GREIF, INC Q1 FY2025 earnings call

• Investor Day Recap: Announced new 2027 financial commitments of $1 billion EBITDA and $500 million free cash flow, with levers including over $100 million of known positive discrete items, volume recovery, and a $100 million cost optimization effort.
• Cost Optimization: Identified $5 million of run rate savings, reaffirming expectation of at least $15 million to $25 million by end of 2025; $13 million achieved includes mill closures but timing of closure costs considered.
• Organizational Realignment: Intention to sell Soterra's timber portfolio of approximately 176 acres to reduce debt, with support for colleagues during transition.
• Current Quarter Trends: Varying demand trends across products and regions; Polymers up 2.7%, Integrated Solutions with double digit growth, Fiber slightly up, Metals impacted by soft industrial economy.

In the first quarter of 2025, Polymers was up 2.7% driven by small containers and IBC demand in ag and food sectors, particularly in EMEA. Integrated Solutions saw volume growth with caps and closures and paints, linings and adhesives experiencing low double digit growth. Fiber had slightly up volumes with operating rates in line with the industry. Metals were most impacted by the soft industrial economy due to high exposure to bulk chemicals, petrochemicals, and lubricant markets. Polymers contributed to a portion of revenue, Integrated Solutions had its own revenue contribution, Fiber and Metals also had their respective revenue shares.

• Fiscal 2025 is 11 months; low-end EBITDA guidance raised to $710 million, free cash flow guidance raised to $245 million.
• Factors contributing to guidance: $27 million positive price cost, lower transport and manufacturing costs, and run rate cost initiatives savings, offset by mill closure headwind.
• Expectation is a low-end view, with reassessment of range guidance in subsequent quarters.

• Soft industrial economy impacting the Metals segment.
• Uncertainty in demand sentiment in North America.
• Potential tariff changes and their impact on P&L exposure.

Q: Go back to first quarter results specific to fiber.

A: Came in line with expectations, with SG&A allocation impacting perception as margins expanding in fiber led to a bigger portion of SG&A being allocated to it.

Q: Timberland sale color.

A: Proceeds to be used to reduce debt, ongoing process with unsolicited offers received, and it's a different asset from the 2021 sale.

Q: Guide bridge on price cost.

A: Breakdown of $27 million price cost spread includes $19 million from containerboard price increase and OCC cost assumption, with remaining split across other substrates, polymers, and steel.

Q: SG&A margin expectation.

A: EBITDA margins are expected to steadily improve through the year due to volume lift and fixed cost leverage.

Q: Competitive landscape in polymers and metals.

A: Focus on value over volume, no loss of market share, and competition tends to be more hungry for volume while Greif maintains service and product quality.