Greif Reports Fiscal First Quarter 2025 Results

Greif, Inc., a global leader in industrial packaging products and services, announced fiscal first quarter 2025 results.

Fiscal First Quarter 2025 Financial Highlights

(all results compared to the first quarter of 2024 unless otherwise noted)

• Net income decreased 87.2% to $8.6 million or $0.15 per diluted Class A share compared to net income of $67.2 million or $1.17 per diluted Class A share, primarily due to a non-recurring income tax benefit of $48.1 million in the prior year quarter. Net income, excluding the impact of adjustments⁽¹⁾, decreased 69.1% to $22.5 million or $0.39 per diluted Class A share compared to net income, excluding the impact of adjustments, of $72.7 million or $1.27 per diluted Class A share.
• Adjusted EBITDA⁽²⁾ increased 5.9% to $145.1 million compared to Adjusted EBITDA of $137.0 million.
• Net cash provided by operating activities decreased by $35.3 million to a use of $30.8 million. Adjusted free cash flow⁽³⁾ decreased by $13.7 million to a use of $61.9 million.
• Total debt of $2,840.2 million increased by $548.4 million, primarily as a result of the acquisition of Ipackchem. Net debt⁽⁴⁾ increased by $526.6 million to $2,639.1 million. Our leverage ratio⁽⁵⁾ increased to 3.63x from 2.46x in the prior year quarter.

Strategic Actions and Announcements

• Intend to divest our approximately 176,000 acres of timberland in the Southeastern United States. Proceeds will be applied towards debt reduction.
• Announced closure of A1 uncoated recycled paperboard machine in Austell, GA as well as the containerboard and uncoated recycled paperboard mill in Fitchburg, MA.
• Progress on announced cost optimization project proceeding on target, with $13.0 million of annual run-rate savings achieved through the end of first quarter 2025.

Commentary from CEO Ole Rosgaard

“Greif is actively managing a historical period of industrial activity contraction while simultaneously transforming our internal processes and our portfolio mix for optimal alignment to long-term profitable earnings growth.” said Ole Rosgaard, Chief Executive Officer of Greif, “This quarter highlights the resilience of our new business model amid multiple headwinds and demonstrates our willingness to invest in the long-term future of Greif while managing the present. We’re excited for what the future holds and for accelerating our growth in both the near and long-term. Our announcement to seek the sale of our Soterra land management holdings demonstrates our commitment to constantly assessing our business portfolio for maximum value creation and taking decisive action to pursue long-term sustainable earnings growth.”

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(1)	Adjustments that are excluded from net income before adjustments and from earnings per diluted Class A share before adjustments are acquisition and integration related costs, restructuring charges, non-cash asset impairment charges, (gain) loss on disposal of properties, plants and equipment, net, (gain) loss on disposal of businesses, net, and other costs.
(2)	Adjusted EBITDA is defined as net income, plus interest expense, net, plus income tax (benefit) expense, plus other (income) expense, net, plus depreciation, depletion and amortization expense, plus acquisition and integration related costs, plus restructuring charges, plus non-cash asset impairment charges, plus (gain) loss on disposal of properties, plants and equipment, net, plus (gain) loss on disposal of businesses, net, plus other costs.
(3)	Adjusted free cash flow is defined as net cash provided by operating activities, less cash paid for purchases of properties, plants and equipment, plus cash paid for acquisition and integration related costs, plus cash paid for integration related Enterprise Resource Planning (ERP) systems and equipment, plus cash paid for fiscal year-end change costs.
(4)	Net debt is defined as total debt less cash and cash equivalents.
(5)	Leverage ratio for the periods indicated is defined as adjusted net debt divided by trailing twelve month Adjusted EBITDA, each as calculated under the terms of the Company’s Second Amended and Restated Credit Agreement dated as of March 1, 2022, filed as Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended January 31, 2022 (the “2022 Credit Agreement”). As calculated under the 2022 Credit Agreement, adjusted net debt was $2,558.4 million and $1,989.9 million as of January 31, 2025 and January 31, 2024, respectively, and trailing twelve month Credit Agreement adjusted EBITDA was $705.7 million and $807.4 million as of January 31, 2025 and January 31, 2024, respectively.

Note: A reconciliation of the differences between all non-GAAP financial measures used in this release with the most directly comparable GAAP financial measures is included in the financial schedules that are a part of this release. These non-GAAP financial measures are intended to supplement, and should be read together with, our financial results. They should not be considered an alternative or substitute for, and should not be considered superior to, our reported financial results. Accordingly, users of this financial information should not place undue reliance on these non-GAAP financial measures.

Fiscal First Quarter 2025 Segment Results

(all results compared to the first quarter of 2024 unless otherwise noted)

Net sales are impacted mainly by the volume of products sold, selling prices and product mix, and the impact of changes in foreign currencies against the U.S. Dollar. The table below shows the percentage impact of each of these items on net sales for our primary products for the fiscal first quarter of 2025 as compared to the prior year quarter for the business segments with manufacturing operations. Net sales from completed acquisition of Ipackchem Group SAS (“Ipackchem”) products are not included in the table below, but will be included in its respective segment starting in the fiscal third quarter 2025.

Customized Polymer Solutions

Net sales increased by $67.1 million to $295.1 million primarily due to $58.5 million of contributions from recent acquisitions.

Gross profit increased by $16.4 million to $60.6 million. The increase in gross profit was primarily due to the same factors that impacted net sales, partially offset by higher raw material, transportation and manufacturing costs.

Operating profit increased by $2.1 million to $13.8 million primarily due to the same factors that impacted gross profit, partially offset by higher SG&A expenses due to recent acquisitions.

Adjusted EBITDA increased by $13.7 million to $39.5 million primarily due to the same factors that impacted gross profit.

Durable Metal Solutions

Net sales decreased by $28.3 million to $342.2 million primarily due to $16.9 million of negative foreign currency translation impacts and $10.3 million attributable to lower volumes.

Gross profit decreased by $2.7 million to $63.1 million. The decrease in gross profit was primarily due to the same factors that impacted net sales, offset by lower raw material costs.

Operating profit increased by $0.7 million to $37.6 million primarily due to lower SG&A expenses, partially offset by the same factors that impacted gross profit.

Adjusted EBITDA increased by $0.5 million to $45.2 million primarily due to the same factors that impacted operating profit.

Sustainable Fiber Solutions

Net sales increased by $32.6 million to $561.4 million primarily due to $25.8 million from higher published containerboard and boxboard prices.

Gross profit increased by $15.1 million to $103.4 million. The increase in gross profit was primarily due to the same factors that impacted net sales, partially offset by higher raw material costs.

Operating profit decreased by $4.6 million to $3.6 million primarily due to higher SG&A expenses and higher impairment charges related to plant closures, partially offset by the same factors that impacted gross profit.

Adjusted EBITDA decreased by $1.5 million to $51.5 million primarily due to higher SG&A expenses, partially offset by the same factors that impacted gross profit, excluding impacts from depreciation and amortization.

Integrated Solutions

Net sales decreased by $11.4 million to $67.1 million primarily due to an $11.3 million impact from the divestiture of Delta Petroleum Company, Inc. (the “Delta Divestiture”) during the third quarter of 2024.

Gross profit decreased by $4.9 million to $18.4 million. The decrease in gross profit was primarily due to the Delta Divestiture.

Operating profit decreased by $7.2 million to $4.9 million primarily due to the same factors that impacted gross profit and lower gains on disposal of properties, plants and equipment, net.

Adjusted EBITDA decreased by $4.6 million to $8.9 million primarily due to the same factors that impacted gross profit.

Tax Summary

During the first quarter, we recorded an income tax rate of 35.8 percent and a tax rate excluding the impact of adjustments of 30.3 percent. Note that the application of FIN 18 frequently causes fluctuations in our quarterly effective tax rates. For fiscal 2025, we expect our tax rate and our tax rate excluding adjustments to range between 27.0 to 32.0 percent.

Dividend Summary

On February 24, 2025, the Board of Directors declared quarterly cash dividends of $0.54 per share of Class A Common Stock and $0.81 per share of Class B Common Stock. Dividends are payable on April 1, 2025, to stockholders of record at the close of business on March 17, 2025.

Company Outlook

Our markets have now experienced a multi-year period of industrial contraction, and we have not identified any compelling demand inflection on the horizon, despite slightly improved year-over-year volumes. While we believe we are well positioned for an eventual recovery of the industrial economy, at this time we believe it is appropriate to provide only low-end guidance based on the continuation of demand trends reflected in the past year, current price/cost factors in Sustainable Fiber Solutions, and other identifiable discrete items.

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About Greif

Greif is a global leader in industrial packaging products and services and is pursuing its vision: to be the best performing customer service company in the world. The Company produces steel, plastic and fibre drums, intermediate bulk containers, reconditioned containers, jerrycans and other small plastics, containerboard, uncoated recycled paperboard, coated recycled paperboard, tubes and cores and a diverse mix of specialty products. The Company also manufactures packaging accessories and provides filling, packaging and other services for a wide range of industries. In addition, Greif manages timber properties in the southeastern United States. The Company is strategically positioned in over 35 countries to serve global as well as regional customers. Additional information is on the Company’s website at www.greif.com.

Contact:

Matt Leahy – Vice President, Corporate Development & Investor Relations – Matthew.Leahy@Greif.com – (740) 549-6158

Source: Greif, Inc.