兰帕克控股 (PACK) 2026年第三季度业绩电话会：自动化与利润率推动增长

核心要点

• 第三季度按报告财务数据计算的净营收增长2.3%，按固定汇率计算增长3.4%，主要得益于自动化设备销售额按固定汇率计算实现了23.5%的增长。
• 调整后EBITDA增加110万美元至2250万美元；按固定汇率计算增长6.1%，扣除认股权证影响后增长7.7%。
• 毛利率同比提升110个基点，环比提升280个基点；同时按固定汇率计算（不含RSU费用）的销售、一般及管理费用（SG&A）下降10.5%。
• 管理层维持了对2026年自动化业务营收约6000万美元的预期，即较2025年增长50%。该业务在第三季度实现了调整后EBITDA盈利，预计第四季度将再次实现盈利。
• 季度末现金余额达到5340万美元，较第二季度增加超过1000万美元。净杠杆率降至4.3倍，循环信贷额度下无未偿借款。
• 展望2027年，管理层预计自动化和冷链业务将成为推动Ranpak大部分增长的引擎，不过能源成本、高利率以及北美以外地区的疲软需求仍是主要的不确定因素。

主要财务数据

业务与运营表现

自动化业务仍是Ranpak的主要增长引擎。剔除认股权证影响后，北美地区的自动化业务营收增长超过47%；欧洲及亚太地区的自动化业务营收按固定汇率计算增长了18.1%。管理层将这一增长归因于在大企业客户中的推广部署以及赢得新客户。

北美地区营收增长6.9%，剔除认股权证影响后增长7.9%。随着分销渠道对比基数的正常化，防护纸包装系统（PPS）也做出了积极贡献。缓冲包装表现尤为亮眼，主要受益于Guardian 24的推广应用以及客户从现场发泡解决方案转用公司产品。

欧洲及亚太地区营收按固定汇率计算增长0.5%。自动化业务的增长和提价举措被PPS销量下降4.9%所部分抵消。在附加费生效前部分订单提前至第二季度释放后，欧洲分销商进行了去库存。亚太市场的需求也反映出交货周期缩短以及电商销售额下滑的影响。

运营举措对盈利能力形成了支撑。北美PPS不含折旧的利润率同比提升超过290个基点。管理层归因于更优的产品组合、精益与六西格玛（Lean and Six Sigma）项目、采购成本节省、报废率降低以及设备生产加速。管理层将这一降本增效计划比作处于“第三局”（初始阶段），表明未来仍有进一步提升的潜力。

Ranpak还在通过与Element Logic建立全球战略合作伙伴关系来扩大其自动化生态系统。两家公司计划将Ranpak的精准裁剪、开箱、封箱、计算机视觉和纸质保护技术集成到更广泛的仓库自动化系统中。

管理层业绩指引

管理层继续预计2026年自动化业务营收约为6000万美元，相当于较2025年增长50%。Ranpak预计自动化业务全年将达到调整后EBITDA盈亏平衡，并在2027年带来正向业绩贡献。

公司预计从第三季度到第四季度将出现传统季节性增长，并表示仍有望达成先前的全年业绩指引。如果汇率维持在当前水平，管理层预计汇率将对第四季度报告业绩产生约2%的负面冲击。

展望2027年，管理层预计自动化业务将实现超额增长，并实现整年盈利。新增的冷链产能计划于2027年初投产，预计从第二季度起将带来显著的营收贡献。

Ranpak还预计第四季度的现金流生成将受益于季节性因素和营运资金的释放。其目标仍是在未来24个月内将净杠杆率降至2.5倍至3.0倍之间。

风险与关注点

管理层将宏观经济环境描述为动荡不安，提到了每桶超过100美元的油价、创纪录的柴油成本、疲软的消费者信心、较高的利率以及地缘政治冲突。这些因素正在给客户支出和运营成本带来压力。

欧洲的能源通胀仍是特别令人关注的问题。荷兰天然气价格超过每兆瓦时90欧元，推高了造纸成本。Ranpak正在通过征收临时附加费来保护毛利金额，但在能源价格维持高位期间，管理层预计欧洲市场的利润率仍将面临一定压力。

第三季度北美以外的需求有所放缓。欧洲现有客户保持谨慎，而亚太地区的疲软态势仍在持续。尽管如此，随着分销商逐步消化过剩库存，管理层预计欧洲市场将在第四季度有所改善。

北美纸张市场供应趋紧。公司计划转嫁生产商的涨价成本，但执行力对于巩固近期的利润率改善成果至关重要。

分析师问答环节亮点

管理层表示，北美客户仍在中国为强劲的旺季做准备。在欧洲，尽管分销商有所去库存，但终端用户的动销情况仍相对稳固；而在亚太地区，随着生产和纸张采购更加本土化，交货周期缩短影响了订单节奏。

在被问及利润率的可持续性时，管理层估计有利的产品组合为第三季度北美地区的改善贡献了大约100至150个基点。其余增长来自运营效率提升和一次性费用减少。随着设备成本降低、生产周期缩短以及固定成本吸收改善，自动化业务的利润率也有望提升。

Ranpak表示，公司与沃尔玛（Walmart）和亚马逊（Amazon）保持着活跃的合作关系，沟通频繁且项目储备充裕。公司正在将资源投向价值更高的自动化和半自动化解决方案，同时减少对低利润率耗材业务的参与。

展望2027年，管理层明确了三大核心业务领域：PPS（防护纸包装系统）、自动化和冷链。自动化和冷链预计将贡献大部分增长，而持续的效率提升旨在支撑利润率、现金流生成以及去杠杆进程。

业绩电话会议完整文字记录

完整财报电话会议逐字稿

管理层陈述

Operator

Hello, everyone. Thank you for joining us, and welcome to Ranpak Holdings' Third Quarter 2026 Earnings Call. [Operator Instructions] I will now hand the call over to Sara Horvath, Chief Legal and HR Officer. Please go ahead.

Sara Horvath

Thank you, and good morning, everyone. Before we begin, I'd like to remind you that we will discuss forward-looking statements as defined under the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those forward-looking statements as a result of various factors, including those discussed in our press release and the risk factors identified in our Form 10-K and our other filings with the SEC. Some of the statements and responses to your questions in this conference call may include forward-looking statements that are subject to future events and uncertainties that could cause our actual results to differ materially from these statements. Ranpak assumes no obligation and does not intend to update any such forward-looking statements.

You should not place undue reliance on these forward-looking statements, all of which speak to the company only as of today. The earnings release we issued this morning and the presentation for today's call are posted on the Investor Relations section of our website. A copy of the release has been included in a Form 8-K that we furnished to the SEC before this call. We will also make a replay of this conference call available via webcast on the company website.

For financial information that is presented on a non-GAAP basis, we have included reconciliations to the comparable GAAP information. Please refer to the table and slide presentation accompanying today's earnings release. Lastly, we'll be filing our 10-Q with the SEC for the period ending September 30, 2026. The 10-Q will be available through the SEC or on the Investor Relations section of our website.

With me today, I have Omar Asali, our Chairman and CEO, and Bill Drew, our CFO. Omar will summarize our third quarter results and market conditions, and Bill will provide additional detail on the financial results before we open up the call for questions. With that, I'll turn the call over to Omar.

Omar Asali

Thank you, Sara. Good morning, everyone, and thank you for joining us today. We are pleased to continue to grow top line and adjusted EBITDA in the third quarter and on a year-to-date basis while operating in a volatile macro environment. Our automation product line delivered another quarter of strong growth with revenue increasing 26.9% year-over-year on a constant currency basis and excluding the impact of Florence. We continue to build strong momentum in automation equipment sales in both North America and Europe and are pleased it is becoming the growth engine we expected.

We continue to expect to achieve $60 million in net revenue in this area for 2026, which would be 50% growth versus 2025. The pipeline is strong. And based on what we are seeing, we expect strong growth to continue next year. Our automation product line is serving as a differentiator for us in our discussions with customers and as a diversified revenue stream that is less correlated to the short-term macro sentiment relative to the PPS business. As anticipated, we experienced improved performance in the distribution channel in North America in the third quarter as the challenging first half comparison normalized and our new product initiatives in cushioning, void fill and wrapping are gaining traction.

Cushioning, in particular, in North America had a really strong quarter as our Guardian 24 is experiencing strong adoption, and we are having success going against foam-in-place. Channel performance drove North America volumes up 1.8%, while Europe and APAC were softer after a strong Q2, leading overall volumes to be lower by 2.5%. Europe, in particular, was an outperformer in Q2, but gave some of that back this quarter as it looks like the channel worked through some prebuy relative to the surcharge and lowered inventory levels to reflect lower lead times in EMEA and in APAC as our localization goals are being achieved. Now, more on to our results. Consolidated net revenue increased 3.4% on a constant currency basis for the quarter or up 3.8%, excluding the impact of warrants, driven by 23.5% growth in automation equipment sales on a constant currency basis. Currency was a headwind in the quarter, which detracted 1.1 percentage points on a reported basis in the quarter, bringing reported top line growth to 2.3% for the quarter and 8.9% on a year-to-date basis. Adjusted EBITDA increased $1.1 million to $22.5 million on a reported basis and was up 6.1% in constant currency terms.

Excluding the impact of warrants, adjusted EBITDA increased 7.7% on a constant currency basis and roughly in line with growth in gross profit on a constant currency basis. On a year-to-date basis, adjusted EBITDA increased $5.3 million to $60.5 million on a reported basis and was up 6% in constant currency terms.

Excluding the impact of warrants, adjusted EBITDA increased 8.8% on a constant currency basis. Now, moving to the market environment and how Ranpak is positioned. The macro backdrop for the third quarter took a step back as volatility in the energy markets and rates increased markedly. Oil prices climbed back above $100 a barrel as the conflict in the Middle East reescalated, refinery shortages are driving diesel costs to record highs, consumer confidence is at multi-decade lows and the Fed raised rates in September with expectations of more hikes on the way.

Against that backdrop, I would say demand has held up reasonably well, although Q3 saw some softness outside of North America. Customers are cautious given the pressure higher energy costs are putting on both their input costs and consumer spending, but most folks we talk to are expecting a peak season similar to last year, and we are still seeing strong demand for automation solutions. In North America, the paper market continues to tighten as producers try to push increases, which we are passing on to protect our margin profile.

In Europe, Dutch nat gas is now above EUR 90 per megawatt hour and driving paper pricing higher. But there, we have implemented a surcharge, which we adjust as needed given the volatility in energy to protect our gross profit. As we said last quarter, we believe the surcharge is temporary, and we will remove it as energy costs normalize. Conditions evolve rapidly, but overall, we believe we are managing the environment very well at Ranpak through our pricing actions and the momentum we are seeing in automation. With energy costs climbing again and rates moving higher, our customers are scrutinizing every dollar of packaging spend, which we believe plays to our value proposition of lowering their total cost of packaging. Internally, we hold ourselves to the same standard.

And this quarter, 110 bps gross margin improvement and 10.5% reduction in constant currency SG&A, excluding the RSUs expense, show that discipline is paying off. We have enhanced our operational talent and capabilities over the past year and are finding opportunities to enhance our profile through the implementation of operational and continuous improvement projects to drive our KPIs.

The team is invigorated by the early progress we are seeing and excited about further improvements we are pursuing. Procurement, in particular, is an area where we see upside as we can utilize our increased scale and global reach to find efficiencies that reduce our material cost and time to build our equipment. Overall, I believe we are on the path to a much more efficient platform in 2027. Beyond the near term, our automation and cold chain product lines are where we are concentrating our investment, and we believe they will be the foundation of our growth in the years ahead. While the macro backdrop is somewhat uncertain, we believe Ranpak is well positioned heading into peak season and 2027. With that, here's Bill with more information on the quarter.

William Drew

Thank you, Omar. In the deck, you'll see a summary of some of our key performance indicators.

We'll also be filing our 10-Q, which provides further information on Ranpak's operating results. Overall, net revenue for the company in the third quarter increased 3.4% year-over-year on a constant currency basis or an increase of 3.8%, excluding the impact of warrants, driven by strong momentum in automation and volume growth in the distribution channel in North America.

Our North America revenues increased 6.9% in the quarter or up 7.9%, excluding the impact of warrants, driven by more than 47% growth in automation, excluding warrants, while PPS also contributed positively to the top line as the channel comparisons normalized and returned to growth as expected with strong performance in cushioning. Traction with automation in North America also continues to build as we land new logos in the region, so we remain excited about the outlook there. In Europe and APAC, net revenue increased 0.5% on a constant currency basis, driven by 18.1% growth in automation on a constant currency basis as well as pricing actions, partially offset by 4.9% volume decline in PPS as EMEA channel customers work down inventory and APAC adjusted shorter lead times and lower e-commerce sales.

Gross profit increased 7.3% on a constant currency basis in the quarter and would have increased 8.2%, excluding the $1.2 million noncash provision for warrants. Our margin initiatives are delivering, and we are pleased to report 110 bps improvement in gross margin versus Q3 of last year and 280 bps improvement sequentially from Q2. In North America PPS, where margins have been most pressured, we made continued progress through our efficiency gains and improved mix, enhancing our margin more than 290 bps, excluding depreciation versus the prior year. In EMEA, there was 90 bps of pressure ex depreciation due to rising COGS in PPS and greater contribution from automation. Given how much energy prices have increased, we are most focused on protecting gross profit dollars there through the surcharge in the near term. So we do expect some margin pressure in the region at these levels. Overall, though, we have a number of actions in place, which we believe are making us more efficient and improving our profile, and we expect to make further progress into 2027.

SG&A, excluding RSU expense, was down 10.5% on a constant currency basis versus the prior year, reflecting the cost actions we have taken across the business and fewer onetime expenses. Consistent with what we shared previously, we continue to prioritize cost discipline and margin expansion. We're focused on keeping spend lean and leveraging our fixed overhead as we grow. As Omar mentioned, adjusted EBITDA increased 6.1% year-over-year on a constant currency basis or up 7.7%, excluding the impact of warrants as greater sales and gross profit flowed through with lower SG&A. Q3 was positive from an adjusted EBITDA perspective in our automation product line, and we expect Q4 will be as well as we are scaling towards overall profitability and $60 million in revenue this year. The constant currency calculation is based on a rate of 1.1688, which was last year's average rate for the quarter. As mentioned last quarter, beginning in Q3 of last year, there was considerable movement in the euro. So this quarter, we had roughly a 1% headwind on our reported results.

And for the fourth quarter, if rates stay where they are, it would be a roughly 2% headwind. But please note that for the remainder of the year. On a year-to-date basis, we have achieved net revenue growth of 8.9% or 6.6% on a constant currency basis, inclusive of a $4.6 million provision for warrants. Adjusted EBITDA increased $5.3 million or 9.6% to $60.5 million and was up 6% on a constant currency basis. Excluding the impact of warrants, adjusted EBITDA increased 8.8% on a constant currency basis year-to-date. Moving to the balance sheet and liquidity.

We completed Q3 2026 with a strong liquidity position, improving our cash balance in the quarter by more than $10 million from Q2 2026 and finishing with a cash balance of $53.4 million and no drawings on our revolving credit facility. This brings our reported net leverage down 0.4 turns from the end of Q1 to 4.3x on an LTM basis. We do expect cash to continue to improve in the fourth quarter due to seasonality and our ability to free up some working capital. Our goal remains to achieve net leverage of between 2.5x and 3.0x, which we believe we can do over the next 24 months. Our CapEx for the quarter was $10.3 million, which is up $2.5 million from the prior year. We remain disciplined on spend and have reduced converter spend versus prior year while investing in further production capacity to drive growth in key products in upcoming years in areas like cold chain and to serve growth areas related to our enterprise customers. Our fleet optimization initiatives are driving the improvements in our converter spend. Our machine population was lower year-over-year, but increased from Q2 as we're deploying new converters, but also focused on getting back converters we believe are underutilized so we can put them at more productive locations. With that, I'll turn it to Omar.

Omar Asali

Thank you, Bill. Before I close, I want to touch on a few of our key initiatives and add some color on the rest of the year and into 2027. This quarter and throughout this year, we made real progress on our priorities; scaling automation towards profitability, executing on cost out and efficiencies to improve our margin profile, reducing our exposure to lower-margin business and positioning ourselves to capitalize on the need for sustainable cold chain solutions. Our strategy has been consistent, assemble the most complete end-of-line automation offering in the industry and surround it with partners who play critical roles in how goods move through the warehouse. We believe the more places Ranpak is present in the warehouse, the more value we can create.

Our customers run more efficiently, and we earn deeper, longer-lasting relationships with some of the most sophisticated operators in the world, which is showing up in our automation results this year. In automation, we remain on track to hit roughly $60 million in revenue this year, which was my largest goal coming into 2026. Automation has real momentum in both North America and Europe, and I believe it will be a real growth driver for Ranpak going forward. As Bill mentioned, we have line of sight to automation breaking even on an adjusted EBITDA basis, which we expect this year and positive contribution in 2027.

We also continue to add partners to our ecosystem, including our recent global strategic partnership announcement with Element Logic, which broadens what we can offer our enterprise customers. This partnership formalizes and builds on existing collaboration between the 2 companies, combining Element Logic's expertise in warehouse automation, software and system integration with Ranpak's specialist capabilities in rightsizing, box forming, closing, computer vision and paper-based product protection.

Element Logic acts as both a system integrator and trusted automation partner designing, implementing and supporting end-to-end warehouse solutions that integrate Ranpak packaging automation technologies into our customers' operations. As a result of this partnership, customers gain a more integrated outbound fulfillment flow. Element Logic can design Ranpak's packaging automation into the process downstream of picking and around packing stations rather than treating packaging as a stand-alone add-on.

Together, the companies can connect warehouse automation with specialist packaging expertise to improve cost efficiency, scalability and sustainability while supporting customers as they comply with PPWR regulations. In North America, we have been tuning the PPS portfolio to improve the margin profile. And given the warrant relationship, we are being mindful of where and how we participate in the consumables area with our large enterprise customers. As we signaled last quarter, we are now doing less of the lower-margin business where we have been providing warrants, bringing it to a level where we are comfortable with, and you can see the benefits in our improved mix and margins this quarter.

With our largest customers, we are positioning Ranpak where we see the largest and most valuable opportunities and dedicating our resources to providing these value-added solutions that can grow over the next number of years. We are also adding distribution partners in North America as our enhanced portfolio now includes differentiated automation and cold chain solutions as well as best-in-class paper products is making Ranpak a partner more distributors want to work with.

From a top line perspective, we believe there will be a traditional step-up from Q3 to Q4 due to seasonality and continue to expect to meet our prior guidance for the year. Looking to 2027, the additional cold chain capacity we discussed last quarter is on track to come online in early 2027, positioning us to capitalize on the growing need for sustainable cold chain solutions and believe our ClimaLiner Plus will be a new market standard. I said it last time, but I will reiterate, sustainable cold chain is one of the great opportunities out there right now. And like automation, it gives us another scalable revenue stream. I believe these 2 areas will be top line drivers for us in 2027.

Overall, we anticipate having 3 key areas of focus at Ranpak: PPS, automation and cold chain. I'm pleased with how we are executing on our key initiatives and the path we are on. Despite the challenging macro backdrop, the overall micro backdrop is okay. We remain focused on growth, margin enhancement and deleveraging.

And I believe everything we are doing right now moves us in that direction.

We grew our cash balance by more than $10 million this quarter, have no drawings on our revolver and remain committed to reaching net leverage of 2.5 to 3 turns over the next 24 months. I want to thank our team for their hard work and commitment through a demanding year, especially as we head into peak season. With that, we'd like to open the line for questions. Operator?

Operator

[Operator Instructions]

Your first question is from the line of Greg Palm with Craig-Hallum.

分析师问答

Greg Palm

Curious, just in light of everything going on, I mean, behavior of customers, have you seen any difference, whether that's around our trade downs? And just to be clear on the weakness in EMEA region from -- is any of that related to surcharges? Was there a sort of maybe a pull forward in Q2 ahead of that? And then I guess, it's more of a multipart question, but I would probably argue that the environment has gotten maybe a little or a lot more volatile like in the last month. So kind of what are you seeing real time quarter-to-date in October?

Omar Asali

Yes. Greg, it's Omar. Maybe I'll start, and I'll have Bill chime in. So let's take it geographically. In North America, we continue to see and expect a pretty strong peak season. Despite the volatility, obviously, we're living through that volatility from a macro standpoint with freight and diesel pricing. But it looks like the expectations for the holiday season are still very decent and very robust.

And that's the behavior that we're seeing from our customers. Industrial activity, we're doing better, but I think that's due to our new product innovation, in particular, the Guardian 24 that I mentioned in the call, which is a faster converter, providing a smaller footprint and a better solution out there, and frankly, compares very favorably against foam. So that's what we're seeing on the PPS side. In Europe, I would say with the surcharge, it looks like we had some of our channel partners pull through or pull forward some of the product into Q2. So that had some impact. in Q3. What we're seeing in Europe, Greg, is we're seeing that we're winning at new accounts.

We're seeing some decent trial and close activity, but just the macro environment. We're seeing a bunch of existing accounts, by the way, that remain our partners and customers just demand a bit less product, and we think that is largely driven by the war in the Middle East. Obviously, Ukraine is not helping. And clearly, energy pricing is impacting the environment. So that's what we're seeing in Europe.

As of now, we're expecting a decent Q4, but frankly, expecting similar behavior, if you will, with new accounts maybe adding and existing accounts being a little bit cautious in Europe. In Asia Pacific, we've seen some weakness, and that weakness continues. But when you put it all together, we're expecting, given what we're seeing as of now and Q4 and our expectations that actually peak season is going to be pretty good. In automation, business continues to perform extremely well. Obviously, right now, as you know, at this moment in the calendar, our book is done, and we are just working on executing and hitting milestones to gather revenue and our visibility into '27 for automation continues to be decent.

William Drew

Yes. And I guess I would just add to that, and Omar covered a lot. But as far as just some additional commentary, I think from what we were hearing from the channel partners in Europe was that the sell-through in Q3 remained strong. So they did have some additional inventory that they were working through, but the sell-through to the end users remained pretty solid. So we are expecting Europe to be better in Q4. And then just related to Asia, we have been making a big effort to localize our production there, and that includes local paper sourcing, which will be complete by the end of this year.

So there has been some movement in timing, right, in terms of lower lead times there, resulting in distributors resetting their order patterns. But we are excited about what that will do from a margin perspective for us going into next year and then also just from a competitive standpoint. So some puts and takes in the EMEA and APAC region.

Greg Palm

Got it. Okay. And then just like the margin performance was pretty impressive given kind of everything going on, I mean, both revenue and just input cost-wise.

And so I don't know if you can just kind of help us figure out how much is left in kind of that journey? I mean, in terms of the quarter, was it -- how much was mix related versus some of these efficiencies that you've targeted? And just looking ahead to next year, again, in light of this kind of input cost environment that continues to worsen, kind of how you feel about gross margin in '27?

Omar Asali

Greg, let me just start with high-level comments, then Bill will provide the detail. One, our operating leadership, which many of it -- many of this leadership has joined in the last 18 months, is doing a phenomenal job with our physical footprint, with our lines, our speed, scrap rates, frankly, procurement, which is a big focus of ours. So it's a series of projects I've mentioned in the past, we have instituted Lean and Six Sigma.

We have pretty much an exercise around CI and continuous improvement that is occurring in the company. So it's been a lot of different areas of improvement. From my belief, despite the challenging environment, I think we are probably in the third inning of this journey. I think there's quite a bit more efficiencies that our team is looking at that we're excited about. So we feel really good about improving what we're doing and doing that at much better -- sort of much better spend and much better margin profile.

As Bill mentioned, APAC, in particular, we think there's tremendous room there as we become more efficient. But frankly, we're seeing that in North America. and in Europe as well. So that's an area that we think will add quite a bit of value in '27. To your question about mix, that has helped, obviously, this past quarter a little bit. Whenever we do well with our channel partners, which in North America, we did in Q3, that always helps the margin profile. But Bill?

William Drew

Yes. So I guess, I mean, it varies by region, Greg, in terms of how much is left and kind of the direction. So in North America, I think we've made really good improvements throughout the year and getting better each quarter sequentially, and we do expect that to continue to improve in Q4. In Q3, I would say the benefit from the mix was probably about 1 point to 1.5 points in North America, and then the rest comes from just operating more efficiently and fewer onetime costs. So I think we'll continue to make good progress there.

The operations team is doing really well, and we'll continue to make sure that even with a tighter paper pricing environment, we'll continue to pass on those costs to protect that margin improvement. And in Europe, last year, we had really strong margins in the second half. And in the first quarter, we also had really strong margins, and we're doing everything to protect those. With surcharge, though, we are making sure that we're protecting the gross profit dollars in the second half here rather than just focus on the margin, just given how much the energy costs have increased in the region.

So you would expect some headwinds in Q4 in the European region. And then automation, I think overall, you continue to see continued progress there. In Europe, we continue to take cost out of the machines, get more efficient in terms of how much time it takes us to build the products. And then in North America, as volume starts to ramp up in North America and we get more traction there, you'll continue to see better fixed cost absorption. So overall, we do expect automation to continue to improve the margin profile in Q4 and next year as well.

Operator

Your next question is from the line of Ghansham Panjabi with Baird.

Unknown Analyst

This is Will Kottz on for Ghansham. I think maybe my first question is just around like some of the larger partnerships, Walmart, Amazon. How have those progressed versus your initial expectations? And then on a go-forward basis, how should we think about sort of the rollout of the rest of that given all the steps you've taken with it, obviously?

Omar Asali

Will, I think we feel great about those relationships. Our dialogue with both enterprises is very close, very frequent. We have better and better visibility in some of the future plans and some of the areas where we believe we can add value. One of the key initiatives that we've done, and you've seen it in this quarter, we want to make sure that we're dedicating our resources to the highest impact with these accounts. So we are being very mindful that we are working with them, let's call it, more and more in non-commoditized areas, maybe less in just some of the very basic consumables if there isn't any sort of our solution or any semi-automated solution or automated solution.

And that, we think, just, number one, improves our margin profile. It makes the relationship deeper and more stable. It makes us more value-add and more solution oriented. So that's the stuff that we're doing with them. Our expectation is that in '27, both of these relationships will continue to provide very, very meaningful growth. Part of that growth is coming from what I'm going to call a little bit more project orientation when we're working with them on new introductions and new ideas where we can add value.

But the funnel with us and both of these enterprises that you mentioned is extremely busy. It's extremely robust. We're dedicating a lot of resources. And so far, we feel very good about how those relationships are trending, and we expect that what we've outlined from a spend standpoint from them over the next multiple years will materialize and that they will be using us at that scale and scope.

Unknown Analyst

Okay. Very helpful. And then I guess my last question, just on 2027, like the swing factors. And obviously, you're not going to give concrete guidance, but just like the major puts and takes, right? Automation turning EBITDA positive, the cold chain capacity, just all that stuff in general, can you kind of give us a high-level view of that?

Omar Asali

Sure. So think of the business going forward as 3 key business blocks, the traditional PPS business, where we've innovated, it's very important. Obviously, that's a business where we have a 50-year history. And geographically and in light of wars and geopolitical and macro environments, there's different trends and we're navigating. And as you can tell from this call, we are not just navigating by passing price to our customers.

We're spending a lot in our efficiency so that we can provide more and more value add. And we feel pretty good overall with how we're navigating. And I think we're starting to exhibit much better commercial and operational muscle there. Automation, I think, is going to continue to drive outsized growth and returns. We're very excited that we are expecting a profitable year in automation, the whole year in 2027. Our pipeline looks good. Our conversations are good. I know I highlighted the partnership with Element Logic, but we also have other partnerships that we're doing. So we feel great about that business.

Cold chain, we will be ramping up early in the year. So as we speak, we're building the lines, we're finalizing, expanding our capacity. We think that's going to be a meaningful contributor in 2027, probably starting in the second quarter, and as the year progresses. And we think the opportunity there is huge. And just to let you know, I mean, this is a funnel and a pipeline that we have that's active, that's been tested in many cases, our product has been approved.

So it's a matter of doing the operational scale-up in order to fulfill that. So these are the key pieces driving top line with automation and cold chain driving the bulk of the growth. We're working on the margin improvement. That's another very key building block for us, and we continue to dedicate a lot of hours and effort around operational and continuous improvement. And the goal is you put that together other than driving growth and margin, it should improve our cash profile. It should improve our cash generation and help continue delever our cap structure, which is important for us. So we think the key pieces are there. What we don't know is the macro picture and sort of what happens from a macro picture. But I think the micro at our level, our confidence as a company and our execution is honestly increasing every day.

Operator

[Operator Instructions]

Your next question is from the line of Kieran McCabe with Cantor Fitzgerald.

Kieran McCabe

This is Kieran McCabe on for Troy Jensen. I apologize if my question has been addressed. I joined the call a little late. But I was wondering on the macro environment in EMEA and Europe and Asia, if it doesn't turn around going into '27 or kind of remains as is. Is there any kind of value proposition that Ranpak can kind of express to customers instead of kind of wait and see for the macro to turn? Is there sort of -- I know the last quarter, you mentioned that packaging was -- pricing and economics were competitive with resin given kind of the inflation environment. Do you kind of see that instead of customers waiting for the macro environment, they may realize that there's some advantage to adopting Ranpak regardless of the macro environment?

Omar Asali

Yes, for sure. I think -- and a lot of that comes from the innovation we've been working on in the PPS business as well as coupling with automation, right, which is really a differentiator for us. So I think in this environment, even if things remain choppy, we'll be able to work with customers to provide them with unique and differentiated solutions. Our new products, such as like the FillPak Mini and our new Guardian solutions are getting really good adoption. So that's helping us win accounts.

We're also doing things like a PadPak multi-station, right, which you may have seen on our website, which is a unique offering that enables us to serve some high-volume customers with some of our hybrid solutions, if you will. So we are having really good, I think, deep conversations with customers and able to go out and win business, not just focus on price. In other areas like the Asia Pacific market, the localization efforts that I mentioned earlier, the procurement and operations team has done a really good job of getting us 90% of the way to having local paper sourcing by year-end there, which will reduce our cost profile and enable us to share that with customers to go out and win business. So places like Australia, Japan, we feel good about being able to go out there and win new business starting next year.

Kieran McCabe

And my other question was on the strong growth in automation. Is that kind of how -- what's the kind of the mix of -- is it really your large customers that you have like the Walmarts, Amazons, the larger customers? -- really adopting and driving their programs? Or is there also a substantial portion of that coming from new customers coming online? Can you kind of maybe give a little color as where the drivers of the growth there in terms of that mix?

Omar Asali

I think it's both. I mean we continue to do very well with our large customers.

They're opening more facilities. We're part of their design. We're part of what they're building in next-generation sort of warehouses. So that is a very important driver, and this is why some of our key relationships there are important. But honestly, we continue to win with a number of new accounts. So the growth has been driven by both large enterprises, existing customers as we continue to roll out with them, but we're winning a lot with new accounts. I would say in the U.S. large enterprises tend to be a bigger factor.

And in Europe, you tend to see a lot of new customers buying a few lines here and there and that trend continues. So it's the nature of the economies, I think, of the 2 regions. The U.S. tends to be a bit chunky with bigger guys. Europe is quite spread out. But both are very, very key drivers of growth for us.

Operator

We have reached the end of the Q&A. I will now turn the call back to Bill Drew, Chief Financial Officer, for closing remarks.

William Drew

Thank you, Fern, and thank you all for joining us today.

Operator

This concludes today's call. Thank you for attending. You may now disconnect.