Overview of Ranpak’s Financial Performance

Ranpak is a leading provider of environmentally sustainable packaging solutions, offering a range of cushioning, void-fill, and wrapping products to customers globally. The company’s financial performance in 2024 showed mixed results, with some areas of strength and others facing challenges.

Key Highlights:

• Net Revenue: Ranpak’s net revenue increased by 9.7% in 2024 to $368.9 million, driven by strong growth in void-fill and other revenue, partially offset by a decline in cushioning revenue.
• Profitability: The company’s profitability, as measured by EBITDA and Adjusted EBITDA, improved in 2024 compared to the prior year. EBITDA increased by 12.1% to $70.2 million, while Adjusted EBITDA grew by 14.2% to $83.8 million.
• Segment Performance: Ranpak’s North America segment saw a 20.3% decline in EBITDA, primarily due to higher stock-based compensation expense and debt extinguishment costs. In contrast, the Europe/Asia segment experienced a 56.0% increase in EBITDA, benefiting from higher sales and a litigation settlement.
• Liquidity and Capital Resources: Ranpak maintained a strong liquidity position, with $76.1 million in cash and cash equivalents as of December 31, 2024. The company also refinanced its debt in 2024, entering into a new $410 million first lien term facility and a $50 million revolving credit facility.

Revenue and Profit Trends:

Ranpak’s net revenue growth was driven by a 24.7% increase in void-fill revenue and a 41.3% increase in other revenue, which includes sales of automated box sizing equipment and non-paper revenue. This was partially offset by a 6.9% decline in cushioning revenue. The company’s profitability, as measured by EBITDA and Adjusted EBITDA, improved due to the higher revenue and a decrease in certain one-time expenses, such as stock-based compensation and debt extinguishment costs.

Strengths and Weaknesses:

Ranpak’s key strengths include its leading market position in environmentally sustainable packaging solutions, its diversified product portfolio, and its global footprint. However, the company faces challenges from inflationary pressures, which have impacted some of its end-users and resulted in increased costs. Additionally, the North America segment’s profitability was negatively affected by higher stock-based compensation and debt-related expenses.

Outlook:

Going forward, Ranpak expects continued pressure on its gross margin due to inflationary pressures and the potential impact on its end-users. The company will continue to monitor these trends and evaluate strategies to mitigate the effects. Ranpak remains focused on driving growth in its void-fill and other revenue streams, while also seeking to improve the performance of its North America segment.