Greif (GEF) 9 Jun 222022 Q2 Earnings call transcript

Company Profile

Participants

Matt Leahy	Vice President of Corporate Development and Investor Relations
Ole Rosgaard	President and Chief Executive Officer
Larry Hilsheimer	Chief Financial Officer
Ghansham Panjabi	Baird
George Staphos	Bank of America
Adam Josephson	Key Banc
Gabe Hajde	Wells Fargo
Justin Bergner	Gabelli Funds

Call transcript

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Operator

Good morning. My name is Rob and I will be your conference operator today. At this time, I would like to welcome everyone to the Grief Second Quarter 2022 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers remarks, there will be a question-and-answer session. you. Thank Instructions] [Operators President Development Vice you Investor may begin. of Leahy, and Corporate Relations, Matt

Matt Leahy

morning, to President Chief Leahy, everyone. fiscal good by Hilsheimer, Investor and Thanks, Welcome Greif's am I Executive conference of Development joined This Officer; Relations President Larry and XXXX Rosgaard, Greif's call. is Chief Vice Financial Matt Greif's Officer. Greif’s Ole Corporate and and earnings quarter second and

please information with ask at questions end today's to Regulation the one consider Fair before one X. accordance because basis. discussing Disclosure, on question regarding We prohibited will take turn follow-up to Slide individual returning important questions call. of limit you with issues from In the yourself to an Please and Please we're material you non-public queue.

make during involving events. Actual As today's statements and related from will materially differ we call, those to forward-looking beliefs reminder, discussed. results future expectations, plans, a could

certain metrics we'll be non-GAAP presentation GAAP turn over comparable financial referencing reconciliation the the to most now, directly and measures appendix I presentation. of that on X. will Additionally, And be today's Slide to can Ole in found the

Ole Rosgaard

Thanks, Matt and everyone. morning, good

so opportunities now and of advancing that EPS execution from of the commitments teams are resulting Greif second continued results sheet results. despite pandemic. XXX and ratio. end further We Build in industrial an delivered quarter EBITDA away published with yesterday global release the up encourage begin to Please team we execute second target QX quarter adjusted you growth where comp second pressures, delivered packaging quarter results June of we materials. the XX, continue to Slide greater adjusted weeks balance related and versus XX% this of sustained over event found will which results. the leverage on million of to these results strong disruptions, outstanding Day, in sales our financial accomplishments detail. to our challenges and a the to X earnings to Last We be two turn These can $X.XX, within Last about to external outstanding inflationary Strategy. XXXX. discuss attend Our chain excellence and Build today's supply our in presentation Information is fiscal we strengthened in low Investor to Global delivered near just record year-over-year discussion the our which our detailed I with disciplined

some remained the well our despite GIP and material solid our day volume X% with supply slightly resin-based prior of through patents] supply see to availability IBC chain year. versus customer continue our facing customers prior year, lockdowns related Generally in as many per Global China, markets healthy single-digits in volumes up chain global labor COVID steel low-to-mid due in the as EMEA. did impact day demand speaking, demand [ph]. versus more portfolio We drums disruptions, with drum which per to end [order than and constraints challenges quarter, plastic by raw and fell their

raw quarter over the contractual pricing pressures support and incremental mechanisms transportation, value margins will pass-through both benefited business volume on helped focus material GIP year-over-year in despite our cost to we continued going from materials, Our in lift actions non-raw slightly We continue expect the energy. and labor, that forward.

versus first due the now to challenging times. these customers, prior to to exceeded ability sales our for to including committed Similar to the Adjusted year, by during grades. average global by X eight the energy across us rose million turn to service our provides OCC weeks. in quarter, to to quarter products I higher products discipline I million higher and ask At are Paper higher Packaging versus execution backlogs relentless million please. delivering Page you second partially volumes which higher significant XXX prior Our raw and strong sales, their a GIP effectively from costs. drag commence inflation. manage with teams EBITDA XX transportation, by costs, team legendary continued year all demand material, selling our paperboard mill and due all robust. and XX paperboard quarter-end, prices offset the combined rose remains quality

end QX sheet XX% Second up quarter day were XXXX digits year the in volumes in the given our system solid feeder were year-over-year. box the versus our volumes impressive prior result, quarter. through where comparison per nearly a up This historically single key our strong low markets demand remained as was CorrChoice to

business delivering CorrChoice above is levels. pre-pandemic still substantially Our volumes are that

with quarter particularly turn volumes on versus demand, day similarly costs. and strong paper it market to I the now up core Slide cube X. year prior end durable’s in per our will and were Second CFO, moving Hilsheimer mid-single-digits Larry over

Larry Hilsheimer

attend business as as on where we substantially Thank our our our create changes. colleagues you, past our discuss upcoming to path to our today. record We believe outstanding plans with service our continue financial customers, the improved cost offerings, well for and product continued over additional quarter material Ole. Good outperformance teams, morning. and price We by I encourage start the thanking Thank of an focus grow focus the for raw our years highlights exceptional of joining each our to providing resiliency you will you value Like Investor to our and increases want to unrelated forward for to second us four Day, shareholders. results. Ole, on

quarter. significantly XX million most Second rose income, inflation. recent year-over-year an million a in and year over of our higher quarter expense million income due the to sales prior benefited interest the higher Absolute XXX as $XX versus tax of percentage trailing of of a SG&A of related the EBITDA debt despite as that Below non-volume energy largely year-over-year quarter non-recurring Absolute prior portfolio the adjusted which of as line, dollars proportion versus four items, tax basis. larger labor, were due year XX refinancing cost basis by at to to well by discrete million were and higher XX% roughly quarter, as OCC transportation, well points aggressive fell over flat roughly headwind fell on XX jurisdictions, rates. in our interest paydown dollars debt quarters, the lower due prior

Our $X.XX outstanding second to XX%. resulted of flat quarter over share. an approximately non-GAAP earnings rate XXX% was year-over-year roughly in growth at tax These year-over-year impacts a adjusted

as was chain constraints. flow Finally, in XX adjusted of due by cash the primarily on certain well million markets quarter stocking of continued supply inflation second free to inventory as affected year-over-year, lower strategic most capital working impact roughly

with turn priority customers anticipate that those Our our and Slide serving excellence and and supply markets. our Please ease temporary with we position inventory target X. to in remains sync chain is highest will

environment. fiscal through and as are inflationary result a team's significant of managing our deliver increasing XXXX We our a customers continuing wealth extraordinary efforts guidance and for to

fiscal We adjusted generating are of raising anticipate still midpoint free XXXX. the in XXX quarter per strong performance performance adjusted share and expectations share and second back to We solid XXX the fiscal continued $X earnings cash XXXX, of of the guidance of reflective of by between a our flow million million year. our for $X.XX half in

$XXX cash higher fully XXXX, our as reflected versus capital, to free from million While to in in well that drag tied fiscal as flow not have XXXX, is and taxes profit will increase due higher be continued expectations the increased in primarily nearly cash increased, revenue. working improvement CapEx which

full-year to continue in us our efforts those to capture hard guidance. capital of will upside help half drive working year some We on flow free the back the and hope cash

of appendix turn Finally, in you deck use to a your needed. slide will with find the as modeling X. today's key for Slide assumptions Please

to balance that we the outstanding sheet past lower are Our execution years target of ratio has aggressively our deleverage now range. few close so the in end our our over leverage resulted ability to

to Our pursue upcoming the solid back Day. the and things shareholders. gives to deeper our that, capital to cash at our forward back return [Technical opportunities deployment look With diving I'll Ole us Difficulty] strategy to flexibility Investor I turn business grow financial to position into new

Ole Rosgaard

the serve be us your will provided our detail. brief Strategy and better of we encourage and and participate of to line and continued improving believe teams Greif. Larry. in on businesses our outperformance With Build continue in open Thank the in interest QX the business in you serve Strategy. you customers. we questions. proud for Day our our well will overview Investor We this and greater highly you, and this session. growing Last to new Operator, that, a At June our our discussing XX, attend thank path ahead and for I want to Build please our In I'm engaging Last to much all call, strategy

Operator

from Panjabi your And line from question Baird. comes Ghansham first Instructions] of the [Operator

open. Your line is

Ghansham Panjabi

the of What's about the Hey, for assumptions? guys, segments, the as thinking complexity can taking volumes are segments given for the And volumes an May the especially of just on the my half first progressed my to good month the world sense progress. year? in and how guess a you Thanks morning. your across congrats all just of I you questions question, each the back GIP how for operating across give us standpoint? all two embedded from for in

Ole Rosgaard

I'll take one. that Ghansham. Thanks,

world. me the let around So, take you

global of of us, U.S. the the XX% are as about and they material markets EMEA First most for all, for GIP account our sales.

we comments the distributor petrochemical shared softness, my their lockdowns, customers' down relative per general On day. supply there I XX% today from IBC issues was to due And EMEA. mid-single-digits in focus to primarily impacting was QX. and for story softness again, EMEA, were was was that's which that's from are over really and remains up flat there. particularly, China the and per and low our U.S. we day the lines and particularly and Plastic low-single-digits supply what demand day from was for it due chain here say and day, I’ll mainly And at strong, mix down Demand per conditions chain ag] in digits and issues and ability On bit and similar single, general conflict softness to that steel and Eastern Europe levels steel IBC stemming of produce mid-single-digits in U.S. online. up meet up strongest markets day. to from that was and to very coming per a So, plastics, the was ongoing demands. chemical in softer in strength per are And automotive a [ph]. [food can essentially new

Larry Hilsheimer

in robust. results very May June be the continue Ghansham to early

will Just as year customer the that off expect QX that XQ, we base. see with through continue discussions remainder on since no and our of our team's commercial based drop the we

Ghansham Panjabi

benefited you've specific impact the segment? from and what past so a in I'm so for Okay, quarter, between timing to great. on second materials because second a extent forth. quarter? the drove and And then the some that Was exactly in raw spread the so leverage pricing terms to that in material asking of GIP of operating the and

Larry Hilsheimer

Yes. the That was million. because that of last impact in we a We of year, steel mentioned the costs Ghansham. significant positively had throughout increase the rapid results year our tailwind $XXX to tune

are having at this that repeat of We year a not all.

So but mean, We benefit I into relatively little North just flat. gone. at had it's it's a an and March, the consistently some just little for picked instead materials. that had would that more bit drop while off was costs that in for have flat. crew What have teams decrease relatively a little didn't off price our back is And become that forecast. happened bit in part, that have pickup has quarter more April. it's that related other to America than particular we up built the but impact one-time And slight most parts in increases in our we North a and negatively, fall excellent second is in we've fall importantly, steel America, off to it us that getting in had EMEA, thought have most remained really

anymore. when – [Technical GIP, broad went a categories Difficulty] five well was really covering excellent ago, three, an on our back doing give inflation cost to executing in of we back teams now whole as cost it just on group used So, and we are Ole it years started well do leading we're back under the margin, of that not where job we giving

Ghansham Panjabi

much. so Thanks Awesome.

Operator

George the Your from Bank next America. question of from line comes of Staphos

Your open. line is

George Staphos

into versus and Ghansham that or unpunished. the are the details at for morning. my wanted for such Hey, for know Hi, up second the what of guys. the building only then, half questions. since piggyback, earnings Thanks and it just you expectations half year Good up midpoint look I to set back taking sort you back had are us, good really so Larry, so, strong $X.XX that We obviously Said start fact the compression you half what deed really, in last at your for numbers of that year? first through spread for that No are rest over year. materialize to assuming goes the the start compression that you differently, it talking the a of the had cushion to spread you've decelerate? about in building Is didn't earlier more were half year?

Larry Hilsheimer

question, Good George. Yes.

year we so, that in of And FPS the in the we'll the we reflecting half GIP ago. second no are have had year. segment, the a Obviously, profits longer

you've in decline, in as past that not roughly not [pace our incline] respect of a cost it's times we it Then we've timing. half predicting numbers. us, XX about of is for million go in decline all it's compression, will year, their will be near and many think which steel but [ph] So, the somewhat are got down, rapid talked with that to we and or that

have that quarters. So, work on mechanisms faster calendar we generally the

So, see real where for September weeks, be steep don't And it that We don't happening. the before rapid decline next that is had we June of reason the see at a would matters. in few some a If end bad. either. decline we

So, a drag. have the we've bit decline will little half of some second built in that in

[ph] of talked first half little have previously, our the GIP as than of [lags] as [resting it weaker So, bit the as the And not to immediately mechanism process] to second countercyclical businesses substantially. little we half, like, through you'd in is you a be of will a other. benefit have but about we've the paper get And price being work [ph]. each

related going to So is the extremely to be second strong half PPS of pricing.

second the favorable. so very half And overall looks

George Staphos

Thanks, is that lot, it's a million, the Is get way we XX to on of point said compression question. Larry. not million, XX maybe I there's to the expect a quantify I You that million of X second a just before – some. way to should – clarification broadly? terms but there? there there in Is maybe spread that

Larry Hilsheimer

had think Matt those – Leahy, statistics. we you've I and got

XX%, what half then We for EBITDA GIP of the and the have is our year of roughly like, in first that XX% right?

Matt Leahy

roughly that's correct. Yes, I think

Larry Hilsheimer

related business. And And say you the so million helpful. FPS, continuing to million per XX out, the to that's George, hopefully GIP XX if backed get rest you

George Staphos

Yet to you certainly question can earlier? for the inventory, end Greif hearing Understood. guess that sectors, the how you talked various has hearing the artificial that to slowdowns that. theme, going how from your service this you through quantify, a I as really What a bit well, in is where supply you paper, To well? Larry, the got your in and backlogs think the customers, that so backlogs that are thanks intelligence can Thank double-booking, remaining average on how I consistent about customers been double-ordering, very, eight-week market. much businesses you and very little you. for kind we're now strong. next the across much across relative you're had the potential for of whatever this, about having on you maybe chain much the do mentioned some is that you've extra exists backlog extent inventory, some extent

Matt Leahy

stock have It's is Yeah. to safety sure then only here. to I just in I'm clarify sure will mean, our PPS. make add not to Ole something in And and GIP.

George Staphos

understood. Understood,

Matt Leahy

we where our situation there customers. some the can't just were experienced a want not that Some in be places in around do the world to serve issues past chain teams supply we in where

had missing scramble customers. then [indiscernible] we delay end China to had last like crazily from on not three-month a America Latin year up we that to So, into steel

consumer, everybody that hurricanes little there in we'll saying as going world. teams. would pockets the there's is been and It's significant say, like I So, not talk other paper-end business, our just know, it’s bit around work where ourselves to from there's through concern small scare have hugely do Ole we're little maybe I we're about other demand that, all recession our is afraid a a out don't into but I'm the the but a but to to screaming not of customers, add to pockets bit the they're it to I've our and of George but anything offset change. demand by saying We've equally that? seeing where places bit a stuff got in robust,

Ole Rosgaard

we terms No, we just normal very, seen follow and that and of remain Box our retailers to PPS say, have building eight demand we issue same Big inventory in our is in and the backlogs very at weeks read very closely, but solid. business the

George Staphos

it I'll over. guys. you, turn Thank

Operator

Banc. line Your next Adam of comes the Key from question from Josephson

Your line is open.

Adam Josephson

Thanks. Good that demand to XQ, [ph] assume the is or expectation be you're appreciated? half year or I demand is volume Ole, be for demand-wise you demand Hope performance your reflected what weaken would feeling in going consolidated alright. seen much, drop expecting haven't fiscal far can said us exactly Larry for you you ago think off, half? if in just Larry, will the a first all all, in thus give the moment. that and at everyone. versus not are your versus we help Any second back – any you the morning, [shatter] a half should that in

Larry Hilsheimer

pick see forecast And supply then frankly, drop really EMEA the our saw the steel the to continues demand the volume in is year our related lockdowns. there, there. see in is a obviously remainder piece there. robust, but Yes. we remainder of big year, and And pretty base. robust. commercial as volume expect us, Latin we the the teams we'll big lockdowns the where pie customer off to we're is you diligently when some QX, we the conflict seeing our And with in China side, we We on issues in in some for see lift of chain very related demand now. aggressively trends what up to tend and weakness we not volumes of Adam, free-up and expect China do talk particularly who we for as we with work America North is that America that the

Adam Josephson

Okay.

expecting words, back erosion so in really other …? half So, any not – not whatsoever the you're you're in demand

Larry Hilsheimer

they’re negative is not the time we’re Yeah, mean reality our No. customers. any economic year-end. fiscal I of everybody forecast, our I it think most a is, seeing but hearing recession the before from even concerned, not

that it's I from with hearing is what consistent So, think we're our customers.

Adam Josephson

appreciate I it. Got that Larry.

cost very some this have you know year you one-time of benefit is us, historically? in this a the year, year. benefit price cost price what price a prices, of steel and total you're Because And frame last On have for you're expecting can this embedded consolidated segment? sense paper, how us in with last guidance issue, or year in terms I either so from going million I'm by substantial your benefit basis the experienced cost had you've just just what XXX you to you rising help hoping in what we on versus year price cost experienced big it can a obviously,

Larry Hilsheimer

we you expansion basis, in maintain some of the tailwind, loss answer, working And and relatively flat? of it at price overcoming and is substantial roughly I'll mean, I and will that's pretty really year look rest IBC last our you to obviously our on that teams, Yeah, accomplishment million just on maintaining combination of ask increases. apologize diligently year side that are on had we that me. the EBITDA Plastics know, it of have think and we margin last on this these the I $XXX I I Leahy, other that investments of because go in expecting and behalf versus made is front to relative business to, you GIP it a then Matt of that GIP don't the maybe, is year the and very

Matt Leahy

first first to a basis? talking half You're half on

Larry Hilsheimer

I No, roughly, [year-over-year] for expect [ph] full-year and we – GIP where mean…

Matt Leahy

Yeah.

think that's correct. Larry. That's I That's right, right.

Larry Hilsheimer

We operations, volumes. increases. the side Nothing obviously a actions pick-up should related of And high in been. Yeah. based have to and boxboard are that predominantly do our at also price the that PPS in the it’s math having [ph] where really opinion which system to the are relative executing pricing our really on they mill the currently to you level our try in [right] containerboard, performance to we're

that of capturing the we're year. rest so, for the And benefit

Adam Josephson

hazard expecting though just Larry, make even how if not clear And PPS benefit don't bulk so on have guess is price you're the of you you're the containerboard, this in been mind, roughly expecting of benefit in can paperboard, you or – obviously you frame can price a cost year? much the increases in price substantial business sure that. just a total then there in PPS, containerboard, I'm cost

Larry Hilsheimer

I didn't quantify that, Adam.

I can't. So, no,

Adam Josephson

containerboard Okay. is terms this than cost benefit more But boxboard price of much in year?

Larry Hilsheimer

Yes.

Adam Josephson

you. Thank Okay.

Operator

Hajde next Wells comes Your line from Fargo. from question Gabe the of

Your is open. line

Gabe Hajde

Larry, Ole, Matt, good morning.

Larry Hilsheimer

Good morning.

Gabe Hajde

serves, One I me thing business look of an the side. was memory And [ph] predominantly, XX, down that's that Slide at up think if there. volume Ag in When out I jumped LatAm on GIP. [XX%] being

kind question. there there. to else, suggest it when kind two-part we look fairly a So, of industrial production at anything down a challenging seem of backdrop would again, data, Is

prior hurt piece and not cycles business about fertilizers them, for two, or we not farmers, and next listen plant today down a know being differential side? plantings on are typically So, stuff get than help that, there? think when I bigger being how of years either year, the And like the it yields to I maybe XX to to ago? the business Because could what's your relative or when was to ag X, farmers over able afford causing that it's then able your

Ole Rosgaard

Yes.

is market there what actually years and and been ago you our of a again, to our through – Ag a not and shares big of but a and lot part in LatAm excellent an competition. have as know on, place he's captured food and so doing do have put business just a It's we well. few LatAm, and able juice volume they we in obviously So gained loop from job in new just leader chemicals

and focus see you on a service that's So, what sustained customer here.

Larry Hilsheimer

for Gabe, don't I because if a my I'm I found sort that address of Adam inserting the you just and minute, going go to notes. mind question want to raised back –

what is, OCC ton look, would half for over on year. a $XX for roughly on you call full-year. of year. We've same So, I think the for We've CRB tailwind couple $XXX about know, thing we containerboard the a, got know, hundred and say a a it's bucks got the on we've got know, slightly it you tailwind URB, and you on

get So Adam, numbers asked. I you the think those you help will to question

Sorry, Gabe.

Gabe Hajde

or And disruption seems No in it again there but I Europe, over worries. us like obviously a of on on like you European business? in Eastern of mean, the give that side insight as stuff Ag, GIP crop and plantings can terms that there's the is your Ag impact it how either any lot could food just

Ole Rosgaard

Yes.

side, very, obviously not Ag also conflict, be of on but West will good U.S. the the because the the Europe, season on strong. looks the then season droughts so have very in So, the and Coast, you in

over so what we perfect have had never And the years, the you storm.

that's time by it’s down [ph], particularly strong. and one low productivity another there's up where year, you and very region always my you and know that’s and have the has So, been Americas [Iberia] then, here held draught region this

Gabe Hajde

sheet you macro condition. terms a Xx of kind think in you in what's under shareholders, peak the gears capital would good leverage that of something below a day] tent [high or for Switching balancing target, kind out your maybe that the the little buyback? concerns we to bit a that like little about, there. Larry, kind how balance given but really share about get when of [ph], to of you think bit. try for running about that returns Okay. is dividend framework see versus think guess special maybe And a X.Xx I to

Larry Hilsheimer

we've that shareholders to to analysis ahead through we a down in more that know, we pretty [X.X%] in anything the Gabe, I I pretty then, even we [Technical to shareholders. and but for obviously both would two? for we'll down return find share year do mean, capital EBITDA be analysis return before But rest ourselves mean not to and to our I return put cash sudden, [already] back substantial forecast of recessionary do much all come the our still point, you if cash are paydown, to [ph] risk QX and think that rest at Day risk pay thoughts substantial mean, our mean, below I and we'll [indiscernible]. the the and situation expand frankly, know, of go a will about the us put to and would on don't we at at where Yeah. try year debt we have don't of some to be get got in top we you down debt position. of analysis with significant something, of do because you down Difficulty] that going have something look production to go we Investor downturn, we production type when a get above the I that. on further where [ph] want a and in a pretty of even we could this to do growth we'll did

Gabe Hajde

you, Great. guys. Good Thank luck.

Larry Hilsheimer

Thanks.

Operator

of line Justin the from from Gabelli comes question Funds. Bergner next Your

Your line is open.

Justin Bergner

Good Good morning, morning, Ole. Larry.

Larry Hilsheimer

Justin. Hey,

Justin Bergner

segment is guidance it in better Thinking Packaging is on Packaging the increase Industrial entirely guidance? essentially performance, also about outlook or guidance fiscal year contributing solid Global the for and the in Paper the to increased for congratulations your the higher

Larry Hilsheimer

price price factored pushing together that we had we've put better we out call, remainder we the the That and in [ph], for [indiscernible] for in work through put the year first PPS. guidance in quarter PPS the on for when increases but of both, [lift] our our execution our seen planned

over both provided were where lift the equally that about we we businesses there's in guidance in the So, in earlier dispersed. and it's year,

Justin Bergner

helpful. That's Packaging, Industrial a more bit so that's I would thought Okay. have interesting. Global

headwinds cost tighter that front Packaging, are increase easily Industrial in to teams non-raw is are to material pass but supply making team, price volumes environment ability able non-raw such just of anything inflationary that headwinds? material the flattish from cost not the market the more with achievements the chain that the On Global those on take pass away your on to even

Ole Rosgaard

that Speakers] years came like by we one. raw increases. X.X to ago, And Justin, Yeah. on. weren't I'll material X.X, tracking Greif passing [Multiple old price we I a non-raw So, bit when little and material, weren't large, them take

hard we said in Larry as creating system system them creating very very, are a where worked unable earlier, to So, on. we track we pass a where

And we them are so today, of all passing on.

get. are terms ahead the just when the with pressure inflationary curve we we we the do don't pockets. of do it, And in of We

[PAMs When we so increase, all a price it's you to, have globally. have and PAMs] non- pass our Just to customers non-raw on understand, we we [ph].

increase a margins organization the we part that's not a So, impact, you of and small kind And and are DNA. that's has into that where diluting is been the we of now something [ph] our our significant have anymore. power [massaging] see

consistency profile is we have now have we So, going forward. our margin in a what

Justin Bergner

sort [Multiple your follow-up. and Okay. a greater the of chain timely external I manner all mean, supply competitors the Understood. of sort That's product helpful. making But you is challenge and given just just to getting customers, constraints the a the environment in Speakers]? helping

Ole Rosgaard

the helps. Yes, the service, our obviously – I think, customer on years, focus many past

a to service have it's you are great you come difficult have certainly when really, it's our price a – discussion for it's a with certainly the with with to we but easier acknowledged customer. customer, delivering that particular customers. And So, good increase, partnerships really when

go those So, things hand-in-hand. two

Justin Bergner

Okay, Thank you. great.

Operator

of of line Your Bank next the question George comes from from America. Staphos

is line Your open.

George Staphos

proprietary? do you your wet regard? probe picture being follow-on guess of replicate where thanks to we Ole talked going good is Day, about hit that are to front it? Greif that that to successful And And try you've tackle last wanted on the do the taking beginning this? any are legendary off, what service, these Hi, And actually customer you hey, see understand, you've certainly of they're seeing you're and earlier to signs competitors edges doing again any when is you peers this but at you've of your in some need tagline seeing that couple with are price? ability the given continue a grow Analyst that saying be your extending demonstrated questions that? Were maybe so and over going used to are bigger to you you're creating success would price pretty the a How you you maybe have and/or for greater us lead to years recognizing I job to guys. first this few saying and of on customer the about service, a you you I think

Ole Rosgaard

we terms will our the in we but June company that all, trading working Are cover of of we where certainly we We really is No. mean, and dwell into also of to Investor our it? just the competitors. and a We not that's focus. of on and be also And service business and don't in we XX. best George, there? on are hard really I focus putting we're own on Are at control. customer our vision of that, lot our have Day very on on technology First lot world a investments can what some dramatically we focus to in our

George Staphos

back on two that. the feel continuing we're we'll you're focus guys there is or you to to you couple Is thinking what growth – six about prosecute make ago? say more so Is ability and in about continue have there's organic a there all you in been and right then versus understanding would quickly to relative an potential that quarter. to you that area the of ahead at that M&A? the how have even the front? If on into weeks Okay. you doing so to press capital months slowdown, of or where and what or And any Thank difference allocation luck and not think going mix whether the does a hear good

Ole Rosgaard

your of question. into the It's are and and to we a Larry using what is Part the our for answer you. Thank bake AI, beginning really do short-term I'll over that's a the thing. part It's and part not first business. long-term of to pass thing. technology then second you

Larry and to business the to will into M&A let answer provide run years technology AI to We I'll service. be seven that the four And the customer have question. implementing projects able legendary next

Larry Hilsheimer

already early unit we plans Should be a call while, we George. leaders see actions asked business us to this of I Day, start tend an have will Yes, what we have And evidence implement? [indiscernible] to you their around think a been on indicator. for but okay, at develop to our would And who about, Investor trend? we recessionary of most you

at pause is us? with saw of we're I and a in been our what told this we but yes, real analyzed ratio half then, news recession with seeing it's that analysis we Caraustar I to any mean, debt you of trends be a that recessionary coming and got getting for recessionary we're buyer back would one, that [indiscernible], you we had So, seller say a at Would there we the sort pleased point. maybe we've accomplish we downside a to a be have even explained environment. back more when cause the any if target at for might to and it when good with know, I'd an criticized able evidence think roundly the push everybody not thought Caraustar everybody year. only us somebody – very and time that our by recessionary doing

guess played So, well. It’s out. That played what? out

comes play that the feel downside it. but like risk something going just we until in Caraustar, would transactions process transaction felt seeing in size and might that we you that market only follow sustain again, we into say that reasonable it to target do and anticipate any deploy we would period of we of a if executing don't we our we that that time. and would analyze comfortable I know and and in disciplined [indiscernible] a be discipline comfortable but in could you're the sure we the so, presented same be our come range would make never And have

[Technical I think Difficulty] that

George Staphos

Larry. Thanks, much. Very Thanks, Ole.

Operator

Your next question comes from the line of Adam Josephson Banc. from Key

open. is line Your

Adam Josephson

talk and Larry it. quarter my Ole, the tell to matter earnings I Russia, you how increase appreciate the us guidance for On follow for sales Russia And in to and taking much done your that to you thanks ups. in if would what to change many, to and contributed multinationals fact many exit just to as and country have about in prompt have then mind all? Russia already? change the could other at your

Larry Hilsheimer

And that It's our than many many an to Yes. look, of we gotten I have agreed would and I'd issue is profits. lot that on And employees say, X% of. that care of our struggle. little companies offices revenues and very out, take I sales have Adam, although raising lot has and really guidance. don't that got less a of It say impact Russia them trying they're a at out have

[ph], things mean, less. basis always I trying least clear that we war interest not monitor has the if change more shut over have it our very For it's view, that to a account and fund to down were regular their we're we on that mean would just it our to been [government to date, take judgment to at very will] into they'd and take money

course so, our care our and the take people. for here conclusion And stay of least to it’s at been

minor operations. change to any have self-supporting. not at capital explained a would before, it's our things basically It's in And we dramatically. happen part sales as putting of fairly sourcing And So, there, very there. all. We're happens

to know Ole? anything want add don't I if So, you

Ole Rosgaard

for every or We more Yes. less have Obviously, Adam, it's week. us. island, meetings an do

to [Technical protect the ultimately to very we to continue as that best very, said, believe focus people. done that's government. will assets, situation Ukrainian closely. the it's our assess by and the our an people Difficulty]. But up us everything our and is as giving opposed And benefit We also situation and Russian Larry to economic

Adam Josephson

in relative so, the ago, big half, And cash $XX The to inflation, in higher a think you compared taxes. Larry, first guidance in flow, $XXX And about second thank implies, half, year million both. issues, cash half year-over-year. inventory etcetera, the even the with XX pretty was full-year, all flow jump the down your the for it million increase decline million a cash these, the in I obviously of Right. first expecting midpoint a the on the to

big are you are why cash such half [$XXX you million] biased to So, a $XXX low-end year? in relative the of that to [ph]? And second high-end where of expecting million flow, terms last

Larry Hilsheimer

get start through. to as stable, Yes, which to flatten mean, some out. when I basically, you start when you're EBITDA, going costs flow they've and inventory of producing have cash And become you're that that eventually come cash things out, flatten to we happens that

As up you're building have gone lot. a sales going you're up and up,

are try it this to our million. in at sales So, We capital look working Adam, XXX just manage way, ways. up many

a is ours One to XX% as is of as sales, of XX% them sales. of percentage generally

it's that. taxes million So, [Technical $XX a Difficulty]. I XXX so Then cash drag we or from cash have as million

begin because material to year. $XXX is that have though last even reverse So, earnings year on cash no our we benefit substantial half flow second raw the of increase in the capital because will working That longer the build are of substantially, and the so rapidly through at increase up of million cash was a side, year last GIP cost. increasing the and rapid flow there turn into

Adam Josephson

it. Got

Okay.

expecting be a substantial roughly actually speaking so working benefit, big last year-on-year a year it that So, XXX was it million-ish what but thinking? will you're you're capital to drag,

Larry Hilsheimer

Yes.

Adam Josephson

you. Got it. Thank

Operator

no this over there Mr. And back Matt time. some the you further closing are to I for questions Leahy, comments. at turn call

Larry Hilsheimer

Matt, asked it big growth in that and chemicals there the asked. [just to go just call America on specialty in] Gabe primarily was in to fact, clarify and back was [ph] – and assuming I'll news [ph] one lift thing that circle tied market. by his and something [bulk] lift he his the prefaced was tied in in Latin Ag, Gabe

So, just to that. clarify

Matt Leahy

hope our of at earnings your you. We Day Rob, very rest much Well, Larry. to very in Thank part in Take Investor our many the Thanks, to thanks enjoyable much, week. safe June all today a thanks XX. Great. call. you took of who callers care. and Have see

Larry Hilsheimer

all. you Thank

Operator

This for concludes your you conference today's Thank call. participation.

disconnect. now You may

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