• Packaging System placement up 14.2% year over year to approximately 129,200 machines at September 30, 2021
• Third quarter net revenue increased 26.4% year over year to $97.1 million and 25.6% year over year on a constant currency basis to $95.6 million
• Third quarter net loss of $1.4 million compared to net loss of $6.1 million
• Constant currency Adjusted EBITDA (“AEBITDA”) of $28.5 million (which represents approximately a 29.8% margin) is up 20.3%, or $4.8 million, year over year

Ranpak Holdings Corp (NYSE: PACK) (“Ranpak” or “the Company”), a leading provider of environmentally sustainable, systems-based, product protection solutions for e-Commerce and industrial supply chains, today reported its third quarter 2021 financial results.

Omar Asali, Chairman and Chief Executive Officer, commented, “I am very pleased to report that Ranpak continued its strong momentum into the third quarter and delivered excellent results. Net revenue for the quarter increased 25.6% year over year on a constant currency basis to $95.6 million, driven by strong growth in North America and continued exceptional top-line results in Europe/APAC. We continue to benefit from strong industrial activity and consumption trends, as well as companies integrating sustainability into their packaging decisions. The team has done a terrific job maneuvering in this environment to not only drive the top-line but also to protect our margins in this evolving inflationary environment. We experienced robust growth in our profitability as Adjusted EBITDA increased 20.3% on a constant currency basis to $28.5 million, delivering a strong margin of 29.8%.”

“On a year-to-date basis, net revenue is up 28.5% and Adjusted EBITDA is up 35.0% in constant currency terms. I would like to recognize the hard work put forth by all Ranpak employees around the world. Their continued dedication has been the key to our ability to continue to serve our customers effectively while achieving excellent results year to date. Our exceptional profitability in the fourth quarter of 2020 makes for a challenging comparison, but we continue to expect to finish with a record year at Ranpak. We have made strategic investments this year in our people and systems, as well as in areas such as Automation and Material Science that position us well for 2022 and beyond. I am excited to see the impact these investments will have. Our strong balance sheet provides flexibility and value creation activities in the near and long term for our shareholders.”

“Across the globe, sustainability continues to be a key value driver and a priority for businesses. Within organizations, steering committees are being formed to examine ways to embed sustainability throughout companies’ operations, gather data, and reach publicly stated goals. Regulators, consumers, employees, and shareholders are increasingly working to drive change globally to reduce plastic pollution, and Ranpak is well positioned to play a meaningful role in that process.”

Third Quarter 2021 Highlights

• Packaging systems placement increased 14.2% year over year, to approximately 129,200 machines as of September 30, 2021
• Net revenue increased 26.4% and 25.6% adjusting for constant currency
• Net loss of $1.4 million compared to net loss of $6.1 million
• AEBITDA¹ of $28.5 million for the three months ended September 30, 2021 is up 20.3%

Net revenue for the third quarter of 2021 was $97.1 million compared to net revenue of $76.8 million in the third quarter of 2020, an increase of $20.3 million or 26.4% year over year. Net revenue was positively impacted by increases in cushioning, void-fill, wrapping, and other sales.

Cushioning increased $9.1 million, or 28.6%, to $40.9 million from $31.8 million; void-fill increased $6.2 million, or 18.6%, to $39.5 million from $33.3 million; wrapping increased $2.5 million, or 24.8%, to $12.6 million from $10.1 million; and other sales increased $2.5 million, or 156.3%, to $4.1 million from $1.6 million, for the third quarter of 2021 compared to the third quarter of 2020. Other net revenue includes automated box sizing equipment and non-paper revenue from packaging systems installed in the field. Constant currency net revenue was $95.6 million for the third quarter of 2021, a $19.5 million, or 25.6%, increase from constant currency net revenue of $76.1 million for the third quarter of 2020. The increase in net revenue was primarily a result of an increase in the volume of our paper consumable products of approximately 16.7 percentage points (“pp”), a 5.9 pp increase in the price or mix of our paper consumable products, and an increase of 3.0 pp in sales of automated box sizing equipment.

Net revenue in North America for the third quarter of 2021 totaled $37.3 million compared to net revenue in North America of $33.3 million in the third quarter of 2020. The increase of $4.0 million, or 12.0%, was attributable to an increase in cushioning, void-fill, wrapping, and other sales.

Net revenue in Europe/Asia for the third quarter of 2021 totaled $59.8 million compared to net revenue in Europe/Asia of $43.5 million in the third quarter of 2020. The increase of $16.3 million, or 37.5%, was driven primarily by increases in cushioning, void-fill and wrapping product categories, partially offset by a decline in automation revenue. Constant currency net revenue in Europe/Asia was $58.3 million for the third quarter of 2021, a $15.5 million, or 36.2%, increase from constant currency net revenue of $42.8 million for the third quarter of 2020.

Net loss for the third quarter of 2021 decreased $4.7 million to $1.4 million from a net loss of $6.1 million in the third quarter of 2020. Constant currency net loss was $1.4 million in the third quarter of 2021 compared to constant currency net loss of $6.2 million for the third quarter of 2020.

Year-to-Date 2021 Highlights

• Net revenue increased 33.2% and 28.5% adjusting for constant currency
• Net loss of $0.3 million compared to net loss of $18.2 million
• AEBITDA of $82.1 million for the nine months ended September 30, 2021 is up 35.0%

Balance Sheet and Liquidity

Ranpak completed the third quarter of 2021 with a strong liquidity position, including a cash balance of $110.4 million and no borrowings on its $45 million available Revolving Credit Facility.

As of September 30, 2021, the Company had First Lien Term Loan facilities outstanding consisting of $250.0 million USD-denominated term loan and €137.2 million euro-denominated first lien resulting in a Bank AEBITDA leverage ratio of 2.3x. In September, we entered into a cross-currency swap agreement to hedge the variability of exchange rate impacts between the United States dollar and the Euro. The cross-currency swap agreement was executed at a spot exchange ratio of 1.1835, resulting in $80 million USD notional term loan being exchanged for €67.6 million EUR notional term loan. This transaction saves us 82 bps annually on interest expense on the swapped notional and better hedges our exposure to cash flows associated with our Europe/APAC operations. This cross-currency swap agreement has been designated as a net investment hedge and will expire in June of 2024.

The following table presents Ranpak’s installed base of protective packaging systems by product line as of September 30, 2021 and 2020:

Conference Call Information

The Company will host a conference call and webcast at 8:30 a.m. (ET) on Thursday, October 28, 2021. The conference call and earnings presentation will be webcast live at the following link: https://event.on24.com/wcc/r/3408978/6757D493C20CB3F4052AB91C94C3928A. Investors who cannot access the webcast may listen to the conference call live via telephone by dialing (844) 200-6205 or (929) 526-1599 and use the Conference ID: 430411.

A telephonic replay of the webcast also will be available starting at 11:30 a.m. (ET) on Thursday, October 28, 2021 and ending at 11:59 p.m. (ET) on Thursday, November 4, 2021. To listen to the replay, please dial (866) 813-9403 or 44-204-525-0658 and use the Conference ID: 188283.

Note Regarding Forward-Looking Statements

This news release contains “forward-looking statements” within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Our forward-looking statements include, but are not limited to, statements regarding our or our management team’s expectations, hopes, beliefs, intentions or strategies regarding the future. Statements that are not historical facts, including statements about the parties, perspectives and expectations, are forward-looking statements. In addition, any statements that refer to estimates, projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. The words “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “forecast,” “intend,” “may,” “might,” “plan,” “possible,” “potential,” “predict,” “project,” “should,” “would” and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. Forward-looking statements in this news release include, for example, statements about our expectations around the future performance of the business, including our forward-looking guidance.

The forward-looking statements contained in this news release are based on our current expectations and beliefs concerning future developments and their potential effects on us taking into account information currently available to us. There can be no assurance that future developments affecting us will be those that we have anticipated. These forward-looking statements involve a number of risks, uncertainties (some of which are beyond our control) or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. These risks include, but are not limited to: (i) our inability to secure a sufficient supply of paper to meet our production requirements; (ii) the impact of the price of kraft paper on our results of operations; (iii) our reliance on third party suppliers; (iv) the COVID-19 pandemic and associated response; (v) the high degree of competition in the markets in which we operate; (vi) consumer sensitivity to increases in the prices of our products; (vii) changes in consumer preferences with respect to paper products generally; (viii) continued consolidation in the markets in which we operate; (ix) the loss of significant end-users of our products or a large group of such end-users; (x) our failure to develop new products that meet our sales or margin expectations; (xi) our future operating results fluctuating, failing to match performance or to meet expectations; (xii) our ability to fulfill our public company obligations; and (xiii) other risks and uncertainties indicated from time to time in filings made with the SEC.

Should one or more of these risks or uncertainties materialize, they could cause our actual results to differ materially from the forward-looking statements. We are not undertaking any obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise. You should not take any statement regarding past trends or activities as a representation that the trends or activities will continue in the future. Accordingly, you should not put undue reliance on these statements.

Non-GAAP Financial Data

In this press release, we present Earnings Before Interest, Taxes, Depreciation and Amortization (“EBITDA”) and adjusted EBITDA (“AEBITDA”), each on a constant currency basis, which are non-GAAP financial measures. We have included EBITDA and AEBITDA on a constant currency basis because they are key measures used by our management and Board of Directors to understand and evaluate our operating performance and trends, to prepare and approve our annual budget and to develop short- and long-term operational plans. In particular, the exclusion of certain expenses in calculating EBITDA and AEBITDA can provide a useful measure for period-to-period comparisons of our primary business operations. Adjusting these non-GAAP measures for comparability for constant currency also assists in this comparison as allows a better insight into the performance of our businesses that operate in currencies other than our reporting currency. Before consolidation, our Europe/Asia data is derived in Euros. We multiply this Euro-derived data by 1.15 to reflect an exchange rate of 1 Euro to 1.15 U.S. dollars (“USD”), which we believe is a reasonable figure to use to give a stable depiction of the business without currency fluctuations, to calculate Europe/Asia data in constant currency USD. We combine the constant currency USD data for Europe/Asia with the USD North America data to create combined constant currency figures and adjust our non-GAAP figures by the respective amounts. In sum, we believe that constant currency EBITDA and AEBITDA provide useful information to investors and others in understanding and evaluating the Company’s operating results in the same manner as our management and Board of Directors.

However, EBITDA and AEBITDA have limitations as analytical tools, and you should not consider them in isolation or as substitutes for analysis of our results as reported under GAAP. In particular, EBITDA and AEBITDA should not be viewed as substitutes for, or superior to, net income (loss) prepared in accordance with GAAP as a measure of profitability or liquidity. Some of these limitations are:

• although depreciation and amortization are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future, and EBITDA and AEBITDA do not reflect all cash capital expenditure requirements for such replacements or for new capital expenditure requirements;
• EBITDA and AEBITDA do not reflect changes in, or cash requirements for, our working capital needs;
• AEBITDA does not consider the potentially dilutive impact of equity-based compensation;
• EBITDA and AEBITDA do not reflect the impact of the recording or release of valuation allowances or tax payments that may represent a reduction in cash available to us;
• AEBITDA does not take into account any restructuring and integration costs; and
• other companies, including companies in our industry, may calculate EBITDA and AEBITDA differently, which reduces their usefulness as comparative measures.

EBITDA — EBITDA is a non-GAAP financial measure that we present on a constant currency basis and we calculate as net income (loss), adjusted to exclude: benefit from (provision for) income taxes; interest expense; and depreciation and amortization.

AEBITDA — AEBITDA is a non-GAAP financial measure that we present on a constant currency basis and we calculate as net income (loss), adjusted to exclude: benefit from (provision for) income taxes; interest expense; depreciation and amortization; stock-based compensation expense; and, in certain periods, certain other income and expense items.

In addition, we include certain other unaudited, non-GAAP constant currency data for the three and nine months ended September 30, 2021 and 2020. This data is based on our historical financial statements, adjusted (where applicable) to reflect a constant currency presentation between periods for the convenience of readers. We reconcile this data to our GAAP data for the same period for the three and nine months ended September 30, 2021 and 2020.