Gabe Hajde here, Wells Fargo paper and packaging analyst, joined by my colleague Alex. I'm happy to be hosting Sonoco Products. With the company today is the CEO, Howard Coker, I think serving with the organization for 39 years. We are in the, yeah, 39 years. Appreciate you reminding me of that. Lisa Weeks, Vice President of Investor Relations. So sort of a thematic question that I've been talking to companies about a little bit is we're maybe six quarters into, I'll call it post-COVID burn-off, but just volumetrically malaise in the marketplace. Have a couple different potential explanations as to why, but just generally speaking from your conversations with, or Sonoco conversations with customers on the consumer side, what's driving the weakness? I mean, we obviously went through a sticker shock, some inflation, but before we get there, we'll start with that. And then I know you got some prepared remarks. Yeah, thanks Gabe, and thank all of you for joining us. You've heard it from Sonoco's perspective. The stocking was the order of the day for really all through last year. I would suggest to you now that it's done. And I've talked to several folks through the course of the conference today. If you look at our portfolio and you think of some of the products that we serve, one of which is a heavily used item in aerosols during the COVID period, where people would have been buying as many cans of this product as they possibly could. Those volumes we saw last year, not good from an aerosol perspective, and we're seeing those volumes return. And I think that if you think of all the folks attending this conference, that would be an example of an item that you would think would take a while to work out of the consumer's cupboard. So I think we're done with the stocking. I think the inventories are right at retail, at home, and through the system. You noted on inflation and inflationary impact, and it was the song of the year last year of the success our customers and beyond were having from a profitability perspective and low volume environment. I talked to several folks today. I actually majored in economics, and one of my first lessons was this thing called supply and demand, and eventually it's going to catch up with you. And so what we're hearing from our customers is that, yes, they're feeling the impact of deleveraging now. They're seeing that the environment that was so wonderful in the last 18 months is no longer there. What we're also hearing from our customers, we're seeing in our business some sequential improvements, some year-over-year improvements, but that we should expect to see on the consumer side specifically improvements in volumes as we finish out the year, particularly as we get in the more busier seasons of the year. It's interesting times, but for Sonoco, I can't tell you how proud I am of the team and low volume environments. We've created productivity that, I mean, last quarter's productivity was $50 million, which would have been a good year, $100 million last year. The capital investments that we've been making going back 2, 3, 4 years that are finally, it does take 18 months, 2 years, sometimes longer, are finally starting to fall into place. Just really pleased with the performance of the company and the team during these difficult times from a volume perspective. Appreciate it. I jumped the gun a little bit. I know you had some prepared remarks, but just like I said, thematically kind of thinking about maybe when we can see that inflection, we'll get there. Do you want me to read the non-GAAP? No, I don't. Okay. Everybody, this is our disclosure. Yes. I'll move forward now. This is almost all 2023. All right. Anyway, look, let me just talk quickly about the journey we've been on, and I just touched on it. When I became CEO, now into my fifth year, I felt like Sonoco had become a pretty complicated company. We had, over the last couple of decades, said, "Look, we've got some really, really strong core franchises, and they're not growing at the top line. So let's create, we got to find that next leg of the stool." And these became cash cows. And so we did go on a fairly aggressive acquisition streak there that went on for about, as I said, about 20 years. We looked up as I came in and assembled the team and said, "Look, the fundamentals really are that we are good at what we're good at, and we're making a mistake not investing in our core franchises." And so back in that time period, establishing the foundation, focusing on the future, we started increasing the amount of capital that we were allocating to our core franchises. We went from $180 to $190 million as a $5 billion company to $300 million in capital to, well, this year we'll be in that $350 range. And I already talked to it. We're seeing the payout of that. We're seeing it in productivity. And as we sit here today, and I'll probably talk about this on another slide, that the amount of capital in certain franchises, such as our rigid paper container, our paper can business, a renaissance where we have more growth capital alignment around the world, starting new facilities, installing new capacity, building new machines that will carry that same type of top-line growth opportunity into 2025, 2026, and 2027. We'll continue on that productivity journey in capital. But we realigned the entire company, and we've really gotten down to where we have four segments that we are focused on. We had at one time 20 different P&Ls for down to four. And those are what we defined as being those businesses where we have a right to win every day, and that's where we're going to focus our attention on. So if you followed us, we've made several, several divestitures. The most recent one was in the fourth quarter of last year. I wish I had a product to show you that why. I mean, of this one particular Protective, which was we made bumpers for cars and flotation devices for Sea-Doo and wonderful EPS foam for protective packaging. So it was really we set out and said, "There is," and we tested these 10 businesses that we've parked in all of them. We tested each one and said, "Could it be? Are Are we missing something?" And we said, "No." There's a couple of them that we've pulled back in, but really it's focusing on the core. Lisa, I don't know what we got next. And here's kind of what's happened. We've grown from $700 million+ in EBITDA in 2021 to north of $1 billion. We did an acquisition during this time frame, but it's important to note that most of that improvement came from the foundational businesses. We had an investor day back in 2021, which said that by 2025, 2026, we would be at $1 billion. We did it in three years. The other thing that is really impressive is the margin percent profile is up probably 300 basis points in this time frame. It's sustaining itself and continues to improve. This is who we are. So if you followed us for a while, going back seven, eight years ago, we would have been more like 50/50 consumer industrial. But we've been conscious about where we're growing inorganically, and that's on the consumer side. We're about 60% paper. You can see the reason now that we're in the meantime. Today, and this is not a conscious decision that we're focused on North America, but it is how it's falling out today. $7 billion of revenue. We talked about the EBITDA and the EBITDA percentage. Just to talk about the four franchises, industrial, which was the foundation of the company some 120 year plus years ago. That's our global URB paper tube and core business. We view that as a low single global growth type business. Rigid paper containers, I've touched on that just briefly in my opening comments in terms of the renaissance we're seeing there. High single digits, flexibles and thermoforming. We have combined those two divisions into one. I'm not going to get into that for the sake of time, but it's the right thing to do from a synergies perspective and serve market perspective to do that. Recently added the metal packaging just around three years ago. We have set forth plans in our February Investor Day that we would grow to about $1.5 billion of EBITDA. How we'll get there is really, you can see here organically in the first two and focus on our acquisition opportunities around our flexible thermoforming and our metal can franchise. We have simplified $3.8 billion to consumer, $2.4. We still have an all other. It's not represented here in dollars. Again, we talked about that in our February Investor Day that we still have a few businesses that we intend to, let's put it this way, that are under strategic review. Thank you. So maybe I guess within consumer, we've seen a couple of companies, I guess, go diverging directions. Some are focused on simplification, and I feel like some are trying to introduce complexity into their models for one reason or another. Specifically in rigid paper container, you talked about renaissance. What's driving that? And maybe can you talk about some of the product lines where you're seeing specific success there? Yeah, thanks. Two things. One, we're partners with just a fantastic company, Kellanova on the Pringles brand, and they've just done a fantastic job of growing that business on an international basis. So that's a big driver. The second, and equally as important, is sustainability. And it's really starting in Europe, but we're feeling the pull globally. And that's our all-paper can solutions that are 90% to 95% paper. So we had today on display an example of a coffee item that was in glass in Europe that has just converted literally in the last month from glass to one of our paper containers. Products that we have lost back in the days that blow molding was the darling that left our rigid paper containers coming back to our all-paper solutions. We have technologies that Sonoco has developed and owned that support these all-paper constructions. Kellanova and Pringles have just launched an all paper with a paper bottom in the U.K. We have a product with Frito-Lay here in the U.S. that has just launched in a metal end that is now in a Sonoco technology paper. So it's sustainability that's really driving it along with great partnerships that we have. You are seeing, it sounds like, new product introductions and restagings. Correct. That wasn't maybe on the forefront of your customers' minds two years ago? Probably 2-3 years ago, yes. Okay. On the metal packaging side, relatively speaking, new business for Sonoco. You've been in and around it, I'm sure, and around the food supply chain. But I guess what were the strategic merits of that acquisition? And then I think in the previous slide, there was some M&A associated with that. Is it domestic? Could you envision adding something maybe in Europe? There's a couple of things out there that we're aware of, but just how to think about that? Yeah. I spent a lot of time looking at, first off, ourselves, going back to 2020, but then looking at the broader market and saying, "What is one degree, two degree off center, considering our position in the can market that we may have a right to be in?" So we've been in the metals business for 50, 60, 70 years making closures, both easy open end for processed food, metal can applications, and certainly to supply our paper cans. So we knew we had a right to be in this business from a technology perspective. We knew we had a right to be in this business from understanding the market and the customers. And so box number one, check. We have a right to be in this from an operational perspective. Secondly, we'd go out and look at the market. Is it growing? No, it's not. But we looked at there was a lot of private equity in the market that strategics weren't interested in it. We felt that way. I'm not speaking for those strategics that are still in it, but you had assets that were coming available in Europe. You had joint ventures with private equity in the U.S. You had private equity in Europe. You had private equity in the U.S. You had strategics that were investing away from the core. And we just said, "Look, this is a big market, and it's an important market." There's been a lot of substitution that seems to have slowed down. We did a lot of research on that as well, and it's kind of stabilized. And so we said, "Look, just like any other, take our paper can business in the 1980s and '70s." There was a lot of people in that market that said, "Hey, it's not going to, we're out." And we leaned into it. And so that's exactly what we did. And what I can tell you, well over two years ago when we finalized this acquisition, all of the financial metrics have exceeded our expectations. But more importantly, the market reception has been fantastic. We've put capital in. So we are thrilled with the decision. We're thrilled with the reaction from the market and are looking forward to continued organic improvement and investment that we made. Acquisition, yes. I mean, we talked about in the previous slide, focus areas. We're keeping an eye on what's going on around the world. If it makes sense for us, then we'll certainly pursue that. If it doesn't, we won't. Simple as that. Okay. Sticking with metal cans, you kind of differentiate a little bit between the aerosol versus the food cans. It's hard to track specifically some of the codes and import-export data, but it looks like there's some imported filled food cans making their way into the U.S. And on one hand, I think it's probably intended to maybe divert away from some of the import tariffs around tinplate, potentially, to make it more affordable on the shelf. And is that a concern for you all? And do you see it as another potential threat for the market, at least on the human food side? Yeah. And I would say it's a combination of Asian tinplate and Russian agricultural products coming together to say, "Hey, we're both blocked. Why don't we get together and we just send finished product over to the U.S.?" So that is happening, but it's happening in more of the commodity area of the aisle. We don't participate in that side of the market, and we're not happy with it. And that's the danger of these import duties that are blanket to prevent steel or agricultural products as a punishment to a country who otherwise figures another way in. So I'm sure the industry is going to be paying attention to this in terms of, but I don't see that as any kind of threat to the customers and markets that we serve. Okay. And then on the flexible and thermoform side, outside looking in, you have some pretty big players in the marketplace that choose to use scale, specifically on the procurement side to test their low-cost capabilities. Your business isn't as big, but it seems like the margin profile is pretty consistent, quite honestly. So I'm curious if your success in that business and their willingness to deploy capital to it is maybe a circular, one supports the other. But is there something you do commercially, operationally that's maybe a little bit better, a little bit differentiated? And then does that justify the investment in terms of, again, I think I saw M&A as part of the strategy there? M&A is part of the strategy, but we are by far, we can't compete with the big guys in terms of flexible for all the reasons you just pointed out. We are mining a niche, evaluated niche, open reclose, unique solutions that we focus on. And we don't try to go out and get into these mega bids and all. That's not who we are. If you look at the thermoforming side, there's really three main products, four main products that we participate in, and we're the number one in both of those. I mean, they're niche, but they're very good markets, and we have a right to win. We have folks pecking at us from all different directions, but our customer profile, our technologies, and our solutions are superior for that small sector of the business. There's no way I'm not interested in doing big major deals in either one of those businesses, but it's more kind of like we just did Inapel, which is in Brazil. That makes us the number two in Brazil. But there's customer reasons why, in fact, there's North American reasons why we made that investment. Small, but it fits that strategy to find a vein in a big market that you can be successful in. Okay. I guess dial back a little bit to maybe 2024. The expectation, I think, for a consumer was that we'd see sequential volume improvement. You sort of intimated we're on that track. Again, seasonal pack or anything that we should be aware of thinking about the volume cadence for 2024 as it relates to consumer? Yeah. We got to go with what our customers are telling us. And to your point, the biggest legacy Sonoco time of the year is the end of the summer through the late fall. We call it the fall-bake season. So the expectation is we will see improvements. Doesn't happen. It's what it is. What I'll keep going back to is that if you look at the margin profile of the company in total, 300 basis points already pointed out that all our businesses are running extremely well, managed very well. Productivity, I've already talked about, and we'll pull whatever triggers we have to meet the expectations that we set forward. Okay. On the industrial side, there's a lot of products when I look at that, but tubes and cores specifically, I think, is kind of the heart and soul of that business. We're reading about an inflection. One of your competitors just reported earnings and talked about, again, sequentially improving demand trends. Can you talk about what you're seeing there? Similar. Sequential and year-over-year. But I'll tell you that I'm really happy to see for the first time in the last 18 months, two years, our URB and North America network is completely full, north of 90% operating rate. And it looks that way all the way through the third quarter at this point in time. So I can tell you there's some share gain. There's some improvements in the tissue and towel sector where we don't make cores. We actually sell the paper to the large CPGs that make the small inner cores for their products. So a little bit of a green shoot, if you will, in terms of what we're seeing on the industrial side. Price cost, we called that out before we even started the year, and we saw that in the first quarter. But that's the one I really like to point to that if you look at our industrial business, and I'm really tired of talking about Project Horizon, but getting out of a corrugated medium, think about we were losing $10s of millions on that machine when times got tough, and we were making good money when the market was tight. We did not like that cyclicality and that lack of control and lack of vertical integration. That's just a great example of what we've been doing around the world in terms of on smaller scales of improving. So that business used to run from 7% to 10% would be a great year even. Now we're looking at 11% would be a low. We've shifted the scale with investment, with making the right decisions, with the right closures on a global basis, and couldn't be more proud of the team and how they've been able to do that. We talked a decent amount. There's a couple of paper companies here today, one for dinner last night. There's multiple price initiatives in the marketplace today, both domestically and in Europe. I want to transition a little bit to Europe. You talked about why conditions are a little bit better here domestically, but what about Europe? What are you seeing there? You don't just make tubes and cores here. You make them in Asia as well. Yeah. So Europe had a pretty good first quarter, surprisingly. They were able to hold on the price, particularly on the converting side, and market dynamics have been pretty favorable. Asia, we're small in China. Volume has been up. But as I said, jokingly, a couple of extra truckloads and our volume's up in China. Southeast Asia were bigger, but it too is improving. We've had some challenges in Latin America. We were seeing a lot of imports, particularly coming from China into Mexico. Just recently, in fact, I heard this yesterday, that there'll be some import duties put on China as it relates to paper that are coming soon. That should bring that market back into balance. So look, the story's kind of the same everywhere around the world. We're seeing incremental improvements, but not full scale what we'd like to see. Okay. You talked about productivity. You talked about increasing CapEx to $300 million plus. How do you think about those projects from a returns perspective? Yeah. North of WACC, we have set targets and pretty disciplined way we look at this, but it varies by country. What's the cost of capital and the markets that is asking for the capital? But it's going to clear the WACC. And actually, a little north of that is what we typically target. Not to get into that kind of detail, but yeah. Sure. Okay. OCC is a big input. We've heard a decent amount about increased tension from export on the North American fiber basket, if you will. What are you seeing? And then sort of can you remind us what's embedded in expectations for the full year? Yeah. As you know, it's been pretty stable here for the, what, last month or two. But our forecasters are as good as anybody else, our team. What we're building in somewhere around $5 to $10 through now to the end of the year. So we're not anticipating a run-up. Understood. And then strategy. You talked about the realigned thermoformed flexible packaging segment. What are you expecting from that initiative? You talked about, again, $50 million of productivity, which is pretty robust for not just you, but for anyone, right? What's the runway look like for that? Yeah. The first thing was I want to make it clear because we announced this during the investor day, and I had a few analysts and folks grab me and say, "Wow, you're going to try to do cross-divisional selling again." No, that's not what this is about. We understand that there is a commonality where we sell a thermoform package. I mentioned the QSR sauce packs where we sell a thermoform package and the lid stock together. And there's surprisingly a relatively large piece of business that does fit where it makes sense to have. But this isn't about commercial. It's really about how we run the business. And so you have to go back and look and say, "Wait, we had four thermoforming businesses that were managed independently. They were running different markets, but they were running the same machines." And we said, "Look, the commercial side of this, we can keep separate, but let's look at up the chain in terms of engineering, in terms of manufacturing support, and overall leadership, and look at this literally as an acquisition, and let's energize this thing the best way we can." So it's to drive productivity and commercial opportunities as it relates to where we're selling to the exact same solution and then maintain so effectively getting rid of four general managers, one general manager. It's a productivity play with some unique commercial opportunities. Have you identified for us on the outside world sort of maybe 24, 25 targets associated with this specifically? No. No. Okay. One other thing you mentioned that I think is probably important for the investment community to understand or something that I guess is on our mind is when you look at the $1 billion or so, $1.067 billion, I guess, to use the point estimates of $1.5 billion, what are the two maybe key risks or things that could derail the success of that? And then if we're having this conversation in 2027 and you're on track, what are the two things that have to go right to get you there? Two key. I'll give you one. The biggest concern I would have is the geopolitical environment, and it's a macro. It's not specific at least. Sure. Okay. I think things under our control, we have under control. I've already talked about the targets we set in 2020, we achieved in three years. I don't know what's behind the curtain that may change that, but I do know what's in front and center. I talked about the amount of capital that we've got going into place that's going to be growth-related that we'll be hitting in 2025, 2026. I feel pretty positive about it in total. It's the unknown. Capital structure, capital allocation. You guys have always been a very reliable dividend payer. What's that? 98 years. 99 years. Kept a relatively conservative balance sheet. Can you talk about that, the importance of investment-grade rating, etc.? Yeah. So capital structure, you said it. Dividends, table stakes. I already talked about organic capital. We talked about inorganic opportunities. Share buybacks have never been part of our program. We'll evaluate that depending on circumstances and other available allocation opportunities. The credit rating is important to us, but it also depends on what the opportunity is and shareholder value that could be driven. What we have consistently said is if we step out, the intent is to step right back in. Is there anything specifically about the story that you feel like is misunderstood by the investment community? Yeah. It could be frustrating. If you look at all of our key financial metrics, we're in the upper quartile against our peer group. If you look at our TSR, we're not. And there's a lot of head scratching to figure out what am I missing? What do you guys need from me to understand that this is real? Early days, I'm like, "Okay, well, maybe they don't think this is real, and we're going to get back to the same old Sonoco." We have structurally changed the company. We've made capital investments that are paying. We've got a very, very strong global team. And all I can bank on is that folks are going to realize that we're here to stay with the type of numbers that we're talking about and the projections that we're looking at, and the TSR will catch up with it. Last one for you. I think you've talked about maybe $1 billion to monetize out of that all-other segment. I don't think there's a specific time frame, nor should there be necessarily. You can't dictate. But anything you see on the horizon that we should be mindful of thinking about markets specifically that are more in favor, less in favor today? Nothing I can really speak to at this moment. You're right about timing. It's available, but we want to make sure that when we go to market, it is at the right time for the right value to generate the highest return we can to our owners. All right. Thank you. Great.