FORWARD-LOOKING STATEMENTS
This report contains certain statements that constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. In some cases, you can identify these statements by forward-looking words such as “may,” “might,” “will,” “should,” “expects,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “potential” or “continue,” the negative of these terms and other comparable terminology. These forward-looking statements, which are subject to risks, uncertainties and assumptions about us, may include projections of our future financial performance, our anticipated growth strategies, anticipated trends in our business and anticipated growth in the markets served by our business. These statements are only predictions based on our current expectations and projections about future events. There are important factors that could cause our actual results, level of activity, performance or achievements to differ materially from the results, level of activity, performance or achievements expressed or implied by the forward-looking statements, including those factors discussed under the caption entitled “Risk Factors.” You should specifically consider the numerous risks outlined under “Risk Factors.” These risks include, among others, those related to:
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future costs of raw materials, energy and freight, including the impact of tariffs, trade sanctions and similar matters; |
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competition in the markets in which we operate; |
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changes in consumer lifestyle, eating habits, nutritional preferences and health-related and environmental and sustainability concerns; |
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failure to maintain satisfactory relationships with our major customers; |
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the impact of a loss of any of our key manufacturing facilities; |
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our dependence on suppliers of raw materials and any interruption to our supply of raw materials; |
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the uncertain economic, operational and financial impacts of the COVID-19 pandemic; |
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our ability to realize the benefits of our capital investment, restructuring and other cost savings programs; |
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seasonality and cyclicality; |
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loss of key management or other personnel; |
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uncertain global economic conditions; |
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supply of faulty or contaminated products; |
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compliance with, and liabilities related to, environmental, health and safety laws, regulations and permits; |
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impact of government regulations and judicial decisions affecting products we produce or the products contained in the products we produce; |
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any non-compliance with the Foreign Corrupt Practices Act or similar laws; |
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the ownership of a majority of the voting power of our common stock by Packaging Finance Limited (“PFL”) and an entity affiliated with Mr. Graeme Hart (together with PFL, the “Hart Stockholders”); |
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our ability to establish independent financial, administrative, and other support functions; and |
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our status as a “controlled company” within the meaning of the rules of Nasdaq. |
Although we believe the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, level of activity, performance or achievements. Moreover, neither we nor any other person assumes responsibility for the accuracy and completeness of any of these forward-looking statements. We are under no duty to update any of these forward-looking statements after the date of this report to conform our prior statements to actual results or revised expectations.
PART I
Item 1. Business
General
Pactiv Evergreen Inc. (“PTVE”, the “Company,” “we,” “us,” and “our”), a Delaware corporation, is a leading manufacturer and distributor of fresh foodservice and food merchandising products and fresh beverage cartons in North America. We produce a broad range of products that protect, package and display fresh food and beverages for consumers who want to eat or drink fresh, prepared or ready-to-eat food and beverages conveniently and with confidence. We supply our products to a broad and diversified mix of companies, including full service restaurants (“FSRs”) and quick service restaurants (“QSRs”), foodservice distributors, supermarkets, grocery and healthy eating retailers, other food stores, food and beverage producers and food processors. We operate primarily in North America.
Strategy
We have a culture that constantly seeks to improve the way we work throughout our business, from our products to our manufacturing and distribution processes to the way we work with our customers. We continually seek to optimize our business through comprehensive business reviews, ideation and targeted strategic initiatives. The review process, identification of focus areas, development of actionable improvement programs and implementation and monitoring of these initiatives are coordinated and managed by our Strategic Project Management Office (the “SPMO”). Our strategic initiatives are grouped into six key areas: growth; value-added customer service; profitable innovation; cost reduction; the integration of Beverage Merchandising and sustainability.
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Growth: Drive growth of our products and support our customers while maintaining our commitment to quality, reliability, service and safety. |
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Value-added customer service: Proactively implement new ways to service our customers and continually seek to refine our value proposition for customers. |
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Profitable innovation: Reinforce our existing product portfolio with new and on-trend products. |
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Cost reduction: Optimize our processes to drive increased profitability and cash flow through automation, digital transformation and streamlining our manufacturing and supply chain. |
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Integration of Beverage Merchandising: Capitalize on commercial and cost synergies from integration of the Beverage Merchandising business. |
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Sustainability: Maintain and grow the broadest sustainable product offering in the industry with a focus on our “Four R’s” of “Reduce,” “Reuse,” “Recycle,” and “Renew.” |
Within each of these categories, we have a number of specific initiatives that we believe will improve our business, including: our automation and digital transformation initiatives; growth of our sustainable product offerings; reduction of our carbon footprint in our manufacturing and distribution processes; and our cost reduction programs. We believe it is critical to embrace new technology and we have made significant investment across our business to accelerate growth and optimization opportunities. We rigorously track and measure the progress and results of each of our initiatives. We are focused on long-term planning and goal-setting strategies as well as our near term operating results. We believe our strategic initiatives help drive our revenue growth, increase our market share and increase our margins.
Segment Overview
Our operations consist of manufacturing and selling products through three reportable segments organized across three broad categories:
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Foodservice. Our Foodservice segment manufactures a broad range of products that enable consumers to eat and drink what they want, where they want and when they want with convenience. Products include food containers, hot and cold cups, lids, dinnerware and other products which make eating on-the-go more enjoyable and easy to do. Foodservice’s customer base includes chain restaurants, FSRs, established and emerging QSRs, distributors, institutional foodservice (e.g. airports, schools and hospitals) and convenience stores. |
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Food Merchandising. Our Food Merchandising segment manufactures products that protect and attractively display food while preserving freshness. Products include clear rigid-display containers, containers for prepared and ready-to-eat food, trays for meat and poultry and molded fiber cartons. Food Merchandising’s customers include supermarkets, grocery and healthy eating retailers and other food stores as well as meat, egg, agricultural and consumer packaged goods (“CPG”) processors. |