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    Bruce Monrad • Northeast Investors Trust

    Bruce Monrad's questions to Icahn Enterprises LP (IEP) leadership

    Bruce Monrad's questions to Icahn Enterprises LP (IEP) leadership • Q3 2024

    Question

    Bruce Monrad of Northeast Investors Trust focused on the Food Packaging segment, questioning the sudden deterioration in performance after management had guided for higher EBITDA in May. He sought to understand the root causes of the issues, such as waste and product mix, why these problems were proving so intractable, and whether industry consolidation could be a solution.

    Answer

    Executive Ted Papapostolou attributed the Food Packaging segment's underperformance to a lower-margin product mix and a return to pre-pandemic price competitiveness. He explained that higher waste levels are partly due to aging machinery, which is difficult to maintain and leads to unexpected downtime. Papapostolou stated that a new capital plan to modernize equipment is necessary for significant improvement. He noted the mix issue was most pronounced in Europe and concluded by stating that while the company always looks at opportunities, no sensible consolidation options are currently available.

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    Bruce Monrad's questions to Icahn Enterprises LP (IEP) leadership • Q3 2024

    Question

    Bruce Monrad of Northeast Investors Trust questioned the sudden deterioration in the Food Packaging segment's performance, asking what changed between the positive guidance in May and the current results. He pressed for details on the intractability of the waste issues, the impact of product mix, and whether the industry could benefit from consolidation.

    Answer

    CFO Ted Papapostolou attributed the Food Packaging segment's underperformance to a combination of factors that materialized post-guidance. He cited a shift to a lower-margin product mix, particularly in Europe, and heightened price competitiveness returning to pre-pandemic levels. Papapostolou explained that persistent waste issues are partly due to aging machinery, which a future capital plan aims to address by modernizing equipment. He acknowledged that while management is firefighting the issues, a capital plan is seen as the most impactful long-term solution. Regarding consolidation, he stated that while opportunities are always evaluated, nothing currently makes sense.

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