GEF - Earnings call transcript Q3 2022

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Operator

Good morning, and welcome to Greif's Third Quarter 2022 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, we will conduct a question-and-answer session. [Operator Instructions] I would now like to turn the conference over to Matt Leahy, Vice President of Corporate Development and Investor Relations. Please go ahead.

Matt Leahy

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

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

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

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

Ole Rosgaard

morning, and Matt, everyone. Thanks, good

executed Build of our $X.XX, adjusted most to the of value We adjusted the exemplary Following quarter Build and million results strategy Investor uncertainty, million. both the flow are time record June and delivered our very Greif results. supply perhaps against quarter to EBITDA we adjusted by growth economic third when historically but strong powerful pressures team. quarter ongoing chain strategy, $XXX.X indicative comp EPS global formal delivered the XXXX and on EBITDA we $XXX during record are cash third creation pandemic. delivered at to Day, introduction pleased of impressively, Last earnings effectively Last We QX of present free single a of our our These of the inflation, continued and

capital leverage to allocation our Our opening quarter deploy company value and grow our priorities ratio drive to accelerate capital by achieved target a ending opportunities also below and our has business. significant range, milestone the shareholder up

results to had fiscal as delivered begin Slide confidence team's Our Global turn the results. Packaging to third expected an Greif Larry detailed in us guidance, later. quarter. excellent led produce continued our will Please Industrial discuss X, to raise strong of discussion our ability to XXXX

across We see down up portfolio global drum resin-based continue to a per solid strong low-single mid-single demand by plastic Global volume prior our comp. day and drums year with versus XX% IBC's fell digits on and chain digits patterns. around by per APAC late inventory year disruptions driven day challenges versus EMEA which and the customer labor impacted rebalancing, supply in availability, material prior and order weakness quarter steel raw

North American strong end end markets. across outperform business Our with and to volumes stable markets remain chem, citrus and continues ag LATAM the lubricant our which

exposures Adjusted a and geographic market year-over-year Day. from effect our decreased As of mixed end a discussed reminder, Investor approximately product by EBITDA at business portfolio GIP benefits as million. $XX

proud the ability team's XXXX. are viewed to multiple performance largely our offset when of quarter third historically We high of headwinds against

the discussed previously that benefits year's XXXX steel of the Most in team In previous a $XX has year-on-year incentive to FPS also as of year million $XXX the offset occurred run impact addition the historic million one-time related up the to from to excellent tailwind well as steps contribution the accruals, last that absence prices. taking during higher at year. half been full-year a of last second benefited

also but were costs teams continued along in material non-raw passing inflationary of the headwinds inflation, of the diligent Our faced ahead curve.

all due solid notably Slide Please to selling team materials, and versus and million turn prices, in during steady selling these volumes inflation. $XX global has transportation, EBITDA to to the continued challenging paperboard prices. exemplified higher rose year times. third and higher prior higher Our execution and prior of quarter sales packaging's million by substantial partially Paper million labor due relentless by X. higher the grades discipline raw the headwinds incentives average to headwind GIP higher $XXX and energy OCC costs, $XX and rose at year offset related versus Adjusted by

feeder in volumes the QX compared but were down industry with quarter in to our system Third CorrChoice X.X% day box pre-pandemic sheet above XXXX strong per demand, XX% remain line historically levels.

our year and softness to growing textile adhesive being offset X.X% end business. end versus were strength markets other and as Third down [cube day quarter as volumes markets well in with due film core] per mainly the in partially our key prior

towards Most The downtime year. event. to As some Thanks time us that led Mill the job only lines excellent fire should focused in colleagues next may defer in we of incident efforts at of unharmed to July. the those all bringing an The one we happy that know, XX into had our of our of and days days at the timeline. of production short report two on dedicated determine our lines a are plans The line downtime the are our resulted colleagues. a did importantly, of one Riverville from at our team end back safe to in of fire mill. XX we operation maintenance the to

equal net turn quarter the As our will quarter is that the in X. that a approximately seven fire I of Page fourth fourth on Hilsheimer, tons days CFO, Larry it now result will during a shift, to of into of guidance. into X,XXX result factored over loss production our

Larry Hilsheimer

Good everyone. you, morning Thank to Ole.

quarter, headwinds. adjusted in our million, combined quarter of prior ongoing $XXX we team's cost year. well of third labor to raw of million a substantial ability ahead $XX Our perform despite demonstrate non-volume-related EBITDA headwinds transportation, results delivered energy material, Despite the and

no business, difficult growth GIP EBITDA portfolio stability is quarter exhibiting where by and headwinds these which is long-term a act was during to provided our and create over quarter that note the exception. of strength our faced effect will Greif, several prior paper driven The with comparison. You was year packaging this businesses earnings by for a

displays past seven Day, the over this the a today's years. have included of presentation We in from dynamic appendix slide Investor which

million cash quarter, This this also business of flow Day, earnings from XX% and share cash messages with business grew Investor highly generative system the record of of generation a the resilience as impressively, adjusted by over per core over earnings proof machine another provides the of we quarter. during free Greif our produced of of $XXX cycles. $X.XX, most During regardless cash

States. efforts was share or are $X.XX line favorable was primarily our teams also income to Our a $X.XX result to Tax X. earnings expense earnings executing United turn in of Slide to in as a below where due impact expense higher interest of the year-over-year $X a deleveraging year-over-year refinancings. a negative benefit Please a the

through again a continuing inflationary extraordinary of deliver fiscal to as guidance our and increasing our are XXXX customers to We team's managing well live result our environment. efforts an for in

We midpoint per out confidence year. reflective performance third to of our earnings of ability, XXXX, to the strong team's by our are guidance $X.XX to and in share fiscal raising for $X quarter share ability round our the adjusted our results a deliver

raising flow We to range $XXX guidance fiscal a free are for new with XXXX of million. cash also our $XXX million

support operating upside. into slightly is working management benefits Continued line, net and anticipate with the We capital flow net continue improving XXXX. working coupled capital strong these lower to driving to CapEx outperformance on cash free the

and Slide B in modeling $X.XX we provide made turn our appendix with our increasing X.X% X. slide Investor of back Day on promise to for to a to as the quarterly shares. to needed. deck today's the dividend $X.XX on are Reflecting use continue shares assumptions key A value find we you'll to Finally, Please by shareholders, to and

to repurchase we continue In raising addition Day. Investor shares dividend, our to announced at as

return shareholder of to target. and a affords our our increasing reached the balance strength Furthermore, Our the delevering have commitment coming new milestone sheet ratio leverage dividend in sheet to repurchases us compelling another balance opportunity. to in below opportunistically share deploy yet opportunities capital our to The flexibility pursue we offer target year.

further are we With and our Ole about business. robust things excited turn grow to remains X. pipeline acquisition on to the I'll back Slide that, opportunities Our

Ole Rosgaard

performance Larry. of our extremely quarter. we the our past are proud Thanks, sum To in up team's thoughts,

Build the is Day, that summary our Last missions on As in Investor for discussed we any to presentation disciplined at in key appendix economic performance deliver from ensures Day. a and strategy will our Included of Investor the four of exemplary messages focus execution today's environments. our our

in our creation, quarter confident strategy open to Greif. in Thank action. Last for drive the this long-term in a please Operator, to ability are and value strategy Build you of interest questions. line that We your the example for is you for can prime

Operator

Instructions] Thank [Operator you.

question go from Ghansham Baird. ahead. comes Our first from Panjabi Please

is line open. Your

Unidentified Analyst

for Ghansham. in Digenan] [Tom actually is This Hi.

in first the for momentum pull now? could fundamentals see back recently. We've seen characterize right somewhat them you PPS as Our question, containerboard industry you

earlier demand should I'm now and going how year? we So forward this about wondering relative to think

Ole Rosgaard

that our backlogs around is eight of weakening and end We weeks. in but slight solid demand, I to stress quarter the are saw a will the our still still seven towards demand

Unidentified Analyst

and Got you relates as it. gas helpful then region to also also could you have would That's also, as it what each then And European base helpful. around you're how yesterday? well? any in nat the seeing And since would say involved the across commentary customer characterize shortages be dynamics macro

Ole Rosgaard

Sure. can effect out regions, basically what start we prevents China. that across Those out is Chinese APAC, around and there we some I see in damp world. walk could of puts lockdowns continued the just the demand. – on transportation the in lockdowns we the If

demand means for cost that being there's markets which silicon, on all the like in chain end packaging gets region. whole also less has effect less affected. demand our see We an and construction paint, supply increased auto, also the transported for That like

why that So we really see region. in that's weakening

is North order picture the terms that some consumer extent on we cost which overall, It's In effect EMEA, but take One a companies energy into materials EMEA, goods remained all see well. production by see strong see conflict and we do really terms for where gas in down restrictions do the we we For the ag the are America, inflation reasons. in that of of the demand of to an several in lesser weak. moment. Europe, demand capacity see chem, strong We chemicals. at see some packaging has see we weakness and but types some has strong, prices, is auto, as paint LATAM for the in in and Ukraine. and same demand not pockets weakening to is of causes in in basically extent, APAC to also food-related goes That things. caused strong

Unidentified Analyst

That's really helpful. Thank you.

Ole Rosgaard

welcome. You're

Operator

comes from America. Our Please from go Staphos George Bank of ahead. next question

is line Your open.

Unidentified Analyst

[indiscernible] This is actually on for today. Yes. George Hi.

be guess So you heading biggest well? able into both your for be then segments risk just color as might to what would I margins any initial provide XXXX, that and on

Ole Rosgaard

– Fed the is mean, even XXXX the struggling economic path particularly is that. obviously way just I uncertainty of the yet with off, long given a here.

to prepared the So out our about building plans call. hard I that quarter at mean, well on now, we're and be talk working budget we'll fourth

Operator

Our ahead. next from from Capital comes Josephson Please KeyBanc Markets. Adam question go

Your line is open.

Adam Josephson

the Ole, just Larry, Thanks would in month you're by down Larry, my well words, mind Hope August, updated volume XQ well full-year X.X fiscal your for for what Matt, very is through relatedly, going XQ, good each embedded August much trends in what guidance? well. volume as and other compared your tell us the morning. you can in was to your as expectation was in as quarter taking questions. months you the as of what three in

Larry Hilsheimer

we May Yes. weren't July We bit published. Things leading weakness. really results – showing and had where to the of Day talked Investor a they signs so in June we off were, tailed any like at

the steel IBCs As sort And number we we're August. kind yes, sheet as in in August, steel. we trend mentioned. remain that looking it paper even it's up And our continues July. down in – of on through that digits look business of seeing where strong positive went remain we at Ole mid-single saw

still close to backlogs in weeks paper our Our are business. eight

weaker, is lot signals, that Adam, overall, concerning moment. the overly little but are a at So a mixed things of nothing but

Adam Josephson

as that. terms in related OCC your XQ, in paper business, down strong your September ton. Ole, the the they if guidance Can in And OCC are the backlogs expecting would down appreciate fiscal are? took a OCC still to and I decline obviously by falling me in comment business, were your $XX prices be backlogs of you do by seven you tell you're like much what just you your relatedly, in as suppose why to paper obviously eight-week about volumes your

Ole Rosgaard

reflected Yes. We we XXX built then September going August, in – for October. to down in and XXX it's

businesses. downtime down do are continue within a You I people specialty but to our taking maintenance some seeing there do that different we And is of in well against lot weakness demand there bit the out industry. that's the a industry, paper think driving

businesses I strong CRB still construction but housing starts up you've and are up got are July see URB pieces have while you down, some permits are that continue Actually mean, to not. Our XXXX. year-over-year. completions weakness, may residential be year-over-year There a strong. others housing showing in went over you

for cores XX% are our August-over-August. seeing, you URB look carpet actually roofing cores down we're business, and if X% and So example, and in floor, up

You X%. more which got construction goes now construction commercial down into tubes, is

So And us. good balance for like the it's portfolio. just still mixed across said, pretty a bag on I

Larry Hilsheimer

then And Adam, built follow stop to remember contract sign a when the house months that XX you from will have you into and nine, you to you that now housing, build that. be and when a future, house, can't

products demand continue for see will into you housing-related So well XXXX.

Adam Josephson

Thank you, Ole.

Operator

BMO. go from ahead. next comes Mark Our from Please question Wilde

line open. Your is

Mark Wilde

Thanks. Ole. Good Larry. Good morning, morning,

Ole Rosgaard

Mark. Hey,

Larry Hilsheimer

morning, Good Mark.

Mark Wilde

about ability first boxboard onto how I've like it of out ago. kind a or three your we've of $XXX us And years little a to was point, terribly Ole, right gains? OCC think you at a price but can hold price this in now, seems really talk with the two XX you $XXX lost recycled got about not there worth bit these much just about track higher to little $XXX it hikes than months. if that's is last over

spread up So about it quite spread about retain curious your bit to you've I'm picked and just that? seems like that there. And think ability you how of a

Ole Rosgaard

a The way I is simple. really think issue. way about and Mark, that’s put I demand it it, very it's I mean, supply

Mark Wilde

targets also and period time? number might Xx you low-end bit your for of – willing Okay. operate be extended that to whether little below And around the you you leverage a talk can below some can

Larry Hilsheimer

deploy Yes. things chase we're don't capital capital to Mark, we efficient, not be terribly don't find sense. and that but that the crazy going make to

my see as for So to could But to I remarks, acquire is fall very we some. pipeline the there in our that is extent is prepared acquisition that attractive, us nothing that mentioned robust.

of deploying down But on for being a number do to execute We we things. while We'll we in we'll And yes, are remain could I disciplined that powder don't those, us of looking at if things. that a have capital. any then that below of time. our so dry long don't. linger more it, anticipate to for shareholders a to to we – more falling look returning at not the and so – rash continue but about going be capital us to But extent we're wouldn't that dramatically that I period see

Mark Wilde

Okay. for just out clearly give on from the you financing a sense really of Larry, private you're a can And M&A just finally, what us front, market equity buyers. there seeing the it's sellers because tough

back it's In of awful curious this the now. fact, if just to just pull it at seems point. I'm frozen right seeing lot you're me from sellers market an kind of

Larry Hilsheimer

in the an don't But they're we I advantage financing, that us We're and not. that not as they're able for to opportunity to Mark, target difficulty of extent opportunities. be do seeing this that of we're obviously size more extent Caraustar have to talking rapidly, We're actually but lots any for any the not us, make our able deals, we'll objectives. opportunities, stretch. to by having huge look trouble mean, that the sense transactions take at the that drypowder and market financing, this very in find we fit we're we have

Mark Wilde

in the Thanks, Okay. back drop queue. I'll Larry.

Operator

Hoffman Our ahead. from go Michael Please next from question Stifel. comes

open. Your is line

Michael Hoffman

questions. the taking for you Thank Hi.

OCC think comparative to share like of trend, thoughts how with you've and I'd steel year-over-year? book fiber, So your mix commodity but tackle about XQ trends alluded us about the you into your and that going to overall we resins, the could

Ole Rosgaard

prices? you thinking This like Are raw Michael. Hi, material of is Ole.

Michael Hoffman

Yes.

Ole Rosgaard

seen dramatic materials raw steady, over a So in periods. decline but the we obviously not have

of now front towards continued slight sort dramatic expect from a all. see year, and materials of the to raw that towards of decline end we expect at don't the We anything on

Michael Hoffman

Okay.

Ole Rosgaard

And to resin. that goes both steel and

Michael Hoffman

issue why? a to find deploy good Larry, – that intention know. is rolled CapEx to is you on year, into Okay. supply That's just on want to the you this to it, side, things you next chain understand the – the are buy, then but that trying And that's gets can't and the

Larry Hilsheimer

then that issue. our then for but weeks sort this year, pronounced an And unique ago, chain come as it, CapEx of to became in. shape still last be but told we year a on situation of difficulties more it's became Yes. going continuing not in bit like years, story a the because got Three then Michael. equipment, thought the to piece We having were a unfortunately. large three until that been lower some that's we spend That's three years for equipment frustrating was us a wasn't last going ago supply to good on it

yes, capability. It's not anything related. chain or it's supply desire all related So to

year so Texas sheet have feeder will it And and about a plans we go next it as into year. we've do having new next announced

major So for the spend, give into that'll capital fall that's a guidance we'll next year.

Michael Hoffman

the tweak everybody's directionally. numbers I just on to to Okay. having the definition think a trend flat if conversation, guidance, so the can about, slightly modeling just given year-over-year down then, which And raws little trend, that's we're intelligently, guess, you're giving out should but the but not nobody tighter, I given way a surprised be or by

Larry Hilsheimer

Yes.

for about think occurs, I is, goes up. that the cash as generation the those I because collection one things on play The way that and just would working think mean, I that's receivables capital talk the it. need out. declines, thing to

scenarios will cash if and we printing a don't decent expect, target repurchases talking We EBITDA down drop, getting are and some we out next our over in mean, you declines acquisitions. do the modeled XX% years. even our dividend size ratio leverage below So we just out remain still bunch tough are as stock modeled a range, couple which when we the I and in of really anticipate. we the would increase, doing even

yes, flow fall So see earnings if off may cash economy the strong. but is going south, we in that be to goes

Michael Hoffman

very it. Got Thank you much.

Operator

from comes question ahead. Wells Gabe go Fargo. from Hajde Please next Our

Your line is open.

Gabrial Hajde

Ole, is Larry any and as we quick, move could capacity product where the profitability to the have extent about, in your their you that and regional morning. And it of customers example, and you we good can that if someone know to framework to, have give they they're winter might to us happen the again, trying over manufacturing choose that could energy potential Y, make I sort volatility what for Matt, Real think and any X, in guess, that to extent have? you capability, of limitations States, months, of terms that perhaps I mindful specifically, in the United make anything Germany, the Z again, don't product they should profitability. be impact but

Larry Hilsheimer

Yes.

oftentimes China, for States all we've a don't much things see I move obviously think that movement, they in really of Saudi shutdowns think – we to have but see would difficult I May, we lot you'll the seen wouldn't with that's Gabe, move that past. United the like but the generally might in it very our – down plants to think there. good, you'll We – us now, the things that and they like that extent I extent seen haven't That'd move move good just to answer. But that China right be we the is a there. I of see, Arabia before to in see

that. I the I just I think know other thoughts kind on more don't that be would you if the mentioned. have migration

Ole Rosgaard

we just and more obviously you supply with and also our consume no about remember, XX% It's U.S. energy Europe, here. we so mills, issues our then see in talk have in sales, energy the if our And No. that's of that. they

Gabrial Hajde

maybe to so ton five? fixed under fair? less maybe is – million fourth guess I a then no just that that dial $XXX if maybe of one All which I overhead, quarter, fire $X was Is And that one X,XXX right. mean, one a to this issue, you. quick assume of fortunate what absorbed headwind injured. was tons or I than Thank in, downtime,

Larry Hilsheimer

Gabe, when because obviously didn't we've business That's so the that that, anyway, we Yes. kind for against built and quarter working anything going know fourth already recovery we not to our substantial. We're of roughly, don't into might interruption the it's be obviously guidance. got but it's deductibles build occur. of timeline any high into that on stuff

So I didn't for put that. anything in

Gabrial Hajde

Okay. Thank you.

Operator

from go comes question next Gabelli Justin Please ahead. from Funds. Bergner Our

Your open. line is

Justin Bergner

Good morning, Larry. Ole. Good morning,

Ole Rosgaard

Hey, Justin.

Larry Hilsheimer

Justin. morning, Good

Justin Bergner

OCC calls, that if the might quarter the to you've was guide, next. for past breaking down CapEx? guidance other and into for you to And below wondering On sort cash operating – one if thing could factors the bridged and of do lower the in be I do it able change between line free maybe maybe similar capital flow, you from the benefit from the earnings

Larry Hilsheimer

it. do to Happy

separately. our was so which our price midpoint guidance and other than I'll operations So for XXX on yes, QX, break that business paper OCC, out

XXX we pickup. both mostly it businesses PPS is by had out us was mix Interest a we $X.XX, operations what because XXX, about in mix had executed, variable The built of in had increases of at and our bad OCC $X.XX already pickup versus in $X.XX across we of part guy. on came a but expense some expense pricing to $X.XX. built we had price is the the dropped GIP interest ton relative we what before, on knew So left driven about that was announced

thing expenses five, and just $X.XX was of on kind loss, six $X.XX negative. other currency that other the unrealized Some tax was two all, that and so and

So get see get I'll and that did that? to you from [indiscernible] all if $X. pause X.XX you all –

Justin Bergner

across that $X.XX. more GIP operations just color mainly volume… just the little businesses bit better Yes. That's better execution, positive The provide you great. Was Could a that's there?

Larry Hilsheimer

of in steel Yes. to us. some price and bit some the for prices we non-raw Really of little benefit selling played increases, well timing that relative on material the of decline got on a disciplined execution

and our integrated – core there, where for the those things. some it in combination have times And out we So more CorrChoice tube plays in PPS, business. operation of our our minor so us just amounts then products specialty and better in

$X.XX those things all combination So to lift. amounted that of

Justin Bergner

great. Okay,

Larry Hilsheimer

same walk. the do I'll side, flow Cash

expected those be started was X.X guidance we million the interest Adjusted same up negative discussed. then spent X.X. going So as X.X. things, miscellaneous And down to taxes, because other stuff less $X.X and expense we expected are X.X to OCC, to the spend less was than I operations, going it's other that or cash on – elements a obviously, on the just XX.X than same we operation, pricing, XXX we is but on it, CapEx we

Justin Bergner

Thank that for detail. you Great. all

had Second was repurchases. question I on

significant So $XX which the in more – mark the sort I relative will that you price speak should M&A up the you that's dollars repurchased million assume you to quarter. I amount something continue your XX-Q subsequent mean, capitalization. was of repurchase. Should that at unless I think a do activity that of or to will mean as we of not it think of quarters to in one-time? picks we the

Larry Hilsheimer

had Day Investor we million ASR We at on we – the No. announced program. did $XX executed that

So share. into back delivered of if entries get one breaks it statement, two $XX you that in related look at of and stuff you it million it. million our you I'll pieces per to on that a minute. impacts and come cash XX% that And $XX see flow earnings to day And a impact and the actually

to And more We'll has we that stock back. program gets how us in plays year. in ASR because On goes share You know do market. million impact, out don't will way And earnings on per which it execute our a another ultimately then $XX hopefully this million share $XX next plan open to earnings for quarter lift $X.XX also be probably share play will another the and think $X.XX until million Coming rest over year. in less plays impact it first which we $XX happen the out gets share paid is. two-thirds whole about out, this year of B Hopefully, that'll A $X.XX the be the for the way money to about the year. it shares, really filled QX, per per on shares, up market, the of whole in the out it open it price if price back one-third and it buy $X.XX other that the so market. costs but

Justin Bergner

Great. Has the that And just the million is in lastly, headwind bit larger price of it number? smaller? $XXX sort That's cost versus still the well. or become then XXXX, helpful very a benefit little right as from

Larry Hilsheimer

I going And there $XXX increasing prices fixed no. wasn't decreases the gone mean just playback fixed. No, to That got the million and rapidly number year through that normal that yes, number. last repeat didn't. just but year a that stuff, more now this through lost volume what we we've as was year, and was we've in is out than

Justin Bergner

Okay, great. Thank you.

Operator

Our next Please from comes ahead. KeyBanc question Adam from go Josephson Capital Markets.

Your line is open.

Adam Josephson

X% had we fairly that similarly was was more was much. July then X% the one Larry, just if to down August is, assume not July July. on I follow-up XQ, if Should trending the very Thanks down volume which were think August? question you in earlier, I was worst. as And you said,

Larry Hilsheimer

me here. Now let look at… looking Adam, I'm

Adam Josephson

Thanks, I could one. another ask Larry. Yes.

Larry Hilsheimer

Matt? I don't do even – remember was Actually, don't down. July that I what you know

Matt Leahy

have that don't now. I here front in me

Larry Hilsheimer

because upper, single, I mid August hesitate on down to b but China But mean, just I globally, versus steel I there. much look that it's it digits, single upper and so driven is on if mean, what's July slowed I it's… at of

Ole Rosgaard

What we just comes our that obviously we replenish so remember, is where point customers inventories. the down, and also our inventories to are – Adam to have need your to but pushing you

So but I whether know, an that. there's of it's don't element XX%,

that – purchase that to starting demand end starting to of come their the once see increase you So again. to customers they or again cycle, will

Adam Josephson

down fiscal know But just in that? words, assume I more XQ, in I'm what No, trying is don't Right. obviously embedded to other it's figure I expectation out reasonable a volume is your guidance? than what X%. for

Larry Hilsheimer

I yes. digits, yes. mid-single Well, said

Ole Rosgaard

It's It's plastics. about on steel and that.

right So that's about it now.

Adam Josephson

about but prices supply to sustainability asked was the all company, containerboard prices And to two total the of I and demand. yes. given Mark URB historic your those with what's OCC happening Okay. response between regarding, these it's talking and the okay, then and spread

in and falling cores tubes are containerboard. volumes in So and

that containerboard. there that, sustainable? think – is reasonable these reason and So to trends and these on it demand that in of the based tubes in seeing any cores light mean, prices are Is to think you're I that

Larry Hilsheimer

best can future to we're your up dramatically I to but the the supply we price to going not I because going obviously that, you don't yes. mean, very to prices, valuable to it's follow us, it's give make extent comfortable mean, operate obviously going to business Adam. comment on that is well, demand. to assumptions. our market, drops our We're I mean, very demand try in continue

that unreasonable drop, projecting to expectation think it's not that point So I prices down. if some come would going demand's at you're an

Adam Josephson

Yes.

Just and and is, lines been containerboard that URB lot along economically is a other non-durables. thing year last versus has next going over expectation into What or goes reasonable sensitive URB food containerboard more than historically we if containerboard, URB into I containerboard meaningful beverage of a the one think versus for appreciate so? those you and because a demand, is do are pretty recession

Larry Hilsheimer

at I extremely if diversified. chart that don't back assume lot that a is stuff mean But look think and I I over that differences our market, diverse. to so fair markets different worse. mean, I it pie provided think go there mean, don't I of extremely time, is you URB, the goes correlate closely. than they're in I it And the it's end containerboard. end is the mean you we've that it's into they

Ole Rosgaard

And Adam…

Adam Josephson

sorry. Yes. Ole, Go ahead

Ole Rosgaard

two Yes. There's points.

balanced portfolio. that explained during Day, As Investor we we also

we lesser portfolio. of comment demand. our have in the on extent So that's And overall containerboard

price demand. no indicates So at stable, there demand also moment. be there's no have which least CRB is strong – the you that And at pressure, URB will

Adam Josephson

in Whereas containerboard demand… Ole,

Ole Rosgaard

containerboard. on I didn't comment

Larry Hilsheimer

mean backlogs our same. the I – remain

Adam Josephson

you. Thank it. Got

Operator

ahead. Montreal. from Please of from next Our Bank Mark go question Wilde comes

open. is line Your

Larry Hilsheimer

Now right we get the country.

Mark Wilde

am What just the opportunities? reinvestment you're over it more internal to us any Larry. about you where going look Is next projects it words, mill or thinking two capital focused that years. your listening, of chart on? pie you're invest some Is be like? best Can that the going color sheet plants? businesses kind projects give I on outs? in Other – What's if existing IBC it on Is upgrades? would three to build

Larry Hilsheimer

spend a feeder space. do in you a We're are But for at the think us the focuses. least to my primary continue appreciate in the our over containerboard and Small for weren't spending expanding spend Did we places around have attractive us of we're the things. those just our of in isolated Investor significant labor business It's where if this more from plastics, components get Mark, Texas, span year. opinion. kind focus next a from mean, Day, us, sheet IBC we're good you'll very to that We'll world we see I I anything? us. which to Jerrycans and where space. going automation in and recognizing miss Those and back primary upgrading is very going course – in Yes. reason, more on facilities, business go of at integrated

Mark Wilde

machines lot that Okay. And I'm recapitalize of old you just or mean, XX old. at curious, are I cylinder probably the sort across if there you there think business? look potentially industry, years are a any that the are of XX opportunities URB in

I'm about just that the potential capacity. some recap And to of perhaps so curious

Larry Hilsheimer

Mark, has for investment us. team eighth any and to a modify make from XX like the would something you sense out one our yet say basis and changes assumption that wholesale type that not it returns looked and that It's convince play to we to that Yes. I curves answer. of XX-year you of on been me People at. able and a percent the

needed will make makes extent whether to hasn't. you the explore spend operate continue we well. And something that mentioned to continue to so to we'll nature the so far examine of And it money I it plants will the sense, but sure mean, and we to continue

Mark Wilde

Okay.

in quarter luck the Good Thanks. guys. fourth good. Sounds

Larry Hilsheimer

Mark. Thanks,

Operator

ahead. from question Stifel. from Please go Hoffman Michael comes next Our

Your open. line is

Michael Hoffman

that for with as you customer competitor your ultimately follow-up. overstuffed. and A the and questions lot be to you sort your of what your – what's think supply channels channels will in and as channels major inventory, of we're if the your How regards looks Thank if the of own look like economy shock do channel there's what like then far demand.

Larry Hilsheimer

some world, Michael, have places mean, where had excess supply to I inventory in chain. Yes. we about concerns we the related some

to capital of this working cash one big focus will We obviously and improvement have continue dramatic the so versus flow in was quarter and of down that we'll drivers it working that year-over-year in do that a been continue.

in in portion while same think our space. And that what that's pay them many basically you relative you're customers who rent us actually, of a have. it, of don't we our terms some actually inventories much them empty storing that they empty small we of store I'd customers have But to thing them. keep product about of customers, drums, in them, keep of inventory have we In say the competitors When plastic actually our who because air. they steel some drums, semi-trailers for and do

the don't the containerboard plants You use waiting goes It's it. real-time. don't a of mean more store to side, the much. same store And paper box that lot on just I

Michael Hoffman

channels aren't stuffed. So over the

your So is this cycle? really about what to comes perception economic down plainly

Larry Hilsheimer

customers have coming mentioned we some I Yes. back expect some inventory. would the patterns that by the economy. offset Ole drop pick destocking supply in group impact that some up, in But the mentioned that's I of of think we order to that further mean, did of our so any we to end limited store and do

Ole Rosgaard

are Michael, they're so inventories those stock huge. Yes, not to safe

come end So an to they'll shortly. then

Michael Hoffman

helpful. very That's

Operator

Leahy like the questions. further I turn closing no remarks. to have call back Matt We would over for to

Matt Leahy

joining Great. care. for week. Have Hope Take you today. you found call and Thanks thank helpful. safe enjoyable the everyone And a again.

Operator

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

disconnect. now may You

Greif (GEF) 1 Sep 222022 Q3 Earnings call transcript