Reynolds Consumer Products Inc. (NASDAQ:REYN) Q1 2024 Earnings Conference Call May 8, 2024 8:00 AM ET Company Participants Mark Swartzberg - Vice President, Investor Relations Lance Mitchell - President & Chief Executive Officer Scott Huckins - Chief Financial Officer Conference Call Participants Rob Ottenstein - Evercore Peter Grom - UBS Mark Astrachan - Stifel Andrea Teixeira - JPMorgan Madison Callinan - Canaccord Genuity Jim Abbott - Barclays Operator Greetings, and welcome to the Reynolds Consumer Pro ...

Non-GAAP Financial Measures We use non-GAAP financial measures "Adjusted EBITDA," "Adjusted Net Income," "Adjusted Earnings Per Share," "Net Debt" and "Net Debt to Trailing Twelve Months Adjusted EBITDA," in evaluating our past results and future prospects. We define Adjusted EBITDA as net income calculated in accordance with GAAP, plus the sum of income tax expense, net interest expense, depreciation and amortization and further adjusted to exclude certain, non-recurring items, if applicable. We define Adj ...

Financial Performance - Total net revenues decreased by $41 million, or 5%, to $833 million for the three months ended March 31, 2024, compared to the same period in 2023[78]. - Net income increased by $32 million to $49 million, driven by declines in material and manufacturing costs and reduced interest expense[79]. - Adjusted EBITDA increased by $40 million, or 49%, to $122 million, primarily due to lower material and manufacturing costs[99]. - Cost of sales decreased by $87 million, or 12%, to $632 million, attributed to lower volume and material costs[94]. - Selling, general and administrative expenses increased by $6 million, or 6%, to $111 million, mainly due to higher personnel and advertising costs[94]. Segment Performance - Reynolds Cooking & Baking segment net revenues decreased by $19 million, or 7%, to $264 million, primarily due to an $18 million decline in non-retail revenues[101]. - Hefty Waste & Storage segment net revenues remained stable at $229 million, with a slight decrease in retail revenues[88]. - Hefty Tableware segment net revenues decreased by $19 million, or 8%, to $205 million, driven by lower retail volume[88]. - Presto Products segment net revenues remained stable at $143 million, with no significant changes reported[88]. - Hefty Waste & Storage total segment net revenues decreased by $4 million, or 2%, to $229 million, due to lower volume[103]. - Hefty Tableware total segment net revenues decreased by $19 million, or 8%, to $205 million, primarily due to lower volume and pricing[105]. - Presto Products total segment net revenues were relatively flat at $143 million, a decrease of $1 million, or 1%[108]. Adjusted EBITDA by Segment - Reynolds Cooking & Baking Adjusted EBITDA increased by $29 million, or 725%, to $33 million, primarily driven by lower material and manufacturing costs[102]. - Hefty Waste & Storage Adjusted EBITDA increased by $11 million, or 20%, to $66 million, driven by lower material and manufacturing costs[104]. - Presto Products Adjusted EBITDA increased by $10 million, or 53%, to $29 million, primarily driven by lower material and manufacturing costs[109]. Cash Flow and Capital Structure - Net cash provided by operating activities increased by $11 million to $99 million, driven by working capital initiatives and higher net income[113]. - Net cash used in investing activities increased by $7 million to $29 million, driven by increased capital expenditures[114]. - As of March 31, 2024, the outstanding balance under the Term Loan Facility was $1,845 million, with no outstanding borrowings under the Revolving Facility[117]. - A cash dividend of $0.23 per share was declared and paid during the three months ended March 31, 2024[134].

Exhibit 99.1 Reynolds Consumer Products Reports First Quarter 2024 Financial Results First Quarter Net Income and Adjusted EBITDA Increased 188% and 49% First Quarter 2024 Highlights Retail volume performed at the high end of Company expectations, decreasing 3% which includes over 1% of portfolio optimization. The Company continued to lead its categories with several performing slightly better than expected in the quarter. Net Income increased $32 million and Adjusted EBITDA increased $40 million, or 49%, o ...

Reynolds Consumer Products Inc. (NASDAQ:REYN) Q4 2023 Earnings Conference Call February 7, 2024 8:00 AM ET Company Participants Mark Swartzberg - Vice President of Investor Relations Lance Mitchell - President and Chief Executive Officer Scott Huckins - Chief Financial Officer Conference Call Participants Robert Ottenstein - Evercore ISI Lauren Lieberman - Barclays Mark Astrachan - Stifel Brian McNamara - Canaccord Genuity Andrea Teixeira - JPMorgan Operator Greetings and welcome to the Reynolds Consumer Pr ...

Revenue Concentration - In 2023, sales to the top ten customers accounted for 72% of total revenue, with Walmart and Sam's Club contributing 30% and 18% respectively[66]. - The company relies on a relatively small number of customers for revenue, making it vulnerable to demand fluctuations and potential loss of significant customers[66]. Cost Pressures - The company experienced significant increases in raw material costs in both 2021 and 2022, particularly in resin and aluminum prices, negatively impacting results[70]. - Labor costs in the United States continue to rise, and the company faces potential labor shortages, which could adversely affect operating expenses and growth[75]. - The company has implemented multiple rounds of price increases in 2021 and 2022, but these actions typically lagged behind material cost increases[72]. - Global supply chain issues and inflationary pressures have previously led to increased raw material and input costs, which may impact future operating results[80]. Economic and Market Risks - Economic downturns and market conditions could lead to decreased demand for the company's products, impacting financial performance[78]. - The company operates in competitive markets, facing pressure to continuously innovate and maintain strong customer relationships[68]. - Future regulatory changes related to environmental concerns could affect product demand and operational practices, impacting financial results[77]. Financial Performance - Total net revenues for the year ended December 31, 2023, were $3,756 million, a decrease of 1.6% compared to $3,817 million in 2022[295]. - Gross profit increased to $942 million in 2023, up from $776 million in 2022, reflecting a gross margin improvement[295]. - Net income for 2023 was $298 million, representing a 15.5% increase from $258 million in 2022[295]. - The company recorded earnings per share of $1.42 for 2023, compared to $1.23 in 2022, indicating a 15.5% increase[295]. Debt and Interest Rate Risks - The company has $1,845 million in outstanding indebtedness under its senior secured term loan facility, maturing in 2027, and $244 million of borrowing capacity under its senior secured revolving credit facility, maturing in 2026[100]. - As of December 31, 2023, the unhedged portion of the company's Term Loan Facility was approximately $695 million, exposing it to interest rate risk[104]. - Higher interest rates during the year ended December 31, 2023, have increased the company's debt service obligations on unhedged variable rate indebtedness, leading to a decrease in net income and cash flows[105]. Operational Challenges - Approximately 23% of the company's employees are covered by collective bargaining agreements, which could impact operations if work stoppages occur[96]. - The company may face challenges in acquiring or integrating product lines or businesses, which could adversely affect its financial condition and results of operations[90]. - The company may incur liabilities or harm to its reputation due to product quality issues, which could lead to recalls and financial losses[86]. Goodwill and Intangible Assets - The company has recorded significant goodwill and indefinite-lived intangible assets, which are subject to impairment testing; any impairment could materially affect results[95]. - Goodwill is tested for impairment annually in the fourth quarter, with key assumptions including forecasted Adjusted EBITDA and relevant earnings multiples[325]. - Indefinite-lived intangible assets are tested for impairment annually, using the relief-from-royalty method based on planned revenue growth rates and market-based discount rates[328]. Regulatory and Compliance Risks - The company is subject to various environmental, health, and safety laws, which could lead to significant liabilities and compliance costs[107]. - Increased regulatory efforts aimed at reducing plastic waste may impact demand for certain plastic products and increase costs for manufacturers[108]. - New legal and regulatory requirements related to ESG could result in increased compliance and operational costs, potentially disrupting manufacturing processes[110]. ESG Considerations - Stakeholders are increasingly focused on ESG matters, which could hinder the company's access to capital and affect profitability due to changing consumer preferences[109]. - Failure to meet ESG goals or respond to regulatory changes may lead to decreased consumer demand and harm the company's reputation[111]. Shareholder Dynamics - PFL controls approximately 74% of the company's outstanding shares, allowing it to determine the outcome of corporate actions requiring stockholder approval[128]. - The concentration of PFL's ownership may discourage other parties from making tender offers, potentially preventing stockholders from receiving a premium for their shares[130]. - The company may be unable to negotiate favorable terms for agreements with PEI Group due to PFL's control over the board of directors[144]. Cash Flow and Investments - Cash provided by operating activities rose significantly to $644 million in 2023 from $219 million in 2022, marking a substantial increase of 194.5%[307]. - The company reported a net cash used in investing activities of $110 million in 2023, compared to $128 million in 2022[307]. - The company paid dividends of $192 million in both 2022 and 2023, maintaining a consistent dividend policy[307]. Accounting and Reporting - The company recognizes revenue when control over products transfers to customers, generally upon delivery or shipment[332]. - Revenue is recorded net of estimated sales incentives, which are monitored and adjusted each period until realized[333]. - The company has adopted several accounting standards updates, including ASU 2023-07 and ASU 2023-09, which enhance disclosures related to segment reporting and income taxes, respectively[353][354].

Financial Data and Key Metrics Changes - The company delivered net revenues and earnings at the upper end of expectations for the quarter, with an EBITDA margin expansion of more than 500 basis points across all businesses [7][31] - Net debt to trailing 12-month adjusted EBITDA decreased from 3.8 times at the end of 2022 to 3.1 times at the end of September 2023, with an additional voluntary debt payment of $100 million made after the quarter [32][33] - Full year net revenue estimate is now 2% lower than the prior year, consisting of 2% higher pricing and 4% lower volume [15] Business Line Data and Key Metrics Changes - The Reynolds Cooking & Baking segment met volume, operational, and gross profit objectives for three consecutive quarters, with Reynolds Wrap increasing market share by nearly 300 basis points [26] - The Hefty brand in waste and food bags is performing well, with retail sales approaching $2 billion, driven by innovation and increased market share [9][10] - The disposable tableware segment is facing challenges, with plans to improve volume trends through adjustments in pricing and pack sizes [27][28] Market Data and Key Metrics Changes - Retail sales volume is stably growing in the three largest categories, with a noted shift towards untracked channels [8] - The company is benefiting from a competitive advantage due to a competitor's cybersecurity incident, which has positively impacted Hefty’s market share in waste bags [19] Company Strategy and Development Direction - The company is focused on deleveraging faster than anticipated while maintaining capital allocation priorities, including disciplined investments in automation and margin expansion [23] - An acquisition was made to enhance research and development capabilities in sustainable products, aligning with the company's recycling program [21][41] - The company aims to ensure consumers have access to sustainable product options across all categories by 2025 [43] Management's Comments on Operating Environment and Future Outlook - Management acknowledged significant economic challenges, including inflation and rising interest rates, impacting sales volume across consumer staples [8] - The company remains confident in its ability to improve trends in disposable tableware and anticipates further margin expansion [29][34] - Future guidance indicates stable to growing retail volume in aluminum foil, waste bags, and food bags, with a decline expected in disposable tableware volume [15] Other Important Information - The company has successfully implemented the Reynolds Cooking & Baking Recovery Plan, leading to increased market share and operational efficiencies [26] - The transition of CFO roles is noted, with Michael Graham stepping down and Scott Huckins taking over [4][13] Q&A Session Summary Question: Changes since August and volume performance expectations for 2024 - Management noted that while there are challenges, Hefty was already driving volume and share prior to a competitor's incident, which has continued to benefit the company [18][19] Question: Insights on M&A and acquisition goals - The acquisition was seen as a unique opportunity to enhance R&D in sustainable products, aligning with existing initiatives [21][41] Question: Opportunities for profitability reset within tableware - Management confirmed that there are plans to adjust pricing and pack sizes to improve profitability in the tableware segment [46] Question: Impact of competitor disruptions on market share - Management indicated that while there were benefits from a competitor's issues, it is premature to comment on the sustainability of these gains [53] Question: Revenue guidance changes and tableware business performance - The decline in tableware volume was highlighted, with a significant increase in EBITDA margins noted [55] Question: Balance between gross margin expansion and reinvestment - Management emphasized that the priority remains on deleveraging while also investing in the business as opportunities arise [62]

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 _______________________________________________________________________________________ _______________________________________________________________________________________ FORM 10-Q (Mark One) x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2023 OR o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT O ...

Financial Performance Highlights - Q2 2023 net revenues reached $940 million, with an adjusted EBITDA of $150 million, resulting in a 16% adjusted EBITDA margin[24] - Year-to-date net revenues totaled $1.814 billion, and adjusted EBITDA was $232 million, yielding a 13% adjusted EBITDA margin[25] - The company is forecasting strong earnings growth for the remainder of the year and has resumed paying down debt[23] Segment Performance (Q2 2023) - Reynolds Cooking & Baking net revenues were $321 million with an adjusted EBITDA of $40 million[33] - Hefty Waste & Storage net revenues were $229 million with an adjusted EBITDA of $62 million[28] - Hefty Tableware net revenues were $251 million with an adjusted EBITDA of $45 million[29] - Presto Products net revenues were $145 million with an adjusted EBITDA of $28 million[31] Outlook - The company's updated FY2023 outlook projects net income between $281 million and $296 million and adjusted EBITDA between $615 million and $635 million[39] - The company expects net debt to be between $1.8 billion and $1.9 billion as of December 31, 2023[39]

Financial Data and Key Metrics Changes - Net revenues increased by 3% year-over-year, driven by price increases and strong volumes in Reynolds Cooking & Baking, which saw a 12% overall increase and a 15% increase in the retail business [6][8] - Operating cash flow for the year-to-date reached $207 million, representing a $106 million increase compared to the same period last year [9] - Net income and adjusted EBITDA also increased over the prior year, supported by margin expansion across all businesses [8][49] Business Line Data and Key Metrics Changes - Reynolds Cooking & Baking achieved restored profitability and operational improvements, contributing to overall earnings growth [5][11] - Hefty Waste and Storage volumes decreased by 8%, while Hefty Tableware volumes declined by 7% and Presto Products volumes decreased by 3% [7][8] - The Fabuloso product line reached $140 million in retail sales during the second quarter, indicating strong growth [31] Market Data and Key Metrics Changes - Reynolds Wrap gained over 5 points of brand share in the foil category, benefiting from improved retail price points and successful holiday promotions [29] - Non-retail sales are expected to decline by approximately $60 million, impacting consolidated volume growth by about 2 points [37][49] Company Strategy and Development Direction - The company is focused on restoring profitability across all business lines and has implemented a comprehensive plan for Reynolds Cooking & Baking [19][20] - Increased advertising and trade investments are planned to drive growth, particularly around key retail events and seasonal periods [30][23] - Sustainability initiatives are being pursued, including partnerships to develop environmentally friendly products [14][33] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to continue strong earnings growth and cash flow for the remainder of 2023 [16][20] - The company anticipates a challenging economic environment but remains focused on providing value and performance to consumers [15][14] - Future guidance indicates expectations for net revenues to be in line with the prior year, with a slight increase in pricing and a decrease in volume [48][49] Other Important Information - The search for a new CFO is progressing well, with an announcement expected before the next earnings release [41] - The company is experiencing mixed growth signals in the economy, impacting consumer confidence [14] Q&A Session Summary Question: Insights on household inventories and pricing - Management explained that household inventories are monitored through proprietary surveys, indicating trends in consumer restocking intentions [38] Question: Q3 sales guidance and volume expectations - The Q3 guidance reflects a 1% to 3% decline in retail sales, primarily due to inventory built from prior promotions [44][46] Question: Impact of weather on consumer demand - Management noted that while weather events had some impact on manufacturing, they did not significantly affect consumer demand [121] Question: Long-term volume growth expectations - Management indicated that volume growth is consistent with category performance, with share gains across all categories [131] Question: Gross margin recovery expectations - Management expects to return to high-20s gross margins over time, supported by ongoing recovery plans and cost-saving initiatives [90]