GREIF, INC Q2 FY2025 earnings call

• Recognized 14,000 global colleagues, named Newsweek's Top 100 Most Loved Workplaces for third consecutive year and Gallup's Exceptional Workplace Award for second year. Colleague engagement score in 86th percentile with 94% participation.
• Fiber team won Supplier Innovation Award from USPS. 16th consecutive sustainability report.
• Cost optimization: $10M run rate savings towards $15M-$25M full year, $100M total. Closed L.A. paperboard mill (72,000 tons capacity) to streamline network.
• Portfolio resilience: Polymer volumes up in small containers/IBC, down in large drums; Metals down 5% due to soft chemical/lubricant markets; Fiber volumes down slightly but corrugated outperformed; Integrated Solutions grew with recycled fiber.

Customized Polymer Solutions

• Adjusted EBITDA increased $19 million year-over-year to $53 million, driven by volume growth, favorable product mix, and value-over-volume pricing. Target growth end markets (agrochemicals, food and beverage, pharma, flavors and fragrances) showed year-over-year growth.

Durable Metal Solutions

• Sales lower year-over-year due to soft industrial markets, but gross margins up through value-over-volume focus.

Sustainable Fiber Solutions

• Adjusted EBITDA was $80 million relative to $50 million in the prior year. EBITDA margins improved to 13.3% from 8.5% in the prior year. Corrugated business outperformed with high single-digit growth per day versus an industry decline of 2%.

Integrated Solutions

• Continued growth led by recycled fiber, while external volumes in closures, paints, linings and adhesives held steadily as we managed internal needs versus external demand.

• Raised adjusted EBITDA low-end guidance to $725M from $710M and adjusted free cash flow to $280M from $245M due to better price/cost in Q2 and revised H2 expectations.
• Volume is a key variable for upside to low-end guidance. Guidance reflects demonstrated execution, price/cost improvement in fiber, polymer growth, and disciplined cost structure.

• Tariffs monitoring with no major demand shifts yet, but potential disruption. Macroeconomic volatility affecting industrial end markets, particularly in North America's exposure to industrial sectors.

Q: Josh Vesely asked about customer conversations on end market demand and tariff-related raw material inflation impact.

A: Ole Rosgaard said sentiment unchanged, housing and auto sales low, tariffs reoccurring themes impacting chemical customers. Lawrence Hilsheimer noted max tariff impact ~$10M, team minimized impact, and steel producer price increases provide margin lift.

Q: Michael Roxland asked about elevated SG&A.

A: Lawrence Hilsheimer said factors include incentives, Ipackchem entry, currency impacts. Target SG&A below 10% long-term with revenue recovery and cost optimization.

Q: Matt Roberts asked about $725M guide underpinnings and tariff impact on April/May demand.

A: Lawrence Hilsheimer said guide reflects $53M price/cost benefit, volume impacts. Ole Rosgaard noted no direct tariff demand shifts, indirect impact from macroeconomic factors.

Q: George Staphos asked about paperboard closures' cost per ton and operations.

A: Lawrence Hilsheimer said annual EBITDA positive impact $10M, cost optimization includes 70+ work streams (SG&A rationalization, network optimization, etc.).

Q: Gabe Hajde asked about metals competitive standpoint and URB integration.

A: Lawrence Hilsheimer said metals price/cost mix positive, volume negative. Ole Rosgaard noted URB integration over 50%, not a high priority due to industry structure.