Reynolds Consumer Products Inc. Common Stock Barclays 19th Annual Global Consumer Conference

Okay. We're going to get started. Next up this afternoon, we are pleased to welcome Reynolds Consumer Products. We're joined by the company's President and CEO, Scott Huckins, and the company's CFO, Nathan Lowe. Guys, thanks so much for being here again this year. Get right into it. Scott, when you first stepped into the CEO role, you outlined a number of initiatives aimed at building a stronger and more resilient Reynolds, including innovation, RGM, productivity, and talent. As we sit here today, what have you learned? What has exceeded your expectations, and where are you seeing the biggest opportunities still ahead?

First of all, good to see you. Thanks for having us. I think the way we recap it is three pillars of priorities we've been working against since early 2025. People and talent, one, volume growth-related initiatives and work, two, and then supply chain productivity across the enterprise, three. Then I'll unpack a little bit of each of them. On people and talent, we've been making investments across the executive team. You see some new leaders, including our head of sales, as an example, but we've also been making investments on the front end of the business below that level, whether it's sales, marketing, RGM. You got at in your question. Second large area of talent emphasis has been in operations and supply chain, which feeds sort of the next two pillars.

In volume growth, under Carlen Hooker's direction, our new head of sales, we're really complementing two topics, which is we go through our entire book of business, look at our categories, look at our customers, and just imagine very targeted share gap selling efforts with a complement of a much more robust RGM capability. That's the first piece. Second piece on innovation would be really a philosophical approach of fewer, bigger, better, meaning we're adamant about making sure we're aligning our people and financial resources against what we think are the best ideas, and I think we've had some demonstration of progress there. Then we go to the third pillar, probably the most robust or most elements across supply chain productivity. First element is we've been implementing and installing lean principles across the entire set of our manufacturing plants.

Number two, we've invested in technology in the plants, meaning specifically having measurement tools at the line level in our plants, which is where action really gets taken, and that's the harbinger of productivity. Across supply chain, we have a 17-plant network in distribution centers, constantly looking for efficiencies on inbound materials and then outbound shipments to customers or customers who pick up. That's sort of the portfolio of work that you asked about, and I'd say that's the what. The why is what we're after is driving a more fundamentally profitable business that, at least in part, that unlocks further investment back into the business for growth. In terms of expectations and where we are, I'd say we're about where I thought we would be.

These things take time, but we certainly have demonstrated this year progress against each of the initiatives flowing through the financial statements, but I think there's still a lot left to do. I think we've got more opportunity to have more persistent volume growth opportunities ahead of us from the work we've talked about, and I think there's still a long runway of both productivity and then cost out work we can do from an automation capital investment standpoint. That's a fairly long answer to your short question.

No, that's great. So Nathan Lowe, how would you say those initiatives are showing up in the financial performance of the company currently? Because despite an inflationary cost environment, continued pressure on the consumer, you guys have sustained productivity, expanded margins, and continued to grow earnings. So what do you think is different about the business today that's allowing you to deliver those results? Why are these improvements sustainable? And again, how are we seeing all this in the financial performance?

I think there's a couple of questions- I know, there's a few questions in there I will go one by one.

I matched his long answer with a long question.

There we go. That is fair. I think as you try to trace those initiatives into the P&L, probably the most prominent one would be the productivity initiatives, by some measure. Within that, where we have made the most progress would be on manufacturing, and there is a number of things within that too, but also supply chain, logistics, distribution, other efficiencies through that entire network, and our sourcing team continues to deliver value both in the P&L and from a cash flow perspective. How does that actually show up in the result? 9% increase in gross profit in the 2026 year-to-date result, despite volumes being slightly down. When you put that together, it just means the profitability of the business is considerably improved.

It shows up as 130 basis points of margin expansion, but there is a lot of dilutive impact to that math, given the quantum of pricing that has come through, which the aim, of course, is just to offset the commodity pressure there. You say, what is different? I think probably what is different is, in this inflationary environment, stacking three quarters of consecutive earnings growth. A lot of it has to do, the productivity helps, but the RGM capabilities, really leveraging those and being very agile and precise in how we are pricing. Also, trade efficacy and any other number of price pack architecture adjustments, I think that has really been a benefit this time around in this inflationary cycle. Probably importantly, we are still delivering very strong cash flow. While we are delivering strong cash flow and profit, we keep investing back in the business for growth.

As Scott mentioned, growth is certainly evidenced in the results too, in that we've taken share across the categories taken as a whole. Importantly, a lot of the investments we're making now are about growth in the future. So moving beyond share gains, moving towards growing the category, and taking the brand into adjacent categories.

Okay, great. I'd love to get a high-level view of category health as you guys see it today. Consumer's been under meaningful pressure, tariff-driven inflation, bifurcation by income cohort, et cetera. So how are your categories performing, and do you feel like the worst is behind you from a consumer category standpoint?

I think the place to start is, my one-word answer would be stable. As we think about that question, Lauren, whether we look year to date, we look quarter to date, we just focus on track channel data or scanner data, generally across our categories, a few exceptions I'll cover, we actually see retail dollar takeaway growth despite all the factors that you mentioned. So I think what that tells us is the consumer in our categories is validating that these categories are everyday use items. Our brands and store brand offerings are certainly resonating. The couple of exceptions I think are interesting is, these are low single-digit declines on dollar takeaway, would be in the food storage category, down 1 or 2 points year to date.

Then in the tableware category, just to spend a second on that, we would have expected the tableware category to be a bit more under pressure because generally that is much more of a convenience discretionary purchase relative to the everyday use of the other offerings. But having said all of that, in each of food storage and in table, we've taken share. So that would be my attempt to recap it, but I think that the bottom line is the consumer has demonstrated resilience with their wallet, seeing retail takeaway dollar growth across the set broadly, despite the factors you mentioned.