on all forms of productivity as we see the benefits of fewer supply chain and labor disruptions. Over the past several years, we've taken decisive actions to help offset inflation and build resiliency in our operating model. The same time, we've invested capital in our core consumer and industrial businesses to position us for long-term growth and profitability. With that, I'll turn it back to Howard. Okay. Thanks, Rodger. If you would turn to slide 15. You know, the base earnings per share view visually demonstrated here clearly shows the step change in profit improvements for Sonoco. Our full year results include the benefit of metal pricing overlap of the company, which was approximately $0.53. Without this benefit, you would still see a very strong, roughly $6 per share earnings for the period. Since 2022, the high return investments we've made while reshaping the portfolio and improving the operating model have also resulted in an expected 15% CAGR in earnings per share through 2023, based on the midpoint of our 2023 annual guidance. 2022 was a year of progress, we are only just beginning. We intend to grow profits through organic and M&A investments, as well as a better efficiency in how we run the business day in and day out. In closing, if you turn to slide 16, we carry sustained momentum from our strategy and operating model into the new year, which we believe positions us well to navigate near-term volatility. We expect stable operating performance in the coming year, where the midpoint of our base EBITDA guidance is essentially the same as last year. Let me be clear, the operating environment does remain very tough right now, our expected performance reflects our better portfolio and business mix that is expected to be less volatile through business cycles. We expect the first quarter to be the low water mark for the year based on our customer forecast, with improvements to the second and third quarter, concluding the year with a more seasonal Q4. With improvements in working capital, we expect free cash flow for the year to be at the midpoint, around $600 million. We also remain focused on $180 million of incremental base EBITDA improvements through 2026 based on additional actions planned to further improve our core businesses and refine of our operating model. As always, for Sonoco, capital allocation remains a cornerstone of our strategy, and we intend to continue increasing dividends while maintaining an investment-grade balance sheet. In 2023 and beyond, we're focused on improving returns on invested capital through organic investments in core accretive acquisitions and through further portfolio rationalizations. I have never been more positive about the long-term outlook for Sonoco. At this time, we would be pleased to take any questions that you may have. Thank you. As a reminder, to ask a question, please press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one one again. Please stand by while we compile the Q&A roster. Our first question comes from the line of Kyle White with Deutsche Bank. Your line is now open. Hey, good morning. Thanks for taking the question. Correct me if I'm wrong, but I think in the, in the food can business, I think you said you expect mid-single digit volume increases for this year. You know, what gives you this confidence? Curious what is driving that, just as we look at some of the industry data that shipments have been frankly a little bit weaker than that. Thanks, Kyle. It's Howard. Yeah, we're talking from a sequential perspective, and, you know, we just have visibility of that through conversations with our customers, their expectations. You know, a bit of share lift, but, you know, that's exactly what our customers are reflecting to us, and that's what we're building into our models. Got it. sorry, was that you're saying it's a sequential uplift on mid-single digits, not a year-over-year? Well, year over year. Yeah. Okay. Okay. Within that business, just to follow up, can you remind us what the impact was from the sell-through of lower priced steel inventory last year, and then maybe what you're projecting as a headwind in 1Q and possibly 2Q from that impact? Yeah. For the full year last year, it was $0.54 of detriment. There's actually, because tin plate is declining this year, you know, 10% or so, there's actually gonna be detriment as well this year from metal price overlap from the inventory we've carried over. We think that'll be an incremental $0.20-$0.30. Got it. Thank you. I'll turn it over. Thank you. Our next question comes from the line of George Staphos with Bank of America. Your line is now open. Hi, everyone. Good morning. Thanks for the details. Congratulations on the progress in 2022. I wanted to hit on consumer trends that you're seeing. You know, you talked about, you know, some inventory management by your customers at the end of the quarter. Can you talk about what they're seeing and what you're seeing as you're entering 1Q across some of your key, either end markets and product lines? If you would, try to differentiate, you know, in the center store, paper versus plastic. We get that, you know, plastic for fresh is having its issues, but center store, what are you seeing in terms of your paper board consumer packaging versus your plastic-based packaging? George, let me try to hit on that, and Rodger, if you've got any follow-up. What, you know, it wasn't just on the consumer side, it was across the entire portfolio that we just saw tremendous, you know, breaks, hit, towards the latter part of last quarter. I think that's across all industry, actually. Yep. You know, on the consumer side, we were, you know, we were being told that that really is a, you know, a reflection of inventory drawdowns, et cetera. As we've entered the quarter, we have not, you know, finished out and closed out our January. Looking at the top line, pretty impressed with the comeback that we're seeing across the board. You know, the plastic side, you know, the real issue there is the weather events, both in Florida with the freeze and in California with the floods and the impact on the fresh produce. No, we're seeing, you know, really, really solid signs and reflecting, I think this year somewhere in the neighborhood of a 4%-5% type lift year-over-year on the consumer side. Coming out of the gates, pretty impressed with what we're seeing right now. Rodger, you got anything to add? No, you hit it, Howard. I think, you know, the modest declines in the rigid paper cans in the fourth quarter, George, as Howard said, seeing a nice recovery in January. Really nice, another nice quarter by flexibles, 4% growth in the fourth quarter, budgeting something 5% for the year and expect more of the same as we head into next year. The pressure really was from our plastics business. Understood. That's very, very helpful, guys. Secondly, can you talk to what benefit, realizing it's a moving target, it's gonna be based on the evolution of the market, evolution of your inputs, but what benefit we should expect for Sonoco from commercial excellence this year and other self-help measures and, you know, where we stand in terms of ultimately realizing the targets you would have on both of those during the transformation? George, Roger again. Commercial excellence, I mean, you saw it, you see the results from last year on price cost and, you know, frankly, that's from a couple of years of really hard work around commercial excellence. We talked about what we see in the guidance for the next year from a price cost standpoint. Those efforts continue and continue to pay off, and you can see it in our operating margins. On the self-help side, really it's all about productivity. As you look at 2023, you know, we expect our productivity results to return to more historical levels and then probably plus some with the easing of supply chain and labor issues. I mean, George, you know our historical levels of productivity as well as anyone. We expect to get back to those levels and beyond. The self-help, the structural transformation we did this year is paying off from the operating margin standpoint. I think across the board, we're still confident in that $180 million over the next, over the next several years. Again, George, let me just add on to that and not just talk year-to-year and really the journey that we've been on. I know there's a lot of folks on the call that are pent up to either ask or thinking about, okay, we're slowing down. You are in a paper business, you haven't performed extremely well or well at all historically in recessionary type environments. I just wanna touch on, you know, what, you call it self-help, whatever you wanna call it, but the amount of focus and energy that we've put over the last four or so years in terms improving our performance in our industrial sector. I think you can see that sequentially in terms of the returns that we've demonstrated over the periods. If you look at the profile of the company now, and you take, you know, No. 10 machine is one that's an interesting conversation. You know, of course, we've spent a lot of time talking about it, but creating the lowest cost, URB mill in North America, certainly within our network on a global basis, and the productivity that's gonna drive and how that is going to be attracting volume from our higher cost mills, and then we're seeing that happening now, so the benefit from that. The unseen benefit that we haven't spent a lot of time talking about is controlling what we can control to reduce the amount of variability, within this business. Getting out of corrugated medium, I cannot tell you how volatile being in that market with such a small machine, non-vertically integrated, that has been for us over the course of the last, call it 8- 9 years within the company. You add to it the amount of effort on a global basis in terms of consolidations, again, focusing only solely on industrial right now, really right sizing our locations, the investments we've made in automation. I've said it before, and I'll repeat it, and it sounds like it feels like we are in a recession from our perspective on industrial, that we're in a much better position today than we have ever been, and we do not expect to see the type of variabilities that we saw pre-engaging in the activities this global team has put forth. Sorry for the dissertation, but I know there's gonna be questions about that. You know, we just, you know, it kinda gets frustrating when you just look at quarter to quarter and what you do yesterday versus tomorrow and not look at the long runway of efforts that this global team has put in place to create the appropriate level of margins that we deserve for the value we generate for the market and our customers. Howard, we appreciate that. My last quickie is a great segue to that. Within industrial, within paperboard, you talked about the change in the contracts, commercial excellence and productivity. Can you give us some guardrails, i.e., if prices drop in the published indices by X or OCC goes up by Y, what that might mean to the business on a going forward basis so that we also are managing our forecasts, you know, with less volatility or more accuracy? Thanks, I'll turn it over. Yeah. Thanks, George. What I would say is, we have assumed that price is going to moderate by X and cost is gonna go up by Y, and that's built into what we feel like is gonna happen this year. That's probably the best I can do there. All right. Well, That's a good question. I get it. We have, and I want folks to understand that, you know, we feel like there's going to be some moderate pressure on price, and there's going to be OCC cannot stay at $35, so we've built an upward look and impact to that in our go forward models. All right. I'll turn it over to the other folks. Thanks. Thank you. Our next question comes from the line of Cleve Rueckert with UBS. Your line is now open. Hey, good morning. Thanks for taking our questions. I wanted to follow up on the industrial business, while, you know, while we're talking about it. I'm just curious how much visibility you have into the industrial backlog, you know, just sort of given what you know about it right now, whether there's the potential for any volume growth in 2023, or if you know you have sort of visibility on a longer-term basis. Howard, you know, maybe you just sort of mentioned what are the, what are the puts and takes? You know, I know there's some transition going on in that business, but if you could give us some help on, you know, what you're seeing for volume growth overall on the plan, that would be helpful. Yeah, on the backlog question, this is Roger in Industrial. You know, if you look at the fourth quarter, you know, our capacity utilization across our paper business was in line with the published numbers of the industry. As I said in my opening comments, you know, we did take some lack of business downtime in our global paper system, more in Asia and Europe than the U.S., and some maintenance downtime to match market demand. We're seeing that continue at about the same levels in January. You know, as far as we can see, we think we've reached the bottom there, and we're starting to see some slight change to that and movement in the right direction. Again, in our guidance, we're projecting year-over-year down a couple percentage points for Industrial based on what we saw. If you remember, our first two quarters of 2022 were down around 2% year-over-year. The real deceleration happened in the second half of the year. We expect it to turn the other way. Our toughest volume quarter should be the first quarter. We expect some recovery. Yeah, I think what we're seeing around the world, it looks like we're at bouncing around at bottom, at least the first part of January, expecting to see a bit of a turn back. Cleve Rueckert, can you explain deeper what you mean by transitions beyond what I shared earlier? I don't wanna repeat what I'd shared under George Staphos's guidance. I'm just wondering how much, you know, how much headwind you have coming out of, out of containerboard and, you know, whether there's some other businesses that are growing. I, you know, I'm just wondering what that balance is. If you, if you can't share any more, that's fine. Yeah. That's a good question, Cleve. We definitely look at all the various end markets, and we do sell into a number of end markets and a number of kind of final end markets. We've done a really deep analysis on where that URB or the product that's made or facilitated by that URB product ends up going. It's a lot more, you know, I'd say that those are much more consumer and stable end markets than you would anticipate, you know, with things like containerboard or tissue and towel in there in a meaningful way. That's been a part of our strategy is to manage the mix, and one reason why, you know, we bought RTS, or we are in the process of buying RTS, and one reason why we like Skjern is because it gives us access to really utilize the utility and the sustainability profile of URB in new markets, that we think have some, you know, final growth and long-term opportunity. Cleve, you know, that's one of the things that the team is working on now. We keep talking Industrial, it gets a connotation that it's pure Industrial. When you really get into it, there's a huge consumer connection. Roughly 30%, I think I'm saying this correctly, 30% of our URB ends up in trade sales, tissue and towel sector. You wouldn't define that as Industrial. We owe it to you guys, and I know Lisa and the team were working on helping you guys better understand the true nature of cyclicality that would tie to an Industrial type slowdown. That makes a lot of sense. That's pretty helpful. It sounds like maybe more stable, you're driving towards a stable, less volatile run rates as we move through. That's the strategic direction that we are continuing to focus on, yes. Right. I'm sorry if I missed it earlier, but I just, you know, just sort of recapping at a higher level on the guidance. You know, you talked about sort of, you know, I guess in 2 of the three segments, flat to up volumes. Sounds like price cost is expected to be positive pretty broadly. You know, ultimately margins and earnings are falling a little bit year-over-year. You know, I'm just wondering if you could lay out just, you know, at the high level what the negatives or what the headwinds are. I don't want to belabor the negative aspects of the guidance, but just, you know, so we know what the puts and takes are. Yeah. I can give you that color, Cleve. Consumer volumes, really excited about the volumes this year, mid-single digit positive across the board, across the various businesses. All those businesses have, you know, great consumer-oriented strategies. Price cost in consumer is actually gonna be meaningfully negative, and it's because of this metal price overlap that we talked about, the $0.54 from last year and then another carryover this year from the de-deflation that we're having in tin plate. That will be actually a pretty meaningful negative price cost. We're also anticipating that resin prices will kind of turn over in the year, and that will provide some price cost headwind as well. Consumer will actually see, you know, relatively meaningful negative price cost, which is a big driver for the bridge, you know, between last 2022 to 2023. You know, Industrial volumes, yeah, we think they're gonna be down low single digits. Price, you know, as we've talked about, you know, down kind of that low single digits, but not in such a meaningful way that price cost will be a meaningful headwind for the year. You know, the other business, you know, it's got so much diversity in it, the way to really characterize that is normalizing end market trends. Taking cost out of those businesses should result in some pretty meaningful operating profit improvement. Then, you know, there's just normal way headwind from non-operating items like depreciation and amortization going up $32 million, interest going up and tax kind of normalizing to the statutory levels that we project at. Got it. Thank you very much. That's it. Thank you. Bye-bye. Our next question comes from the line of Mark Weintraub with Seaport Research Partners. Your line is now open. Thank you. Just to clarify, I think you've stated it, but, if the metal pack overlay benefit was $0.54 last year, and you're looking at $0.20-$0.30, are you expecting like a negative -$0.74 to $0.84 comparison from metal pack overlay 2023 versus 2022? Is that the way to understand it? Are we just giving up $0.20-$0.30 of the $0.54? Yeah, it's not just Metal Pack because there was, you know, we did have a pretty meaningful tin plate business in RPC. Yeah, but that is discreetly the impact of the positive going away and the negative coming in. Got it. That $6.48, we can actually back off. As we're bridging to the guidance, we can back off $0.74-$0.84. That's a, as you say, that's a very big part of the seeming bridge. I'm getting that right, correct? Right. When we normalize it, I, you know, I think that there's opportunity there from normal operating conditions versus, you know, just kind of taking it away and saying that was all one time. Well, would we just add back the $0.20-$0.30 to get to normal? Or, is there something above and/or different from that? I don't think we've modeled it that finely, but we definitely have a lot of productivity in that business. Okay. I guess the other elements of the. Thanks for the bridge in the last question. I guess M&A with RTS was told that maybe that's not so big, but how impactful M&A and self-help as we're thinking about the bridge is that in the calculation of what you think 2023 will be versus 2022? Yeah. RTS is not in our forward-looking numbers at this point in time. As, I think Rodger said, maybe Rob earlier, that, you know, we hope to have that closed by mid-year, second half of the year. We haven't built that in. Only, I think Skjern, of course, closed late last year, and it's nominal. Okay. Super. That is helpful. I guess one last try and understand the sensitivity, but on the URB, can you share with Are the contracts still tied directly or indirectly to indexes? Is that not even how your product is getting priced anymore? No, it's Rodger. Yes. Yes. If you look at, in general, our total URB tons, about 60% or so is tied to the RISI tin bending index. 20% or so is still tied to OCC moves. The final 20% is open market. Super. That's very helpful. Thanks so much. Thank you. Our next question comes from the line of Adam Josephson with KeyBanc Capital Markets. Your line is now open. Thanks. Good morning, everyone. I hope you're well. Rob, just a couple of clarification questions to start off, if you don't mind. The mid-single digit consumer volume growth that you're expecting, is that organic? It just seems like I don't remember the last time consumer volumes were up mid-single digits in a year. I would think that would be a multi-year high growth rate amid these pretty weak conditions. Just trying to understand that volume expectation a little bit better in consumer. Hey, Adam. Howard, let me handle at least the macro view of that and let Rob take over from there. You know, we've talked really the last several years, and you can see it in our capital spend pool of how much new growth capital we've put towards our overall businesses that has been disproportionately weighted against the consumer side. We've just got known. I mean, we've got a launch that's going national right now and a new line in Chicago. It was actually, I was watching Squawk Box this morning and the CFO of the company was touting the new product. We've got a lot of things going on within our legacy businesses that give us great confidence in terms of what we're forecasting. You take the big hit we took in the end of the fourth quarter and that 4%-4.5% tangibly in terms of new growth opportunities, organic, that we've talked about in terms of how much capital we're deploying around the world, as well as a bit of falseness towards the end of the fourth quarter that gives us great confidence there. Rob, I don't know. Yeah. Adam, it's obviously an incredible focus of the business to develop the right strategies and really invest behind them. You saw that with the flexible business, which has mid-single digit growth throughout last year, even in December with, you know, the difficult market conditions that everybody saw. We've done this. We've got, you know, new leadership in the global can business and a really unified strategy. I'd say most of the regions in the world are growing high single digits, and Asia is growing double digits in paper cans. We're really excited about bringing innovation to that segment, and enabling our customers to launch new products there. Plastics is another area that, you know, I'm really, you know, we've invested behind, and they've started to really grow. Each one of those businesses has, you know, mid-single digit growth prospects, and we're anticipating that will come through this year. Wow, okay. Just to be clear, for the total company, Rob, what is roughly, what is your volume expectation for the year? I assume you're assuming up something, even with industrial being down. Yeah, up 1%-2%. One to two, okay. One other clarification, Rob. On the working capital, you said that you're expecting a meaningful benefit. Can you be any more specific than that? Well, you know, I think that we're targeting at least $100 million of improvement. Okay. Mainly through inventory management. Got it. Lower inventories. Okay. Howard, you know, just you expressed, I think, some frustration about just some of the questions you're getting. I guess from our seat, you know, most, well, really all paper-based packagers had historic price cost benefits last year for reasons you're well aware of. Many experienced, you know, historic margin expansion, as did you. It's hard for us just on the outside to parse out the rising tide lifting all boats versus these company-specific operational initiatives that you have. Is there more help you can give us in terms of parsing those two out and understanding how you're thinking that will shake out this year and thereafter for that matter? You know, first, Adam, I deeply apologize if you felt like I was frustrated. I, I look forward to these calls, like you have no idea each quarter and our subsequent meetings within the quarter. It does become frustrating when, you know... I'm sorry again, yes, the dissertation, as you may say. You know, we, you know, again, going back not too many years ago, 60% of this company was a paper industrial company. It's now in the 30%-35% range. You know, that is a tell in and of itself. I can't answer your question specifically other to say is that, you know, if there is a frustration, the peanut butter spread of your paper company is a paper company is a paper company is trying to give you guys a little bit more color in terms of how we're looking at our segment within the paper industry and how we're doing the things to take away as much of the volatility that we historically have had through those self-help actions that I described. All-inclusive, you know, as I said, we're expecting to see price moderation. We're expecting to see cost inflation. OCC cannot stay where it is forever. We've taken actions over many years to reduce our exposure, be it from ultimate price to our controlling productivity, et cetera. I'm backing down a bit, Adam. No, I just, you know, it's helpful to hear you because again, it really is hard for us to know how much of a rising tide lifting all boats situation this is because we obviously don't have the visibility that you do. Just the last thing, Rob, just back to the volume for one moment, if you don't mind. It, compared to the 1%-2% up for the year, what are your expectations for the first quarter? Just I'm trying to understand how back half weighted that expected volume growth is. Yeah, that's a good question. quarter-to-quarter, you know, I'd say consumer volume growth is coming through now on a year-over-year basis and sequentially. For industrial, we're probably gonna be flat sequentially, you know, with some, with some back-end improvements. We've modeled in our core, our base scenario for that business is that, you know, we're gonna see kind of a flat recession or a soft landing and then some recovery in the second half of the year, which we think is the consensus from most sources. The other businesses are expected to and are, and we're seeing kind of a good start to the year that will, that will flow through the full year. Thanks very much. Thanks. Thanks, Adam. Thank you. Our next question comes from the line of Ghansham Panjabi with Baird. Your line is now open. Hi, good morning, everyone. This is Matt Krueger sitting in for Ghansham. Thanks for taking my questions. You know, you highlighted customer inventory destocking on the consumer side of the business late into the fourth quarter, but it doesn't sound like there's any expectation for lingering impact or carryover in the first quarter. Are you seeing real-time improvement here already? It seems like a quick inventory destock cycle. Can you just talk through some of the dynamics that you've seen in that business and why the confidence on such a quick improvement in the first quarter here? This is Rob. I don't know if I'd even describe it as a quick improvement, but as I think Rob's already said, if you look at our rigid paper can business globally, we're seeing strength as we head into January, a lot of it's coming from the investments that we made in capacity expansions and some new products that are being introduced. The paper can business looks up for the first quarter, and what we see after 1 month is meeting expectations. Flexible is also, just like the fourth quarter, continues the strong growth. We expect another strong year from flexible. Their volume's coming in. They're winning new. They're putting new products into the marketplace, and we're seeing that as additive in the first quarter. We didn't own the metal can business the first quarter in January of last year, but we have seen recovery. Our metal food can business is strong. In that case, we assume it was just inventory reductions the end of last year. If you look at aerosol last year, you know, we're somewhat heavily weighted to a couple segments, like disinfectants, spray paints, you know, that built up inventory through COVID, and they worked that off last year, so we're seeing some recovery there as well. Again, the only exception is our primary store plastics business for fresh fruits and vegetables continues to be very soft. Other than that, we've seen a nice start in consumer to the year from a volume standpoint. Okay, great. That's helpful. Then, you know, switching over to the cost side of things, what do you expect from cost inflation overall for 2023? You know, what do you expect from cost inflation for the raw material basket specifically? Then can you talk through some of the, some of the key constituents and the dynamics there for the upcoming year? Thanks. Yeah. I mean, we have our base case assumptions for what we think is gonna happen for cost. I can tell you kind of discreetly with a couple segments. I mean, resin, we're anticipating that down with a front-end orientation really kind of driven by a broad basket that we buy. You know, it's a, it's a meaningfully broad basket that we buy. We anticipate that's gonna be down, you know, high single digits to double digits. OCC, you know, obviously less important than it has historically been because it's not really driving price, but as a cost factor, you know, we've talked about kind of the meaningful deflation that we saw at the end of last year. We think that that'll somewhat recover just to a normal level because the handling cost around OCC is probably $60-$80 a tonne. We think that it has to go up to that kind of level in order to just have some stasis. Otherwise, you know, things that you should know is just, employee, you know, variable labor has definitely gone up, and we're anticipating it to go up, and that will be an inflation headwind through the year. You know, other kind of costs like fixed and depreciation will also be going up. Got it. What does that net to for the overall inflation budget for Sonoco? You know, we don't I mean, we look at kind of business by business, and we also measure it against kind of where the price and the ability to get recovery on productivity is. We don't have a discrete number that I have off the top of my head, but we can definitely follow up with you. Great. That's it for me. I'll turn it over. Thank you. Thank you. As a reminder, to ask a question at this time, please press star one one on your touchtone telephone. Our next question comes from the line of Anthony Pettinari with Citi. Your line is now open. Good morning. Just a couple follow-ups. I guess on the industrial segment, and the volume guidance for industrial volumes, down low single digits for the full year. Apologies if I missed this, but is there a specific view on volumes for 1Q on a year-over-year basis? It's gonna be, you know, flat sequentially, which is kind of about the same magnitude down as it was in fourth quarter. Okay. Okay. On RTS, you know, there was some discussion of synergies, I'm just wondering, you've been kind of minority owner of that for a number of years. If you could talk to maybe sources of synergies or maybe just more broadly, how you can run that business, differently, now that you're the full owner. Well, we're not the full owner yet. We're anticipating closing it in the second half of the year. We're excited about that, you know, project as much as we ever have and anticipate the synergies will be, you know, justify the transaction. Okay. Well, that's helpful. I'll turn it over. Thanks. Thank you. Our next question comes from the line of Gabe Hajde with Wells Fargo. Your line is now open. Howard, Roger, good morning. Good morning. I'll leave the Plato references out, I guess, but just from a philosophical standpoint, you know, you guys did a really good job in 2022. You were able to kind of beat and raise over the course of the year. Given kind of the economic backdrop, uncertainty and, you know, some of the headwinds that you're facing in tinplate, I guess what some of us are trying to struggle with is, you know, why be aggressive sort of seemingly out of the gate again when Q1, you know, is a little bit below? You know, or and/or what gives you the confidence? I mean, you know, you've mentioned conversations with customers, but, you know, just from our vantage point, there's a lot of uncertainty. Maybe then from a geographic perspective in industrial, maybe there's a knock-on effect from trying to reopen and that's why you're feeling better about the second half. Just anything from a geographic standpoint that you can talk about. Sure, Gabe, it's Howard. I'm gonna let Rob answer the bulk of the question just to say, just so you understand, I mean, as we build our bottom-up budgets, we do a very, very thorough, go through a very, very thorough process with all of our business units and understanding the puts and takes that they see in their individual businesses and their markets. We, we stress test that, so that when we have these conversations and these forecasts, based on what we know today, these all feel like very realistic targets for the coming years. Rob may be able to get a little deeper into that, but, you know, this is not, you know, lick your thumb and see which way the wind's blowing. I mean, we put a lot of effort over the fourth quarter to. Manage it almost up until the day of announcement of what we think from our team's perspective, what we're seeing from a macro perspective, and what our customers are telling us. Rob, I don't know if you have more to add in that? Yeah, we feel really good about the budget and the guide. We think that it's very balanced. We think that there's obviously opportunities that we go after every day, but there's certainly risks that we've seen in the last, you know, 2-3 years like we've never seen before. I'd say, you know, with regards to Q1 and then thinking about the full year is, you know, a big part of that really is this Metal Packaging impact, you know, and that that business has seen absolutely unusual inflation and now deflation, which has really meaningful bottom line impacts. As I said, you know, Q1, you know, total impact just from Metal Packaging is gonna be, you know, $0.50-$0.60. If you took that away, you know, we would almost be at the 185 that we were at last year. You know, I think that, you know, industrial certainly has, you know, some impact there, but we're anticipating kind of a good year from productivity and a good year from performance. Rolling kind of those, taking that metal price impact off, and then rolling forward because we think that that metal price impact is most acute in Q1, though, with some lingering impacts in Q2, but then completely gone in Q3 and Q4. You can think about our year in that regard and get to the number that's in a pretty straight line. Yeah. I think, you know, just finally, Gabe, you know, slide 14, I spoke to at the end of my prepared remarks. I mean, that's the point here is that we are on the appropriate trajectory without one-time benefits. An unbelievable trajectory with, without the one-time benefits. Look, I won't belabor the point. We're, we're really bullish about the long term with the company and the, and the action that the global teams have been taking over the years that are getting us to this point. Understood. All right. One last one. I don't think we mentioned it or has been mentioned, CapEx being $325-$375. I thought we were sort of thinking about a step down post Project Horizon. Maybe you guys found some other discrete projects in there that you're spending on. You know, it's a big part of our strategy. We've been really focused on trying to identify as many good projects as we could, and we've got, you know, we are in a really good position right now where we've got so many good projects that we're really managing it and really identifying the best projects and the ones that fit our strategy the best. I'd say that's a reflection of that. It's also a reflection of us just being a bigger company than we've ever been before. As a percent of sales, it's still kind of in line with what we would, what we've been targeting. It's also, as a% of sales, a way for us to kind of continually ratchet up what we call value enhancing projects as a component of that spend so that we're getting better and better ROI. Okay. Thank you. Thank you. Our next question is a follow-up from Adam Josephson with KeyBanc Capital Markets. Your line is now open. Howard, just one follow-up. Thanks for taking it, by the way. George asked a question about what you're seeing in center of the store in terms of plastic versus paperboard, any shifts you're seeing from one substrate to the other. Just given that you're uniquely positioned to answer that question, can you, forgive me if you answered and I just, I didn't hear it, but can you address that question? Sure, Adam. You know, it's really where it resonates paper versus plastic and the beachhead right now is really in Europe. We are seeing a lot of opportunities with commercializing where once a product was in a plastic container is now coming to one of our all paper containers. You know, it's, we're just now rolling out the all paper solutions that we developed internally as well as through our acquisition of Can Pa ack several years ago, just as COVID hit. We've got some assets coming into North America. We just don't have the same level of pull here in the U.S. Certainly there's focus and attention on the CPGs. Europe, it's almost a mandate, and how quickly can you get us out of substrate such as plastic or flexibles into an all paper or mostly paper product. Our expectation is that will continue to build on a more enhanced basis here in the United States. We're seeing it in Asia and South America, almost to the equivalent of the situation in Europe. I appreciate it. Just 'cause I read, I think, that the EC was classifying any paperboard packaging with polycoating as technically a single-use plastic, and that was limiting the appeal, at least to some CPGs in Europe. Any thoughts on that issue in Europe and the States for that matter? Yeah. You know, I don't know if I have a good answer for that because it's a moving target and it's by member country in the EC. You know, barriers are required, and, you know, we've been really focused on paper content percentages, and so we've got solutions out there in the market today that are 95% paper that are able to be recycled in the paper stream. Different countries in the EU, there'll be different states that take on different positions here. The reality is, you know, you do need some type of barrier. Our focus is, again, to create solutions that have an easily managed through the recycling systems and programs. We Okay. We're actually seeing a positive reaction, in countries like, the U.K., France, et cetera, with the products that we're putting out in the market today. Thanks very much. Best of luck. Thank you. Our next follow-up comes from George Stathos with Bank of America. Your line is now open. Hi, guys. Just given that Adam have segued that for us, just one quickie then. Why are you comfortable, or are you, that North America won't see kind of a similar impact as you're seeing in Europe in terms of your customers trying to get out of plastic to go to paper? Is it from their research or yours, the consumer here cares less? Is there more confidence about the sustainability merits of the plastic packages you and others are bringing to the, to the market? Maybe it's something else. Thanks, and good luck in the quarter. Thanks for taking the last one quick. Yeah, George, I'd say, you know, it's kinda wait and see here if the U.S. in totality follows the trends in Europe. They're just different, it's a totally different environments right now, and I don't know how to answer that. We're not seeing a lot of pressure right now, but you know, these are fit for purpose solutions. Yep. We've got a lot more, space, and opportunities, to either recycle and/or, other options for waste streams. I'd just say, just watch the space over time. Typically, we do end up following what's going on in Europe. Yeah. Hopefully, EPRs have a good benefit too. All right, guys, I'll turn it over. Thank you so much. Thank you. I'm showing no further questions at this time. I'd like to hand the call back over to Lisa Weeks for closing remarks. Thank you all for joining our call today. If you have any follow-up questions regarding our results, please let us know. We look forward to giving you an update on our Q1 results in May. Thank you all again, and have a wonderful day. This concludes today's conference call. Thank you for participating. You may now disconnect.