GEF - Earnings call 1 2024

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Operator

Good day, and thank you for standing by. Welcome to the Greif First Quarter 2024 Earnings Call. [Operator Instructions]

Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker, Matt Leahy. ahead. go Please

Matt Leahy

I morning, Hilsheimer, XXXX good Greif's to Fiscal Executive Relations. Greif's President Greif's Ole Thanks, and Chief President Conference everyone. Financial Call. Quarter Chief And Investor and Earnings Corporate and Leahy, joined This First by of Rosgaard, Larry and Officer; Development Welcome am Greif's is Vice Matt Officer.

because the Disclosure, we and in you Regulation Fair please We material questions with call consider prohibited nonpublic will to accordance you individual are today's X. important take from discussing on end of questions basis. Please issues ask at Slide regarding information with turn an

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

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

Ole Rosgaard

and for philosophy results, and I we purpose-driven create Thank you, to At quarter our lead serve strategy like our solutions customers. company. good covering of Matt, a and recap packaging Greif, briefly how would life's first we of essentials. are Ahead all. We morning

and the medicines XX,XXX products who partner for that are a the Our our around world beverages, critical make colleagues work. customers ingredients, materials, delivering as serve supply foods, chain the world raw

help Amazon do soles the furniture ketchup your work. juice customers or home, your boxes your oil your on the Our the deliver take. that the walls, you vitamins and on important in in packaging our and on We meds the helps customers our the shoes, very the your table, car, paint

and customers. the to stewards missions, we our support strategy service. the we how help and Our way be principles The customer we lead, our culture is including to our both powerful focus of and best positioning, products. turn do is great our a Industrial vision designed how better resin-based Packaging through a and and X that to the grow Build customers' strategic the that the future that business. Please X. solutions, a systems in believe at goods guide We've serve improve to world recyclable packaging we retain attract and We consistently talent our flywheel be as and work Slide be business create Greif colleagues competitive us Last will at is driven value on of as built Global sustainable serve to by

broader our and these trends are organic We slowly acquisition we have with our and through aligned investments, industry transforming strategy portfolio.

build The X the Lee, specialty intend in at past X to progress on in product We plastics our and Investor transactions on to group small high-margin Day communicated IPACKCHEM Reliance high-quality, expanding X verticals. XXXX, build same scale Slide the We've we year have to continue in and our made and global small areas then, in these shown that important since platform executed substantial in with are in markets. plastics businesses. focus on growing

building our scale mission. circularity further the the to manufacturing full level reconditioning on customers regionally centers IBC at and our offer solution in cycle focus Our products sustainable life both of a and

food, rebottled our business improves and acquisition economics, more is that This the markets. of margin. Container with increased Centurion mix and and Our Packaging high-margin downstream our unique, Paper significantly combination. of market a exposures our converting all beverage as growing powerful has improve growth washed, into as on stable well business, IBCs focused consumer and a our end both our In reconditioned integration our environment businesses

In footprint, potential all in to of turn businesses path business our is both to our along we our and closures sheet current Louisville long we X. to meet this through portfolio intend a predominantly to focused, Litholaminator for organically feeder paper. summary, meet And and Slide continue of serve and and tremendous investments rate our internally transforming customers. Please Dallas our better this many Our while see run goal ColePak in the grow acquisition. growth see beyond market acquisition, needs

our Now into slightly quarter. to APAC Starting how year-on-year basis. parts some first both full business bright a the most remained on through under as trends sequential for world pressure manufacturing we China quarter all the in which with and year volume the saw our in in X China is PMI improved emerge, see guidance. spots of our quarter, in consistent the normally working months the Volumes and as above east XX some versus volumes an through remained the lubricants, trends expectations that and we XX business were remained primary and quarter destocking, in low improving year-end improving PMI we lubricants, markets sequential businesses also improve end predominantly reflected the customers conical eurozone market and region. In manufacturing by end to January. expect more demand the comparison market improving of used throughout EMEA, well year. and The below heavy through those still the XXXX of which saw are are west agricultural

period This volumes has the through remain industrial PMIs our X.X over diverse makes past in material consecutive over packaging a results any paper inflections. North driven This the in for business do and at serves and XX. and largest America, that weakest both first region and U.S. planting, our those our weaker, period. we markets. consumer yield the GIP business manufacturing level and most even remained primarily the beverage the not historic of juice XX% from contraction that X-year rigids and LatAm in with in impacted quarter. market more January, low team a demand XX% the below or XXth Our at truly region industries impressive. agrochemical remain Volumes territory is volume GIP years is and and present by dynamics down month still see activity in quarter globally continued

inflects. the by excited are volume We prospects when trends

what in containerboard teams mix business with focusing boxboard the excellent our and environments. I'll and trends difficult in the cycle, we a detailed our work doing results. it Our control and commitment job navigate clearly to an serving and of Larry? volume are is PPS proud as remain our and we trending our on we walk improving, our business continued quarter point turn clear you our still controlling this through slightly. customers. now can tough Overall, to I'm resilience Larry over down a saw of financial

Lawrence Hilsheimer

and Ole, you, good everyone. Thank morning,

quarter with cash of of use our flow to X. Greif's Turning of EBITDA, million. came Slide adjusted line results a free first million in $XXX with expectations $XX

execution leaning of the and significant paper our performance. and discipline dynamic working price/cost effect slow on remain extended team's remains volume While value business combined led decrease capital. the our demand over cash focused a negative our on management execution, focus price year-over-year and solid, cost with on We in in continued to

we business covered remarks, build while managing short-term trends, Ole term. long opening in the his will As volume help to a investments continue us are we through better on that focus

plastic One fully startup technology launched a with recyclable pilot is our recently of and German-based those investments for barrier project that chemically-inert developed IonKraft, containers. unique, has a

our barrier the of representative marketplace meets our custom many IPACKCHEM, that to IonKraft partnership for end This of will and growing provide our and including packaging demands customers serve sustainability the and with levers think come. is growth Combined better a us innovation for Greif to outcome food the markets, and packaging customers in we to with agrochemicals years and and Reliance will offer suite successful beverage. full of multiple enable options Lee, and commitment

starting results segment to on turn Let's Slide X.

improved sustained low GIP remain Our the lubricant in order flat improvement. APAC on posted has manufacturing as by volume and the this continued profit business visibility quarters remains EMEA while patterns strong of with level improving in demand remain demand, EBITDA face offset lower trend tight limited execution customers pricing consistent backdrop better results Volumes on as America team under with pressure and North world margins petrochemical to of on to previous costs. regions weak. The sales throughout signs and those with a most GIP showed regions, year-over-year. few life solid given gross demand and activity some

global margin for quarter team's turn discipline cost pricing I very global GIP, seasonally-slow tough quarter. quarter first our with X. teams management Our in and of excellent drove environment. Please combined solid our to thank another our operations partnership colleagues GIP in in chain to another of a performance want and Slide in supply execution

'XX mill 'XX. Our volumes that saw converting paper PPS were offset customers demand. and in containerboard improving executed as above containerboard, trends up began the positions inventory well business quarter improving reorder in with up board by as in the box rebuild and to outlook and X% low they were early converting demand year-over-year level volumes late volume weaker Corrugated

tube end but quarter, the that Our core X% and tube the sequentially A largest industry. down through paper volumes for year-over-year. core the reminder stable remained is still and are market

volumes continue, well. elsewhere, in and So business if in tube volumes we as expect containerboard rising that they core will URB our and and lift mill

in relevance turn with using a our a use recognition, delayed rising our for market by or by will flawed margin with survey-based data to size. small nonrepresentative resulted were which QX, we but time On reflect significant price RISI in largely or the and a paper methodology and what rose RISI improve QX, the recur a we not businesses of information we by recognition containerboard increases ton OCC does is prices and squeeze what market. intelligence XXX% to anticipate side, price with nearly or not all X artificial at outlook. to as automation find of due and was index half the for our shrinking basis Slide in challenged XXX struggle cost business updated analytics boxboard track survey-based The industry largely our customers. with a quarter. in third-party we which indices a In approach market year-over-year increased price the QX in in reflect then as publication. RISI's real the such the cost driven sample see to inflation January-published of margin tools, in a This tracking with the what we our $XX squeeze of sync in both combined PPS second Nonetheless, time pricing. Please announced experienced guidance better small in price method with see costs, per ability coupled independent the point and of lack in of market

accounting increased reflective recognized price guidance CapEx for Given guidance and our free and the million improvements, raising year. modest $XXX are adjusted to compelling demand the RISI flow cash by million any full the other is which and million expectations EBITDA we of our capital low-end inflection, maintaining lack of of $XXX but working increase for $XX

continuation a our year current from the prices of QX. for XXXX RISI-published Our quarter, full with from recent close in and assumptions no our guidance our the namely index fiscal expected to contribution which consistent from February remain IPACKCHEM, demand trends, in publication fourth no expectation is improvement

based As quarter we on and low-end call. a we'll to view, factual at guidance present at to stick guidance broader share report. makes introducing reminder, time, we our us only including guidance it evidence We this with think our day range a updated during the sense next a revisit possibly available and our

that, With to for things closing. Ole turn I'll a back brief

Ole Rosgaard

our I us close to position together. proud Build The customers the to teams Last, can by we aspects down to drive our we on are demand all building will dedication, making improve ability resilience what business a we we for well control and commitment from to serve and achieve the demonstrate simply when to stating grow Larry. Thanks, returns. I'm and cycle. continue business breakout and drive the control global our will excited during of are our investments better performance of and that what

will a in make our but December business XX. Day forthcoming, your note We greater Details December at plan upcoming will an calendar, to in and detail XX. on Investor be future discuss please

as planning Bill and our Leahy of Before several a investors. now update has and Relations. of part leadership take Investor for to plans. Investor charge for in Greif Pacific we session, D'Onofrio, I and Head role. role the and professional their Bill the and is played position thank important welcome our to at data want to our is into Relations X our his past Q&A analytics Development analysis new the operations; of for developing Matt Asia growth And years, new Corporate years I oversee who key moving have will start an financial This Matt a for

once With I'd more for that, you and thank now open like we for in dialing to the will today, Q&A. lines

Operator

of which for Instructions] [Operator Ghansham Baird. One come Panjabi from moment first our question will

Ghansham Panjabi

guess, ISM, your I things first in some to how global Congrats in have maybe Good the how seemed off, volumes to Matt. the on you bit so indications on as quarter little far us cetera, are a during compared et initial plan luck give looking sense first you, a There's basis and better. future. can recent a February. to

Just you're any green wondering shoots seeing if with that. associated

Ole Rosgaard

Yes.

we throughout So -- volume been January, said, Ghansham, I as depressed. has

a sequential APAC we to much they although a more spot-by-spot a materialize some our that when spoke basis. seen been we What where green positive and really that it's haven't an I to is about on inflection. have have seen improvements it We of say signal seen speak not We is than customers, into seem would long they yet. for but bit have we volume time, shoots, a little little Europe, enough bit in but

Ghansham Panjabi

versus the $XX between is just that your end purely in And a differential, low it. million Got terms previous containerboard EBITDA the pricing? now, of then

Lawrence Hilsheimer

-- But Ghansham. done good also the that, some teams have we Predominantly jobs.

we're lowering about million rest of SG&A our is And closures in the million. of another and our other Ole actually that That's out. year, $X estimate just items, of lift $X comments. So the little million. bit a business then for mentioned some $X our turned about

you've lift, million $X about $X businesses million stuff. other $XX in across then price closures of and million got of and another $X then is cost SG&A the So currency both miscellaneous million, and

Operator

of Our Michael from question will coming next be Hoffman Stifel.

Michael Hoffman

And Matt, so companies to Matt's treat position respect too. always a luck Ole, as strategic role, congratulations. Bill, I good who

Ole Rosgaard

well. do you. He'll Thank

Michael Hoffman

dig shift Who the we X X On markets. here going customers the XX them end X can if -- that or they individually, this market it, make It's outlook? not this X. -- it's America, at bit watching North that point end little are -- in X if of momentum? or only Maybe we demand pick a you side is Q&A a is shift if their that in to X change there them. to It's of or of

Ole Rosgaard

I the the would And And one significantly segment is chemicals. really has lube, bulk is the really petrol both biggest down. chemical specialty the And end lube and in customers Those focus then segments, Yes. would ones. the X on then that chemicals. be commodity are the or -- the chemical third been one next and oils. big

Michael Hoffman

the have corrected market end their oversupply, finished destocking. goods, lube the the to market all So seems

green early there is So shoots there?

Ole Rosgaard

pockets not we're it's but sporadic permanent. but an we've still to that it's enough depending see on said, early still to As at. seen say progress, I little segment say end inflection sort of of that's a We sporadic But I it's bit signal looking would very destocking, again, point. what too it's

Michael Hoffman

paper? into side, America outlook? new on making and coming then that of America. a And Latin virgin capacity, bunch the is North capacity whole your Okay. paper into online that factored in How How factored is there's

Lawrence Hilsheimer

Yes.

is in first new years, of this service that we've end the coming we by capacity, this and think Armageddon over said, We combat have work industry terms some about way continued year the to and of loss customers. has through that yet since demand Mike And that here, weak. the demand But containerboard talked understand that on it the of through next to managed them excellent being been in one, often like providing focusing in business. is see And week serving the retaining helps customers its the quarter. I up every I've turn we see just did the

recognize in adjusted recognized that survey-based are facts. in that seeing it's world said, else Everybody factors what on again, big recognized. when moved didn't price. industry was yet what we price stuns analytics pushback to and no in data was I'll process repeat still guidance So to It by said. the RISI I like January. on has and up and everybody Because street the knew were this with for dealing out get the we our some price -- justified me the cost-driven it we the on I But price

factor business our that's biggest the now. containerboard So right in

Michael Hoffman

M&A Okay. in of of that fill white you're the watching when to next the sort that you model, to what's incremental space key -- then the would think today? the place where And you sort about like in

Ole Rosgaard

said, paper, is products Well, with focus -- find and M&A our that in margins we high you in paper converting with -- you as margins. markets. And resin-based on high we've products. on niche

Operator

[Operator question of Instructions] next Hajde Wells And our will from come Fargo. Gabe

Gabe Hajde

Matt, about congrats. acquisitions. recent On X, of the you Slide briefly mentioned it some

mask there. I'm as of if look, in guys have a all here depressed if just and now any pick us can curious deal acquisitions couple capital that those underlying it that in pushback would we do in terms up period sometimes if or underpinning the acquisitions. you give underlying learnings, maybe a to can demand, kind hey, contend, deals sometimes, weakness companies these business integrated and that. one; hitting in deploy of you And something relates the that is to economics or you could M&A key were like two, guys some of of We are you deals specifics the number hear number

Lawrence Hilsheimer

would we're I so extremely far, say, pleased. Gabe, Yes.

hasn't that and that tiny. The were and end well are down extremely a knew delivering economic as expecting. that are transaction, we broader on It's They're that but will thing. But in well, thing. we is going Reliance people, integration IPACKCHEM it very going is, with activities that being path, our All yet, from us that up mean strong. of ground last successful, as acquisition soon it our big the to more demand it's and to we the the dealing these, XX has even perspective. with -- lead adapting a factor integration challenges been ColePak almost though cultural focus is Greif a couldn't expect closes, gone they one And closed too. cultural well. pleased The same our our of years. has kind I be safety of part the running. are but of were particularly they I has hit fit. of The line a with then the again, just gone kind They're well. plant seems extremely we it's the for the in. extremely I small incredible in I that mean entire mean was like results sort mean -- culture what industry it's fit, And for ColePak. pretty

So anything. And plan of delivered. than in all along obviously these we They're masking we're business. these, -- the legacy better actually strategic our that and aren't seeing volumes

So we're really pleased.

Ole Rosgaard

I made gave community. this it to have we are the on X to is we we we The strategy to years about investment seen comment masking. you executing announced strategy community X the the years investment what ago, just ago. And presented redeveloped the that have we

So it's very very, intentional but... very,

Gabe Hajde

Appreciate that, Ole.

serves, Another with that Louisville I -- one on are If internally. guys the organic was was this at guess, what underway. you commercializing Are update on, think Or where just and memory running up point? us the you're you it's and the sheet at Litholaminator of I and investment doing feeder gone guys in sort sheet feeder?

Ole Rosgaard

this feeder, we sorted be of will of the on customer by operational sheet sort file X. of The June of year, thing. phases end serve will And permits permits a and in out, the final we're and first we May getting that

Lawrence Hilsheimer

very, and very well. it's And Yes. is actually, No going laminator operating. up

Operator

back turn the closing conference for remarks. I like Leahy to to now Matt would

Matt Leahy

you joining. Have all great day. Thank a again for

Operator

participating. you Thank call. for conference today's concludes This

now disconnect. Goodbye. may You

Greif (GEF) 29 Feb 242024 Q1 Earnings call transcript