We also returned capital to shareholders and increased our annual dividend for the 40th straight year. We completed acquisitions and divestitures according to plans and our teams did not skip a beat on executing initiatives to further strengthen our foundation. I want to close 2023 by thanking this incredible team of Sonoco for the resiliency and dedication throughout the year. Certainly, the global economic and external factors did not make this an easy year at all, but we did not stand still and we delivered the second best annual financial performance in the company's 125-year history. I'm grateful to work alongside these great people of Sonoco, as well as our customers and supplier partners and we continue to look to the future with optimism.

And with that, I'm going to turn the call over to Rob to cover our financial results and outlook. Rob?

Rob Dillard: Thanks, Howard. I'm pleased to present the fourth quarter and full year 2023 financial results, starting on page six of this presentation. Please note that all results are on an adjusted basis and all growth metrics are on a year-over-year basis unless otherwise stated. The GAAP to non-GAAP EPS reconciliation is in the appendix of this presentation, as well as in the press release. As Howard said, 2023 was a record year for Sonoco. In 2023, we achieved the second best financial results in the company's 125-year history in key metrics such as net sales, adjusted EBITDA and adjusted EPS. By many measures, this was our best year ever. We achieved record operating cash flow, record free cash flow, record productivity and we invested a record amount to drive future growth and profitability.

We've built a foundation for continued strong financial performance, building on our enduring operating model, strong market positions, investment-grade balance sheet and our differentiated dividend. We're excited about the future and feel good that 2023 was a year to solidify our improvement since 2021. Full year 2023 net sales decreased to $6.78 billion, due to the volumes that comes from destocking and consumer and an elongated cycle in industrial. While these factors impacted year-over-year results, we grew net sales at a 10% compounded annual growth rate since 2021, due to strategic pricing, new product wins and acquisitions. Adjusted EBITDA grew $297 million from $770 million in 2021 to $1.067 billion in 2023. Over $150 million of this increase was organic improvement due to strategic pricing and productivity.

Adjusted EBITDA margin was 15.7% in 2023, a 190 basis point increase from 2021. We achieved strong profitability due to price cost in 2022 and retain this profitability in 2023 due to record productivity of $109 million. We are operating with agility and continue to match cost controls with productivity investments. 2023 GAAP EPS was $4.80 and adjusted EPS was $5.26, which was within our guidance range of $5.25 to $5.40. On page 7, we have our results for Q4 2023. Net sales decreased 2% to $1.64 billion. Volumes were lower 3.4% due to low single-digit volume declines in both consumer and industrial and price was negative 2.3% due to negative index-based pricing. Adjusted operating profit decreased to $167 million, adjusted EBITDA decreased to $236 million and adjusted EBITDA margin was 14.4%, a 20 basis point decrease from 2022.

Q4 was an incredibly strong quarter operationally. We managed variable demand and generated record productivity of $49 million. This translated into a 180 basis point increase in gross profit margin. These operating profit results were offset by SG&A items that we consider infrequent in their magnitude, including higher employee expenses, health care and accounts receivable reserves. GAAP EPS was $0.82 and adjusted EPS was $1.02 within our guidance range of $1.01 to $1.16. Tax was a $0.06 drag on the quarter as the tax rate increased to 25.7% due to actions to repatriate cash. It's notable that without the specific higher SG&A items and tax items, we would have achieved at least the midpoint of guidance. Page 8 has our sales and operating profit bridges for the quarter.

Net sales declined to $1.64 billion due to negative volume mix and negative price Volume mix was negative $20 million in the quarter as consumer continues to be impacted by inflationary pricing at retail and industrial continues to reach a cyclical low. Price was negative $39 million. We continue to achieve strong results from our strategic pricing program. Negative price was a result of deflation in index-based prices in resin, metal and paper-based businesses. Next on this page we have the adjusted operating profit bridge. Adjusted operating profit was driven by negative volume mix and negative price cost with strong productivity benefiting results. Volume mix was negative $10 million, price/cost was negative $14 million as positive price cost in consumer and all other was offset by negative price cost in industrial.

Productivity was positive $49 million as we achieved positive manufacturing productivity due to our lean programs and positive fixed cost productivity due to continued efforts to reduce our plant footprint and optimize supply chains. Other was negative $42 million due to employee expenses, healthcare and accounts receivable reserves. These expenses are not expected to repeat in this magnitude. Page 9 has our segment results for the quarter. Consumer sales decreased 3% to $856 million. Consumer volumes decreased low single digits due to customer inventory management and the impact of inflationary pricing. Many consumer customers are beginning to return to historical pricing practices, including discounting. However, volumes have been slow to return to typical patterns.

Rigid Paper Containers sales declined low single digits due to mid single-digit volume declines offsetting positive price. Flexible sales were flat as new customer gains offset low legacy customer volumes, Metal Packaging sales decreased mid-single digits due to low single-digit volume declines and negative index-based price actions. Demand from our core customers in Metal Packaging has strengthened, but overall demand declined due to anticipated template-based price reductions in 2024. Consumer operating profit decreased to $83 million as $23 million of productivity and $17 million of price cost was offset by volume mix and SG&A, a meaningful component, of which we do not expect to repeat in this magnitude. Consumer operating profit margin was flat at 9.7%.

Industrial sales decreased less than 1% to $593 million. Industrial volumes decreased low single digits due to lower demand in most key markets and geographies. Industrial prices decreased mid-single digits due to index based pricing actions. We continue to achieve strategic pricing, but were impacted by declining paper indices and increasing OCC. OCC increased to $92 per ton from $38 per ton in 2022. Industrial operating profit decreased to $62 million, due to $36 million of negative price cost offsetting $20 million of productivity. Industrial operating profit margin remained at a historically strong 10.4%. We're protecting margins with strategic pricing and with cost actions to reduce fixed costs. The business is well-positioned to benefit from a return to normalized volumes.

All other sales decreased 7% to $187 million due to broad volume declines, while other operating profit increased to $22 million due to strong productivity and positive price cost. Moving to Page 10. Our capital allocation framework aligns with our business strategy to drive value creation through earnings growth and improved margins. In the fourth quarter we generated operating cash flow of $267 million. We invested $108 million of this cash and capital expenditures to fund our growth initiatives and improve margins. Results from these investments are translating into improved productivity and growth with new customers and new products. Further, we remain focused on increasing the dividend, which are present at $0.51 per share on a quarterly basis or a 3.5% annualized yield based on our current share price.

Next, we paid off $172 million of debt in the quarter and reduced our net debt to adjusted EBITDA to 2.8x. We'll continue to be disciplined and improve our liquidity and access to capital. This is key to our strategy as we continue to have a proactive M&A strategy focused on executing the right deals based on strategic fit, scalability, financial profile and cultural fit. We're being disciplined in a disrupted M&A market and we'll do the right acquisitions and divestitures at the right time for us. Page 11 has our guidance for Q1 and full year 2024. Guidance for 2024 adjusted EPS is $5.10 to $5.40. This guidance is based on low single-digit volume growth, consumer volumes are expected to grow low single-digits, while industrial volumes are expected to experience only limited recovery.

Price cost is expected to be meaningfully negative due to contractual resets in consumer and the impact of timing and pricing lives on industrial. Another meaningful input to guidance is a $32 million increase in depreciation. We expect to grow adjusted EBITDA in 2024, and are guiding to a range of $1.05 billion to $1.1 billion. Operating cash flow guidance is $650 million to $750 million, working capital is expected to be a $100 million to $150 million use of funds, as we invest in inventory and receivables to assess supply chains and enable volume growth. Guidance for our capital expenditures is $350 million. We have increased the proportion of capital expenditures focused on long-term growth and profitability projects. This investment is expected to drive record productivity in 2024 and beyond.

Guidance for Q1 2024 adjusted EPS was $1.05 to $1.15. We're expecting modestly negative volume in consumer, as our customers remain cautious. Consumer price cost is expected to be negative due to contract pricing resets. Industrial volumes are not expected to improve in Q1. Industrial price trends are improving, but price cost is expected to be meaningfully negative on a year-over-year basis, due to last year's low OCC comparative and last year's higher tan bending chip comparative. Now, Roger will further discuss the outlook for the business.

Rodger Fuller: Hi. Thanks, Rob. If you please turn to Slide 12 for our view of segment performance drivers in 2024. Let me start with our first quarter outlook. In the Consumer segment, we expect volume to be up sequentially over the fourth quarter, but basically flat year-over-year from continued lower consumer spending due to retail price inflation. In rigid paper containers, we see volumes slightly down in North America versus a strong start last year, flat in Europe and some nice year-over-year sales growth in the rest of the world from new product launches and our expanded capacity in South America and Asia. Organic flexible volumes are projected to be flat to down slightly due to continued softness in our base soft baked goods and confection business, but aided in the first quarter from the benefit of the Inapel acquisition in Brazil.

In our Metalpack business, we did see a recovery of our steel aerosol business in the fourth quarter, offset by some softness in food. In the first quarter of 2023, we expect low- to mid single-digit increases in both food and aerosol bottle cans. In the Industrial segment, volumes are up sequentially from last quarter, but down low single digits year-over-year with weakness primarily in Europe and Asia, as many of our end markets are tied to consumer staple and durable spending and inflationary factors that have slowed spending. We do expect higher paper mill utilization in the first quarter in our global paper system driven primarily in North America. During the first quarter, there will be an outsized impact from negative price cost as input costs continue to rise and the timing of pricing updates lag.

We expect the impact of negative price cost to improve over Q1 levels as we move throughout the year. Productivity remains strong as our team is effectively managing costs throughout our renewal and converting systems. In the All Other segment, volumes continue to remain soft with price cost offsetting some impact of the lower volumes. Now, turning to the full year 2024 guidance. We expect consumer volumes to be up low single digits and productivity remains strong. We're anticipating relatively stable material pricing and supply chain performance, but do expect consumer price cost for the year to be negative from contractual pricing resets, somewhat offset by productivity. In industrial, we're not projecting volume recovery in the first half of the year.

We also expect price cost to remain negative from index-based pricing and higher input costs, which will be weighted to the first half of the year. As you know, we've announced price increases in North America on both URB paper and converted products effective February 1, and these increases are progressing well. The team continues to do an excellent job of expense management and we expect productivity and manufacturing efficiencies will offset negative volume impacts. And lastly, in all other, we anticipate fairly stable demand across the businesses and good productivity to continue throughout the year. So overall, we remain, I believe, appropriately conservative on volume recovery across the segments with good productivity and cost control in place until we see volume recover.

With that, back to you, Howard.

Howard Coker: Great. Thanks, Roger. As I stated in my opening remarks, we are not standing still as we progress a robust set of plans and initiatives across the enterprise. And I thought, I'd just share a few of those with you. First, on the divestiture and closure front, we continue to execute our portfolio transition and footprint optimization activities. Last week we announced the closure of our Sumner, Washington URB paper mill. This was the oldest mill in Sonoco's North American network and the cost to recapitalize was just simply not feasible. We're moving tons to lower-cost mills in the network. We've owned Sumner for over 40 years and extremely grateful for the support of this team through these years. We also announced the expected sale of our Protective Solutions business from our all other category or segment, which should close in the first half of 2024.

This has been a great business for Sonoco with great leadership team. We know their knowledge and skills will serve them well into the future. As we continue our portfolio resolution, we remain laser focused on simplification and the alignment and fit to what businesses remain in our core. Secondly, we're pleased to announce that we were recognized by Kellanova for designing, manufacturing and commercializing a paper bottom end for our rigid paper cans with Pringles to achieve sustainable and recyclable initiatives in Europe. This was a multiyear and a true partnership effort. We're pleased with the acceptance of our innovative package design in the marketplace, and we look forward to sharing more about this next week at our Investor Day. In December, we're also pleased to announce the acquisition of Inapel, one of the leading flexible packaging company space in Brazil.

This is a strategic move to expand capacity for growing demand that we are feeling in Brazil where Sonoco is now the number two in this market. We welcome the Inapel team and know that our aligned culture, values and technical capabilities make this a winning combination. We've also taken steps this year to further align our flexible and thermoforming businesses into one larger scaled platform. We will be providing more details on this next step in our portfolio next week. In summary, I'd just like to leave you that Sonoco continued steady performance across our businesses. We wish volumes were better, but we are well-positioned and ready to take advantage of incremental demand upticks across the portfolio. Now if you'll turn to slide 15, I will wrap things up by saying we are looking forward to our Investor Day one week from today in New York in February -- what is the date of the Investor Day?

February 22, the next week. During this meeting we will provide updates on our transformation operations or business unit plans and share thoughts on our longer-term financial outlook. We look forward to hosting you live or virtually next week. So at this time I'm more than happy -- we are more than happy to answer any questions that you may have. I'll turn it back over to the operator.

Operator: [Operator Instructions] And our first question comes from George Staphos with Bank of America Securities. Your line is open.

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