Q2 2024 Greif Inc Earnings Call

June 6, 2024

Question and answer session.

Speaker Change: Ask a question during this session you will need to press star one one of your telephone you will then hear an automated message advising your hand is raised.

Speaker Change: To withdraw your question. Please press star one again please.

Speaker Change: Please be advised that today's conference is being recorded.

Bill Nefrio: I would now like to hand, the conference over to your speaker today build enough Rio Vice President of Investor Relations and corporate development. Please go ahead.

Bill Nefrio: Thank you and good day.

Speaker Change: Welcome to <unk> fiscal second quarter 2024 earnings conference call. During the call today are Chief Executive Officer, <unk>, <unk>, who will provide you with an update on our second quarter results driven by our build to last strategy as well as current business trends, our Chief Financial Officer, Larry Hill Shimer will.

Speaker Change: An overview of our financial results and our fiscal full year guidance.

Okay.

Speaker Change: In accordance with regulation fair disclosure. Please ask questions regarding topics you consider important because we are prohibited from discussing material nonpublic information with you on an individual basis. Please turn to slide two.

Good day, and thank you for standing by.

Speaker Change: Welcome to the Great second quarter of 2024 earnings Conference call.

Speaker Change: At this time all participants are in a listen only mode.

Speaker Change: The speaker's presentation, there will be a question and answer session.

Speaker Change: During today's call, we will make forward looking statements involving plans expectations and beliefs related to future events actual results could differ materially from those discussed. Additionally, we will be referencing certain non-GAAP financial measures and reconciliation to the most directly comparable GAAP metrics that can be five.

I'll ask a question during the session you will need to press star one one on your telephone you will then hear an automated message advising your hand is raised.

Speaker Change: To withdraw your question. Please press star one again please.

Speaker Change: Please be advised that today's conference is being recorded.

Speaker Change: I would now like to hand, the conference over to your Speaker today building off for Ya, Vice President of Investor Relations and corporate development. Please go ahead.

Speaker Change: And in the appendix of today's presentation I'll now turn the presentation over to OLED on slide three thanks, Bill and Hello, everyone and thank you for joining US we are excited to discuss another successful quarter for growth underpinned by solid execution across the business through the greif business system before we dive into.

Speaker Change: Thank you.

Speaker Change: Our results I would like to widen our lens and discuss key off base on our build to last strategy, specifically touching on each of our four missions for value creation.

Speaker Change: An overview of our financial results and our fiscal full year guidance in accordance with regulation fair disclosure for you to ask questions regarding topics you consider important because we are prohibited from discussing material nonpublic information with you on an individual basis. Please turn to slide two.

Speaker Change: This will help contextualize our continued solid performance despite the persistence and various headwinds our business has recently faced as well as why we believe <unk>.

Speaker Change: Is positioned for near and long term outperformance.

Speaker Change: First I will discuss our creating thriving communities.

Speaker Change: And delivering legendary customer service peer loss through the principles of the service profit chain.

Speaker Change: And then touch on how we protect our future for our customers and our communities Larry will discuss our quarter results and how we ensure financial strength through strategic capital allocation.

OLED: It can be found in the appendix of today's presentation I'll now turn the presentation over to OLED on slide three thanks, Bill and Hello, everyone and thank you for joining US we are excited to discuss another successful quarter for growth underpinned by solid execution across the business through the greif business system before we do.

Speaker Change: As a reminder to all our vision is to be the best performing customer service company in the World. We consider our primary customers to be our end product customers, our supply chain partners, our colleagues and our financial stakeholders.

Speaker Change: Diving into our results I would like to widen our lens and discuss key updates on our build to last strategy specifically touching on each of our four missions for value creation. This will help contextualize our continued solid performance, despite the persistence and very hits headwinds our business.

Speaker Change: Everything we do focuses on improving our service to these customers through dedication to the principles of the service profit chain, which I'll now discuss on slide four.

Speaker Change: As recently faced as well as why we believe <unk> is.

Speaker Change: Our service profit chain has created a competitive advantage for growth through investing in our people. This creates a flywheel.

Speaker Change: <unk> is positioned for near and long term outperformance.

Speaker Change: First I will discuss our creating thriving communities and delivering legendary customer service peer loss.

Speaker Change: Our value creation as colleagues are engaged and dedicated to providing legendary customer service.

Through the principles of the service profit chain.

Speaker Change: <unk> recognized the value <unk> delivers from a differentiated product and service standpoint.

Speaker Change: He will then touch on how we protect our future for our customers and our communities Larry will discuss our quarter results and how we ensure financial strength through strategic capital allocation.

Speaker Change: This culminates in improved customer loyalty and increase share of wallet over time.

Speaker Change: Due to our steadfast conviction in the power of this value creation model, we monitor engagement of our colleagues and customers very closely.

Larry: As a reminder to all our vision is to be the best performing customer service company in the world.

Speaker Change: We consider our primary customers to be our end product customers, our supply chain partners, our colleagues and our financial stakeholders.

Speaker Change: Net promoter score measure our customers' willingness to actively promote on our behalf not simply a passive satisfaction in our products.

Speaker Change: Our it our net promoter score continues to consistently improve with each survey most.

Speaker Change: Everything we do focuses on improving our service to these customers through dedication to the principles of the service profit chain, which I'll now discuss on slide four.

Speaker Change: Most recent score of 68 completed this April is well above the average across the manufacturing sector of 49, which reflects that our customers' advocate strongly on our behalf.

Speaker Change: Our service profit chain has created a competitive advantages for <unk> through investing in our people. This creates a flywheel for.

Speaker Change: We likewise measure colleague engagement through an independent survey conducted by Gallup.

Speaker Change: Value creation as colleagues are engaged and dedicated to providing legendary customer service customers recognize the value <unk> delivers from a differentiated product and service standpoint.

Speaker Change: This call Likewise has continuously improved and our most recent results of the 85th percentile puts Christ in the top tier of engagement among all manufacturing companies.

Speaker Change: This culminates and improve customer loyalty and increase share of wallet over time.

Speaker Change: We are proud to have been awarded the 'twenty 'twenty four exceptional workplace award by Gallup in recognition of our people first culture.

Speaker Change: Due to our steadfast conviction in the power of this value creation model, we monitor engagement of our colleagues and customers very closely.

This award follows from last quarter. When we were named for the second year in a row among newsweek's top 100 global most loved workplaces.

Speaker Change: Net promoter score measure our customers' willingness to actively promote on our behalf not simply a passive satisfaction in our products.

Speaker Change: These statistics are meaningful as they demonstrate our people are with us on our build to last journey and alongside our Greif business system odd enabled us which drive our performance each quarter and are fundamentally changing how we operate and deliver results as a company.

Speaker Change: Our our net promoter score continue to consistently improve with each survey most.

Speaker Change: Most recent score of 68 completed this April is well above the average across the manufacturing sector of 49, which reflects that our customers' advocate strongly on our behalf.

Speaker Change: Let's now discuss protecting our future on slide five.

Speaker Change: We likewise measure colleague engagement through an independent survey conducted by Gallup.

Speaker Change: And sustainability is ingrained in our culture, our processes systems and relationships with our customers and suppliers.

Speaker Change: This call Likewise has continuously improved and the most recent results of the 85th percentile puts <unk> in the top tier of engagement among all manufacturing companies.

Speaker Change: I believe that in order to provide legendary customer service, we must understand the needs of our customers and create solutions alongside them.

Speaker Change: We are proud to have been awarded the 2020 for exceptional workplace award by Gallup in recognition of our people first culture.

Speaker Change: This both continuously improves our own sustainability journey, and also improves customer loyalty and share of wallet over time.

Speaker Change: This award follows from last quarter. When we were named for the second year in a row among newsweek's top 100 global most loved workplaces.

Speaker Change: This quarter, we released our 15th annual sustainability report, which provides a comprehensive overview of our 2030 targets as well as recent milestones and progress.

Speaker Change: These statistics are meaningful as they demonstrate our people are with us on our build to last journey and alongside our Greif business system enabled us which drive our performance each quarter and are fundamentally changing how we operate and deliver results as a company.

Speaker Change: Sustainability is another way in which price differentiation to the service profit chain and has bolstered our profitable growth overtime we.

Speaker Change: We encourage all of our stakeholders to read our latest sustainability report, which is available at <unk> com forward slash sustainability.

Speaker Change: Let's now discuss protecting our future on slide five.

Speaker Change: Please turn to slide six.

Yeah.

Bryce: And Bryce sustainability is ingrained in our culture, our processes systems and relationships with our customers and suppliers.

Speaker Change: This dedication to the service profit chain and its was sold in value creation flywheel has enabled us to accelerate our growth and transform our portfolio for the future.

Speaker Change: It's our belief that in order to provide legendary customer service, we must understand the needs of our customers and create solutions alongside them.

Speaker Change: As we announced at our 2022 Investor day and have discussed often since we are pursuing an acquisition strategy to come up to become a global leader in high performance high margin small plastic containers and generic <unk>.

Speaker Change: This both continuously improves our own sustainability journey, and also improves customer loyalty and share of wallet over time.

This quarter, we released our 15th annual sustainability report, which provides a comprehensive overview of our 2030 targets as well as recent milestones and progress.

Speaker Change: This product group has an addressable market of over $3 billion and is favorably exposed to secular growth markets, such as flavors and fragrances food and beverage pharma and <unk>.

Speaker Change: Sustainability is another way in which price differentiation to the service profit chain and has bolstered our profitable growth over time.

Speaker Change: In March we completed our acquisition of AIPAC him and in doing so have now solidified the global platform that we committed to growing within the high performance portion of that $3 billion addressable markets.

Speaker Change: We encourage all of our stakeholders to read our latest sustainability report, which is available at <unk> com forward slash sustainability.

Integration integration is going well and we are confident in our ability to capture the $7 million of synergies as previously communicated.

Speaker Change: Please turn to slide six.

Speaker Change: This dedication to the service profit chain and its resulting value creation flywheel has enabled us to accelerate our growth and transform our portfolio for the future.

Speaker Change: As a reminder, the primary synergy opportunities.

Speaker Change: In the form of raw materials scale advantages and expected and planned elimination of executive leadership overlap both of which are already largely ineffective.

Speaker Change: We are extremely pleased with our investments and value creation underway. However, I'll also note that given recent short term softness in the global <unk> market, our revised fiscal 'twenty four guidance reflects an expectation of smaller contribution for the six months of ownership in fiscal 'twenty.

Speaker Change: And then previously commuted communicated run rates.

Speaker Change: Additionally earnings for fiscal year, 'twenty, four will be impacted by a one time expected $8 4 million inventory revaluation expense approximately $6 7 million of which was included in the second quarter results.

Speaker Change: In March we completed our acquisition of AIPAC, Kim and in doing so have now solidified the global platform that we committed to growing within the high performance portion of that $3 billion addressable markets.

Speaker Change: Integration integration is going well and we are confident in our ability to capture the $7 million of synergies as previously communicated.

Speaker Change: This combined the operating.

Speaker Change: The combined operating expertise of our <unk> and legacy <unk> colleagues working together over the past 60 days.

Speaker Change: As a reminder, the primary synergy opportunities.

Speaker Change: In the form of raw materials scale advantage and expected and planned elimination of executive leadership overlap both of which are already largely ineffective.

Speaker Change: Has further strengthened our conviction in the solid organic growth fundamentals of the business as well as long term earnings power of our capital we have invested in the small plastic and European markets.

Speaker Change: We are extremely pleased with our investments in value creation underway. However, I'll also note that given recent short term softness in the global <unk> market, our revised fiscal 'twenty four guidance reflects an expectation of smaller contribution for the six months of ownership in fiscal 'twenty.

Speaker Change: Please turn to slide seven as we shift gears to the quarter and a discussion of our recent operating environments.

Speaker Change: In the past three months, we have seen a continuation of the same mixed demand trends as in recent quarters in APAC, which as a reminder is approximately 5% of total company net sales were showing positive demand signals in Q1, However in Q2.

Speaker Change: More than previously commuted communicated run rates.

Speaker Change: Additionally earnings for fiscal year, 'twenty, four will be impacted by a one time expected $8 4 million inventory revaluation expense.

Speaker Change: <unk> reversed after the Mark after the market strong demand expectations for Chinese new year fell short of expectations and a quick Buck significant destocking occurred.

Speaker Change: Approximately $6 7 million of which was included in the second quarter results.

This combined the operating <unk>.

Speaker Change: That lower level of demand has thus far persisted into Q3.

Speaker Change: The combined operating expertise of our <unk> and legacy <unk> colleagues working together over the past 60 days.

Speaker Change: EMEA Gripes largest G IP market positive demand trends have continued for the second quarter in a row with growth coming broadly across end markets, but notably in chemical and lubricant demand.

Speaker Change: Further strengthened our conviction in the solid organic growth fundamentals of the business as well as long term earnings power of our capital we have invested in the small plastic and European markets.

Speaker Change: In the Americas, Latam was flat year over year with mixed demand. However, we are encouraged that Latam saw the same growth in chemical markets as EMEA, despite slower demand from Atkins.

Speaker Change: Please turn to slide seven as we shift gears to the quarter and a discussion of our recent operating environments.

Speaker Change: In the past three months, we have seen a continuation of the same mixed demand trends as in recent quarters in APAC, which as a reminder, it's approximately 5% of total company net sales were showing positive demand signals in Q1. However.

Speaker Change: North America, Likewise remains mixed but has improved overall on a sequential basis.

Speaker Change: Although overall chemical demand remains weak in that region. We anticipate continued sequential demand improvement in Q3 in North America, as well as Latam and EMEA, which is reflected in our revised guidance.

Speaker Change: In Q2 trends reversed after the mark after the market strong demand expectations for Chinese new year fell short of expectations and a quick but significant destocking occurred.

We will be monitoring monitoring our key end markets closely and responding to real time demand changes to ensure we fully capture opportunities as they present themselves.

Speaker Change: That lower level of demand has thus far persisted into Q3.

Lastly, on North American paper business continues to slow, but steady improvement in containerboard driven by our bulk box business, which feeds into ecommerce channels offset by softer although sequentially improving Cuban core demands driven by stronger construction and film call volumes.

Speaker Change: In EMEA <unk> largest CIP market positive demand trends have continued for the second quarter in a row with growth coming broadly across end markets, but notably in chemical and lubricant demand.

Speaker Change: We also.

Speaker Change: We expect this modest improvement trend to continue.

Speaker Change: In May we saw that continuation with our paper business showing modest improvement led by construction and film demands and <unk> and anticipate continued improvements in containerboard driven by the opening of our Dallas sheet feeder.

Speaker Change: North America, Likewise remains mixed but has improved overall on a sequential basis.

Speaker Change: CIP EMEA, North America, and Latam All show sequential improvement over April with APAC demand mixed with slower China demand and stronger southeast Asia demands.

Speaker Change: We will be monitoring monitoring our key end markets closely and responding to real time demand changes to ensure we fully capture opportunities as they present themselves.

Speaker Change: Overall, when talking to our customers. They generally positivity. However, it remains coupled with our customers, indicating continued short visibility so they own demands we saw.

Speaker Change: Lastly, our North American paper business continues to slow, but steady improvement in containerboard driven by our bulk box business, which feeds into ecommerce channels offset by softer although sequentially improving <unk> core demands driven by stronger construction and film call volume.

Speaker Change: And uncertainty to the duration of this improving demand trends for that reason, we are continuing to be prudent on cost management. While also monitoring in buckets closely for more clearly defined science of improvements and with that I'll now turn it over to Larry to walk you through our detailed financial results.

Speaker Change: <unk>.

Speaker Change: We also expect this modest improvement trend to continue.

Larry: On slide eight.

Larry: Thank you Julie and thank you all for joining our call.

Larry: Our second quarter results reflect improving but still weak demand and the extremely challenging price cost dynamics in our paper business, resulting in $170 million of adjusted EBITDA $59 million of free cash flow.

Speaker Change: CIP EMEA, North America, and Latam All show sequential improvement over April with APAC demand mixed with slower China demand and stronger southeast Asia demands.

Larry: And adjusted EPS of <unk> 82 per share.

Larry: As already mentioned, we are leaning on the great business system to serve our customers with excellence manage cost and diligently monitor our business for signs of an inflection.

Speaker Change: Overall, we're talking to our customers. They generally positivity. However, it remains coupled with our customers, indicating continued short visibility so they own demands.

Speaker Change: The great business system champions for continuous improvement accelerate plant modernization and automation as well as creates value through gamba and six Sigma programs. Using these tools, we continue to drive structural cost out and build productivity gains that not only help optimize our current business, but also provides the foundation to.

Speaker Change: And uncertainty to the duration of this improving demand trends for that reason, we are continuing to be prudent on cost management. While also monitoring in pockets closely for more clearly defined science of improvements and with that I'll now turn it over to Larry to walk you through our detailed financial results.

Speaker Change: Accelerate integration and synergy capture as we grow through acquisitions.

Speaker Change: While managing the present, we are also growing through for the future through the AIPAC can acquisition and through high value capital projects, such as our recently opened Dallas She theater.

Speaker Change: On slide eight.

Julie: Thank you Julie and thank you all for joining our call.

Speaker Change: These investments are critical to our long term vision and strategy and will position us well for outperformance once markets return to a normalized state.

Speaker Change: We are re and stating guidance range, given our confidence in our view of the remainder of our fiscal year. We are pleased to raise the low end from our prior $610 million to $675 million and at a high end of 600 $725 million.

Larry: And adjusted EPS of <unk> 82 per share.

Larry: As already mentioned, we are leaning on the great business system to serve our customers with excellence manage cost and diligently monitor our business for signs of an inflection.

Speaker Change: Before discussing guidance assumptions, let me provide a segment performance update starting on slide nine.

Larry: The great business system champions for continuous improvement accelerates plant modernization and automation as well as creates value through gamba and six Sigma programs. Using these tools, we continue to drive structural cost out and build productivity gains that not only help optimize our current business, but also provides the foundation to.

Speaker Change: For GIC, continuing weak, but improving demand led to a year over year sales decline of $57 million and margin compression of one 5% year over year. In addition, SG&A costs were up year over year in line with our expectations communicated in our Q4 call. This is primarily a result of DNA.

Larry: Accelerate integration and synergy capture as we grow through acquisitions.

Larry: While managing the present, we are also growing for the future through the <unk> acquisition and through high value capital projects, such as our recently opened Dallas sheet Theater.

Speaker Change: Step up on new acquisitions, as well as our ongoing strategic investments in <unk>.

Speaker Change: And global operating excellence, which while expense we view as strategic capital we are investing for long term margin improvement.

Larry: These investments are critical to our long term vision and strategy and will position us well for outperformance once markets return to a normalized state.

Speaker Change: Despite the incremental cost of these investments margins rallied strongly by over four 4% on a sequential basis from fiscal Q1, 'twenty 'twenty four.

Speaker Change: We are re and stating a guidance range given our confidence in our view of the remainder of our fiscal year. We are pleased to raise the low end from our prior $610 million to $675 million and at a high end of 600 $725 million.

Speaker Change: It is only touched on EMEA have continued to improve underpinned by strong lube and chemical markets. The Americas remained flat to down as lube and chemical demand improvements has not yet been seen however, North America has seen overall sequential improvement and we do anticipate that recovery to continue into the second half of our fish.

Before discussing guidance assumptions, let me provide a segment performance update starting on slide nine.

Speaker Change: Full year.

Speaker Change: Please turn to slide 10 for our PPS results.

Speaker Change: We continued delayed recognition of announced pricing increases combined with the rising OCC costs has led to a significant margin compression of over 10% Despite flat sales.

Speaker Change: DNA step up on new acquisitions, as well as our ongoing strategic investments in it.

Speaker Change: Our PPS team is continuing to manage controllable as well, including successful price increase implementation on our non index based customers.

Speaker Change: And global operating excellence, which while expense we view as strategic capital we are investing for long term margin improvement.

Speaker Change: However, the outsized impact of the index, driven price cost dynamic, which we still view to not be in sync with real market trends is a headwind we have and will continue to aggressively work to offset on the volume side in containerboard, we are seeing modest improvement, while the tube and core end markets remain flat to down.

Speaker Change: Despite the incremental cost of these investments margins rallied strongly by over four 4% on a sequential basis from fiscal Q1, 'twenty 'twenty four.

As always touched on EMEA continued to improve underpinned by strong lube and chemical markets.

Speaker Change: While managing the present, we are also continuing to invest in the future within this product group, resulting in SG&A cost inflation for similar strategic initiatives as discussed with Gi P. Please.

Speaker Change: <unk> remained flat to down as lube and chemical demand improvements has not yet been seen however, North America has seen overall sequential improvement and we do anticipate that recovery to continue into the second half of our fiscal year.

Speaker Change: Please turn to slide 11 for our updated guidance and outlook.

Speaker Change: As previously stated we are providing a guidance EBITDA range of $675 million to $725 million, reflecting an increase of $65 million on the low end at the high end of our guidance range reflects recognition of our announced paper price increases as well as continued margin improvement in VIP bye.

Speaker Change: Please turn to slide 10 for our PPS results.

We continued delayed recognition of announced pricing increases combined with the rising OCC costs has led to a significant margin compression of over 10% despite flat sales or.

Speaker Change: Our PPS team is continuing to manage controllable as well, including successful price increase implementation on our non indexed based customers.

Speaker Change: Contrast, the low end of our guidance range assumes no paper price recognition.

Speaker Change: Slight further OCC cost inflation and no margin improvement in VIP on the volume side, our guidance change of 22% to 62 million of EBITDA assumes further contribution of the improving volume trends across most of our products and end markets as already mentioned earlier our ink.

Mental EBIT contribution from AIPAC Cam is less than previously disclosed run rate due to a full year impact of purchase accounting of $8 $4 million as well as short term slowest slowness in the global AG markets.

Speaker Change: Please turn to slide 11 for our updated guidance and outlook.

Speaker Change: Lastly, we anticipate volume related as well as inflationary transport and manufacturing headwinds of 19% to 39 million of EBITDA relative to prior guidance.

Speaker Change: As previously stated we are providing a guidance EBITDA range of $675 to $725 million, reflecting an increase of $65 million on the low end. The high end of our guidance range reflects recognition of our announced paper price increases as well as continued margin improvement in VIP bye.

Speaker Change: As for free cash flow, we are leaving our previous guidance unchanged as our midpoint at 200 million for the full year, we anticipate that the increase in our EBIT guidance midpoint of $90 million will not result in incremental cash flow within fiscal 'twenty for the drivers of this are.

Speaker Change: Contrast, the low end of our guidance range assumes no paper price recognition.

Speaker Change: At the midpoint higher spend on strategic Capex and efficiency related maintenance projects were 20 million higher cash interest primarily related to the acquisition of Aipac's.

Speaker Change: Slight further OCC cost inflation and no margin improvement in <unk> on the.

Speaker Change: <unk> side, our guidance change of 22% to $62 million of EBITDA.

Speaker Change: Further contribution of the improving volume trends across most of our products and end markets as already mentioned earlier, our incremental EBIT contribution from Ipass <unk> is less than previously disclosed run rate due to a full year impact of purchase accounting of $8 $4 million as.

Speaker Change: $25 million higher cash taxes of $26 million related to improved earnings as well as the failure of Congress to extend favorable tax provisions higher working capital needs to address in roofing demand of $32 million, partially offset by a favorable $13 million of other miscellaneous cash items.

Speaker Change: Well as short term slowest slowness in the global AG markets.

Speaker Change: <unk>.

Speaker Change: As already mentioned in his remarks, while we continue to monitor our business near term. It is critical we also maintain a long term land and invest for the future as such I would like to discuss capital allocation on slide 12.

Speaker Change: Lastly, we anticipate volume related as well as inflationary transport and manufacturing headwinds of 19% to 39 million of EBITDA relative to prior guidance.

Speaker Change: As for free cash flow, we are leaving our previous guidance unchanged as our midpoint at $200 million for the full year, we anticipate that the increase in our EBIT guidance midpoint of $90 million will not result in incremental cash flow within fiscal 'twenty for the drivers of this are at the mid point higher.

Speaker Change: Under build to last which we define as fiscal 'twenty two through present, we have deployed over $2 6 billion of capital our capital allocation framework is simple we first invest in two non negotiable are safety and maintenance Capex, which keeps our cash machine running and our regular and increasing dividend while.

Speaker Change: Spend on strategic Capex and efficiency related maintenance projects were 20 million higher cash interest primarily related to the acquisition of Aipac's.

Speaker Change: While critical these users are not a significant portion of total cash generated in that same timeframe and so the rest we devoted towards growing our business and increasing shareholder return.

Speaker Change: $25 million higher cash taxes of $26 million related to improved earnings as well as the failure of Congress to extend favorable tax provisions higher working capital needs to address and driving demand of $32 million, partially offset by a favorable $13 million of other miscellaneous cash items.

Speaker Change: On the growth side. The recent majority has come through developing the leading global small plastics platform, which fully discussed in his remarks. The long term benefits of this business are substantial and we are encouraged by our successful execution of the transactions our integration progress in synergy realization we.

Speaker Change: Balanced growth with debt reduction at times when it is necessary to temporarily increase our leverage above our long term target of leverage ratio in the range of two to two five times in order to capitalize on long term value accretive growth opportunities such as <unk>.

Speaker Change: <unk>.

Speaker Change: Given our current leverage we anticipate in the short term prioritizing in incremental debt reduction we have confidence in the value creation benefits of our capital deployment under build to last and we will plan to do dive deeper into this topic at our upcoming Investor day in December with that I'll turn things back to <unk> for closing closing on slide 13.

Larry: Alright. Thank you Larry I appreciate each of you taking the time to listen to my opening remarks on our strategy and hope that I clearly communicated the value creation, which is occurring through leveraging what we do best customer service to drive growth and transform our business.

Speaker Change: Our recent capital investments and internal initiatives are setting the stage for the next wave of accelerated growth at <unk> Albright.

Our bright business system and the vacation to the service profit chain have combined to create a flywheel of success, which is driving growth and our disciplined capital allocation framework.

Speaker Change: We have an investor day upcoming this December and plants will discuss in greater detail. The changes we are currently making through the greif business system to transform our organization for breakout success.

Speaker Change: Given our current leverage we anticipate in the short term prioritizing incremental debt reduction we are confident in the value creation benefits of our capital deployment under build to last and we will plan to dive deeper into this topic at our upcoming Investor day in December with that I'll turn things back to <unk> for closing closing on slide 13.

Speaker Change: Operator will you. Please open the lines for Q&A.

Speaker Change: Thank you as a reminder to ask a question. Please press star one one of your telephone away from beginning to be announced.

Speaker Change: To withdraw your question. Please press star one again.

Speaker Change: Our first question comes from the line of Ghansham Panjabi with Baird. Your line is now open.

Speaker Change: Hi, Good morning. This is a this is Matt krueger sitting in for Ghansham How's everybody doing today.

Speaker Change: Great.

Speaker Change: Wonderful.

Speaker Change: Our recent capital investments and internal initiatives are setting the stage for the next wave of accelerated growth at <unk> are.

Speaker Change: So I guess I just wanted to start off with a quick question on volumes can you provide some added detail on the volume cadence across both business segments. During the quarter and then just some early thoughts on how the third fiscal quarter has kicked off would be really helpful as well.

Speaker Change: <unk> business system and dedication to the service profit chain have combined to create a flywheel of success, which is driving growth and our disciplined capital allocation framework.

Speaker Change: Yeah, Let me, let me give you some comments that maybe sort of zoom out first and give you kind of a regional overview year on year and then we can go into substrates and I'll make some comments on perhaps on the end markets.

Speaker Change: We haven't had investor day upcoming this December and plan to discuss in greater detail. The changes. We are currently making through the greif business system to transform our organization for breakout success.

Speaker Change: So if you look at it regionally so the strongest market was EMEA, where we saw an 8% growth.

Speaker Change: Operator will you. Please open the lines for Q&A.

Speaker Change: And its also our largest D. G IP markets Latam was flat, we were little bit weaker North America minus 5%.

Speaker Change: Thank you as a reminder to ask a question. Please press star one one of your telephone away from wanting to be announced.

Speaker Change: To withdraw your question. Please press star one again.

Speaker Change: And we were down 11% in APAC.

Speaker Change: Our first question comes from the line of Ghansham Panjabi with Baird. Your line is now open.

Speaker Change: The broad improvement we saw in EMEA was across all industrial end markets for the second straight quarter.

Speaker Change: Hi. Good morning. This is this is Matt krueger sitting in for Ghansham, how is everybody doing today.

Speaker Change: Mostly in bulk chemicals on lubes.

Speaker Change: Great.

Speaker Change: Wonderful.

Speaker Change: In Latam, we saw pockets of strength in both in bulk chemical in paints and coatings and as I mentioned, we had some softness in <unk>. We've seen most other places and again in North America.

Speaker Change: We see continued slow bulk commodities.

Speaker Change: Commodity developments and Atkins demand is down but sequentially from Q1, we do see improvements.

Speaker Change: Yeah, Let me, let me give you some comments that maybe sort of zoom out first and give you kind of a regional overview year on year and then we can go into soft space and I'll make some comments on perhaps on the end markets.

Speaker Change: And I made some comments earlier on APAC Q2 volumes were negatively impacted by seasonality from the Chinese new year and weaker demand from from food, but food and Bev.

Speaker Change: So if you look at it regionally so the strongest market was EMEA, where we saw an 8% growth.

Speaker Change: If we look at soft rates year on year, the strongest Australia.

Speaker Change: And its also our largest <unk> markets Latam was flat we.

Speaker Change: What was plastic we hadn't invested in RBC and we are off.

Speaker Change: We were little bit weaker North America minus 5% and.

Speaker Change: And we were down 11% in APAC.

Speaker Change: Low teens year on year.

Speaker Change: Steel is flat, but it's actually improving up to 10% sequentially.

Speaker Change: The broad improvement we saw in EMEA was across our industrial end markets for the second straight quarter.

Speaker Change: And we are down low singles in fiber, but we are improving again sequentially and it's up 10% and as I said the end market saw really bulk chemicals lubricants, where we see.

Speaker Change: Mostly in bulk chemicals loops.

Speaker Change: Strong developments.

Speaker Change: If we look at it also the economic indicators of the global PMI was above 50 for the last four months, including May which is positive.

Speaker Change: We see continued slow bulk.

Speaker Change: Commodity developments and Atkins demand is down but sequentially from Q1, we do see improvements.

Speaker Change: And which is reflected in these positive signals that we've seen exiting.

Speaker Change: And I made some comments earlier on APAC Q2 volumes were negatively impacted by seasonality from the Chinese new year and weaker demand from food and Bev.

Speaker Change: You don't makes us very positive for the future.

Speaker Change: We stay.

Speaker Change: Connected to our customers our supply chain partners.

Speaker Change: As demand hopefully keeps increasing we will react quickly.

Speaker Change: If we look at soft rates year on year, the strongest Australia.

Speaker Change: We have done in EMEA.

Speaker Change: What was plastic we have invested in IPC and we are off.

Speaker Change: Okay, Great. That's very helpful. And then just a follow up I wanted to touch on price cost a bit can you provide an updated view on the absolute price cost expectations for the year.

Speaker Change: Low teens year on year.

Speaker Change: Steel is flat, but it's actually improving up to 10% sequentially.

Speaker Change: If you could provide some detail on how that how that would how that performed this quarter and what you would expect from the upcoming two quarters that'd be helpful as well.

Speaker Change: And we are down low singles in fiber, but we are improving again sequentially and it's up 10% and as I said the end markets saw really bulk chemicals lubricants, where we see.

Speaker Change: It seems like we could be reaching kind of a peak price cost pain point across your business given the you know the <unk>.

Speaker Change: Strong developments.

Speaker Change: If we look at also the economic indicators of the global PMI was above 50 for the last four months, including made which is positive.

Speaker Change: <unk> initiatives you have in the market I just wanted to check the validity of that statement.

Speaker Change: That's a great question Larry.

Speaker Change: Sure could you answer that yeah, I mean, if you look I mean clearly.

Speaker Change: And which is reflected in these positive signals that we've seen exiting.

Speaker Change: As we looked at.

Speaker Change: What price cost, we had relative to Q Q2 'twenty three.

Speaker Change: Okay.

Speaker Change: We don't makes us very positive for the future.

Speaker Change: Major impact year over year price cost squeeze of about $49 million in paper and in about 20.

We stake.

Nathan: Nathan to our customers our supply chain partners.

Nathan: As demand hopefully keeps increasing we will react quickly.

Speaker Change: But the positive.

Positive 17 out actually in G IP.

Nathan: Like we have done in EMEA.

Speaker Change: Okay, Great. That's very helpful. And then just a follow up I wanted to touch on price cost a bit.

Speaker Change: $12 million of volume benefit in <unk>, and 'twenty 7 million volume benefit and PPS. So trends on volumes good price cost squeeze very harmful to us and then you're looking at going from our.

Speaker Change: Can you provide an updated view on the absolute price cost expectation for the year.

If you could provide some detail on how that how that would how that performed this quarter and what you would expect from the upcoming two quarters that would be helpful as well.

Speaker Change: Yep.

Speaker Change: Our former guidance to current guidance.

Speaker Change: Yes.

Speaker Change: Seems like we could be reaching kind of a peak price cost pain point across your business given the the pricing initiatives you have in the market I just wanted to check the validity of that statement.

Speaker Change: We show.

Speaker Change: From that 610 low end that we gave.

Speaker Change: Actually you know price cost benefit in our Gis business.

Of about <unk>.

Speaker Change: $39 million and volume of 27.

Speaker Change: Yes, that's a great question I think Larry.

Speaker Change: Sure.

Speaker Change: Yeah.

Speaker Change: Within TPS.

Speaker Change: If you look I mean clearly.

Speaker Change: Midpoint $29 million or I mean, I'm, sorry, $16 million price cost lift.

Speaker Change: As we looked at.

Speaker Change: What price cost, we had relative to Q Q2 'twenty three.

Speaker Change: From prior where we were in 15.

Speaker Change: If I'm going from prior year to where we are now youre obvious squeeze numbers on <unk>.

Speaker Change: Major impact year over year price cost squeeze of about $49 million in paper and in about 20.

Speaker Change: But.

Speaker Change: From the $8 19 of last year to $700 million of debt this year within the PPS business.

Speaker Change: Positive 17 out actually in Gis.

Speaker Change: Yes, $12 million of volume benefit in <unk>.

Major squeeze clearly on OCC or roughly 90 $500 million.

<unk> and $27 million volume benefit and PPS, so trends on volumes good price cost squeeze very harmful to us and then looking at going from our.

Speaker Change: You are be at $5 million of pressure and containerboard about about flat.

Speaker Change: And then in our Gis business.

Speaker Change: Prior to our former guidance to current guidance.

Speaker Change: Price and cost about $59 million positive volume about $30 million positive. So hopefully that's what you were looking for Matt.

Speaker Change: We show.

Speaker Change: From that <unk> 10, low end that we gave.

Speaker Change: Actually price cost benefit in our Gis business.

Speaker Change: No. That's very helpful. That's it for me. Thank you.

Speaker Change: Of about <unk>.

Thanks Pat.

Speaker Change: $39 million and volume of 27.

Speaker Change: Our next question comes from the line of George Staphos with Bank of America Securities. Your line is now open.

Speaker Change: Within TPS.

Speaker Change: Midpoint $29 million Army, Im sorry, $16 million price cost lift.

Speaker Change: Hi, everyone. Good morning, Thanks for the details.

George Staphos: I wanted to go to and congratulations on the quarter I wanted to go to slide 11, where you have the waterfall and.

From prior where we were in 15.

Speaker Change: If I'm going from prior year to where we are now youre obvious squeezed numbers on going from the $8 19 of last year to $700 million of debt this year within the PPS business.

Larry I: And Larry if we look at it and only if we look at the volume.

Larry I: Pickup in your guidance.

Larry I: Recognizing.

Speaker Change: There are no guarantees in life things could move more possibly thinks would move more negatively where are you right now in terms of that 22 to 62 million would you say roughly in terms of the volume pick up that in turn.

Speaker Change: Major squeezed clearly on OCC or roughly <unk> 90 $500 million.

Speaker Change: You are be at $5 million of pressure and containerboard about about flat.

Speaker Change: Informed your your improvement in your guidance.

Speaker Change: Yeah, I would say George.

Speaker Change: And then in our Gis business.

Speaker Change: Where we're at in a trend right now is bright smack in the middle of that and so what we did build a range around it based on as already mentioned in his comments.

Matt Leahy: Price and cost about $59 million positive volume about $30 million positive. So hopefully that's what you were looking for Matt Yeah, No that's very helpful.

Speaker Change: There is still some nervousness in our in our some of our customers, but there's also some areas where we're seeing theres potential optimism. So we just we build a range around what we thought was possible for the rest of the year.

Speaker Change: Thats It from me thank you.

Pat: Thanks Pat.

Pat: Our next question comes from the line of George Staphos with Bank of America Securities. Your line is now open.

Speaker Change: Larry.

George Leon Staphos: Hi, everyone. Good morning, Thanks for the details.

Speaker Change: I probably missed this early I probably missed this but if you could.

George Leon Staphos: I wanted to go to and congratulations on the quarter I wanted to go to slide 11, where you have the waterfall.

Speaker Change: Either by end market or by substrate.

Larry I: Maybe both could you just give us kind of a quick where are you year on year early in fiscal three Q.

George Leon Staphos: Yes.

Lawrence Allen Hilsheimer: And Larry if we look at and only if we look at the volume.

Speaker Change: Pickup in your guidance.

Speaker Change: In terms of trends Youre seeing at the moment on volume.

Speaker Change: Recognizing.

Speaker Change: There are no guarantees in life things could move more positively things have moved more negatively.

Speaker Change: Yes.

Speaker Change: I mean those kits.

Speaker Change: Are you right now in terms of that 22% to $62 million would you say roughly in terms of the volume pick up that in turn.

I was thinking of it.

Nobody here, yes.

Speaker Change: So.

Speaker Change: So excellent trends in May now, we're generally positive jaws.

Speaker Change: Informed your improvement in your guidance.

Speaker Change: Steel and container board they they kept improving throughout Q2.

George Leon Staphos: Yes, I would say George.

Speaker Change: Where we're at in the trend right now is bright smack in the middle of that and so what we did build a range around it based on as already mentioned in his comments.

Speaker Change: Plastic in new ERP was a bit more mixed on a month to month basis during the quarter.

Speaker Change: But if we look at G IP and then EMEA they.

Speaker Change: There is still some nervousness in our in our some of our customers, but theres also some areas where we're seeing there is potential optimism. So we just we build a range around what we thought was possible for the rest of the year.

Speaker Change: They remained sequentially strongest.

Speaker Change: As I mentioned.

Speaker Change: But also with North America, and Latam improving.

Speaker Change: Container Board continues to improve and we will soon start benefiting form out balance sheet feeder, which by the way is operational and is producing a ashish that's being sold and in U B. We continue to see construction on film demand increasing in May.

Speaker Change: Larry I, probably missed this already I probably missed this but if you could.

Speaker Change: Either by end market or by substrate, maybe both could you just give us kind of a quick where are you year on year early in fiscal <unk> Q.

Speaker Change: Despite that makes demand in auto end markets.

Speaker Change: In terms of trends Youre seeing at the moment on volume.

Speaker Change: Okay.

Speaker Change: My last two and I'll turn it over just if you could give us a bit more color or remind us. What you said in terms of year on year total in paper. It sounded like containerboard was alright, not gangbusters, but up modestly year on year sequentially Cuban core your B was getty.

Speaker Change: Yes.

Speaker Change: I mean those kits.

Speaker Change: Thinking about <unk> of UBS.

Speaker Change: So so exit trends in May and we're generally positive jaws.

Speaker Change: Steel in container board.

Speaker Change: Kept improving throughout Q2.

Speaker Change: Better but still down.

Speaker Change: Plastic and <unk> was a bit more mixed on a month to month basis during the quarter.

Speaker Change: If you could sort of affirm that and then discuss what youre seeing early in May there and then what kind of price cost should we expect out of steel and VIP in particular, the rest of the year do you have improving or sequentially decelerating benefits there. Thank you.

Speaker Change: But if we look at Gi Pete and then EMEA.

Speaker Change: They remained sequentially strongest.

Speaker Change: As I mentioned.

Speaker Change: But also with North America, and Latam improving.

Speaker Change: Yes, so on steel.

Speaker Change: Containerboard continues to improve and we will soon start benefiting form out balance sheet feeder, which by the way is operational and is producing.

Speaker Change: That will generally keep improving and maybe touch upon that a little bit later on what we're doing internally at sellafield.

ashish: Ashish, that's being sold and in <unk> we.

In Juba coal as I mentioned.

Speaker Change: Film costs are positive and source construction, where we see I wish it by the way is our biggest segment is paper costs.

ashish: Continue to see construction on film demand increasing in May.

ashish: Despite the mixed demand in auto end markets.

ashish: Okay.

Speaker Change: We haven't really seen any major recovery of that.

Speaker Change: Whilst we are doing well in paper costs, we also selling tool.

Speaker Change: Auto paper companies, we haven't seen a pick up there yes.

Speaker Change: But we hopefully we'll see that soon.

Speaker Change: Thank you so much.

Speaker Change: Thank you.

Speaker Change: Our next question comes from the line of Mike Roxanne with choice Securities. Your line is now open.

Speaker Change: Better but still down.

Speaker Change: Sort of affirm that and.

Speaker Change: Discuss what Youre seeing early in May there and then what kind of price cost should we expect out of steel and VIP in particular, the rest of the year do you have improving or sequentially decelerating benefits there. Thank you.

Mike Roxanne: Thank you Lorie and bill for taking my questions.

Mike Roxanne: First question I just had on.

Mike Roxanne: Slide 11, I think Larry if I heard you correctly you mentioned there.

Mike Roxanne: $19 million to $39 million of manufacturing headwinds.

Yes, so on steel that will generally keep improving and maybe touch upon that a little bit later on what we're doing internally at self help.

Speaker Change: That's new.

Speaker Change: What's driving that.

Larry I: The trading the predominant driver of that is volume so with volume pick up get more incremental transport cost and then go a little bit of additional.

Speaker Change: And Juba coal as I mentioned.

<unk>.

Speaker Change: Film costs.

Speaker Change: Positive and source construction, where we see I wish it by the way is our biggest segment is paper costs.

Larry I: Additional manufacturing costs, just volume driven.

Larry I: Gotcha perfect. Thank you Beth and I also just can you talk about.

Speaker Change: We haven't really seen any major recovery of that.

But the operating leverage in the business that could be released maybe once global volume start to normalize and you say, yes, you're certainly early stages depending on region.

Speaker Change: So we are doing well and payroll costs, we also selling tool.

Speaker Change: Auto paper companies, we haven't seen a pick up there yes, but.

Larry I: Obviously the volume improvement.

Speaker Change: But we hopefully we won't see that soon.

Beth: Once everything let's say is firing all cylinders, what's what's this type of operating leverage that could potentially be released to positively impact the business.

Speaker Change: Thank you so much.

Speaker Change: Thank you.

Speaker Change: Our next question comes from the line of Mike <unk> with <unk> Securities. Your line is now open.

Beth: Yeah.

Speaker Change: Yeah, basically is as volume picks up you know.

Speaker Change: Thank you Lorie and bill for taking my questions.

Speaker Change: Predominant foster that ended up occurring and of course in addition to transport it.

Speaker Change: Yes.

Speaker Change: First question I just had on slide 11, I think Larry if I heard you correctly you mentioned there.

Speaker Change: The the raw material cost, but your value add is going to be about 50%, but I'd say generally just assume excess of 20% gross margin pick up on incremental volume and you know if you look back if we get a return to 22 volume levels, we would end up being.

Speaker Change: $19 million to $39 million of manufacturing headwinds.

Speaker Change: That's new.

Speaker Change: What's driving that.

The trade because the predominant driver of that is volume so with volume pick up get more incremental transport cost and then a little bit of additional.

Picking up about $160 million of EBITDA and that doesn't even factor in the incremental EBITDA from getting to full run rate on all of our acquisitions and getting back on price cost, where we need to be on paper. So yeah, we see a path back with a return.

Speaker Change: Additional manufacturing costs, just volume driven.

Speaker Change: Got you perfect. Thank you Beth.

Speaker Change: So just can you talk about.

Speaker Change: The operating leverage in the business that could be released maybe once global volume start to normalize and you say youre certainly early stages depending on region.

Speaker Change: Economic conditions to well over $900 million of EBITDA. Let me also just talks on our initiatives are internal initiatives on cost savings.

Speaker Change: Servicing the volume improvement.

Speaker Change: Once everything let's say is firing all cylinders, what's what's this type of operating leverage that could potentially be released positively impact the business.

Speaker Change: The impact of our bright business systems. So we operating at a high level and we are always looking for what we call internally aggregation of marginal gains across all 250 locations.

Speaker Change: Yes.

Speaker Change: Yeah basically yes.

Speaker Change: As volume picks up.

Speaker Change: Predominant phosphagen ended up occurring in currently in addition to transport is just the raw material cost, but your value add is going to be about 50%, but I would say generally just assume excess of 20% gross margin pickup on incremental volume and if you look back if we get a return to 'twenty two.

Speaker Change: Our sourcing team as an example recently finalized the targeted review in North America, which in a particular area, which will reduce total spend for this area by an estimated 8%.

Speaker Change: They also did a recent view of a certain global indirect material spend.

Speaker Change: Volume levels, we would end up being.

Speaker Change: The solid and an estimated one weighted cost savings of 5%.

Speaker Change: Picking up about $160 million of EBITDA and that doesn't even factor in the incremental.

Speaker Change: We also recently conducted as an example to full scope steel plant operational excellence reviews.

Speaker Change: EBITDA from getting to full run rate on all of our acquisitions.

Speaker Change: Which were but these plans were previously underperforming our expectations and these reviews. They include a full value stream mapping and lean six Sigma review and by focusing on raw material usage and reducing scrap each of these two plants have seen a sustained EBITDA margin increase of approximately.

Speaker Change: And getting back on price cost, where we need to be on paper. So yes, we see a path back with returning economic conditions to well over $900 million of EBITDA.

Speaker Change: Let me also just talks on our initiatives are internal initiatives on cost savings.

Speaker Change: The impact of our business systems, So we operating at a high level.

The 800 bps relative to their client performance.

Speaker Change: We are always looking for what we call internally aggregation of muscle gains across all 250 locations.

Speaker Change: I visited the plant recently, whoever who have over the past few years made a significant improvement on their NPS and gallops costs.

Speaker Change: Our sourcing team as an example recently finalized a targeted review in North America, which in a particular area, which will reduce total spend for this area by an estimated 8%.

Speaker Change: And when you look at the profitability trends for that plant it correlates extremely well.

Speaker Change: And with.

Speaker Change: With these things in their plant performance is about top tier so the aggregation of these types of module gains. They are a big part of our improved structural margin profiles. So it's really playing on the entire piano.

Speaker Change: They also did a recent review of certain global indirect material spend.

Speaker Change: The solid and an estimated one way cost savings of 5%.

Speaker Change: We also re.

Speaker Change: Yeah spanning from operational and commercial excellence initiatives supply chain and sourcing and.

Speaker Change: <unk> conducted as an example to full scope steel plant operational excellence reviews.

Speaker Change: I should also mention that our automation efforts, which is reflected in our earnings.

Speaker Change: Which were but these plans were previously underperforming to our expectations.

Speaker Change: Thank you all for.

Speaker Change: These reviews. They include a full value stream mapping and lean six Sigma review and by focusing on raw material usage and reducing scrap each of these two plants have seen a sustained EBITDA margin increase of approximately 800 bps relative to their prior performance.

Speaker Change: A quick follow up how many of your facilities.

Speaker Change: It would be subject to those types of reviews I mean, how much further runway do you have in terms of improving that level profitability like that.

Speaker Change: To be honest with you I.

Speaker Change: Previously I thought okay, there must be a limit somewhere but I keep getting surprised then we have a we have a good and bad we have a six Sigma program and just to give you an idea of the size of our six Sigma program. We have nearly 700 petition participants across the globe.

Speaker Change: I visited the plant recently, who have who have over the past few years made a significant improvement on their NPS gallops cost and when you look at the profitability trends.

Speaker Change: That plant it correlates extremely well.

Speaker Change: To date, we have 400 white belts 170, yellow belts, Huntington 30, Green belts, and we have 10 black belts.

Speaker Change: Yes.

With these things in their plant performance is about top tier so the aggregation of these types of module gains. They are a big part of our improved structural margin profiles. So we are truly paying on the entire P&L as you can hear spanning from operational and commercial excellence initiatives supply chain and <unk>.

Speaker Change: And they all have projects of a certain magnitude driving savings to the bottom line and when you look at the we.

Speaker Change: We have deployed base.

250 plants, the things IC alignment meant to some of them the things I see the surprises me hey, could we really find that sort of savings there. It's just amazing.

Speaker Change: Sourcing and.

Speaker Change: She also mentioned that our automation efforts, which is reflected in our earnings.

Speaker Change #100: And Youre looking at years and years of runway on these initiatives and you can say, okay. You find like a 300000 here 700000 Bad book when you added up you know.

Speaker Change: Thank you all either look for quick follow up how many of your facilities could be subject to those types of reviews I mean, how much further runway do you have in terms of improving.

Speaker Change #100: And that's why we call it aggregation of module against it becomes big numbers over time.

Speaker Change: Level profitability like that.

To be honest with you.

Previously I thought okay, there must be a limit somewhere.

Speaker Change #101: Understood. Thanks, very much for the color.

Speaker Change: Getting surprised we have a we have a game that we have a six Sigma program and just to give you an idea of the size of our six Sigma program. We have nearly 700 petition participants across the globe.

Speaker Change #102: Thank you.

Our next question comes from the line of Brian Butler with Stifel. Your line is now open.

Speaker Change #103: Hey, good morning, Thank you very much for taking the questions.

Brian: Hey, Brian.

Speaker Change: To date, we have 400 white balance 170, <unk> hundred 30, rebuilds that we have Tim black belts.

Speaker Change #105: You talked about getting to that $900 million EBITDA.

Brian Butler: I was hoping you can maybe just talk about maybe high level what are those components that get you there and just kind of walk through it you know the price cost volume and if theres anything else.

Speaker Change: And they all have projects of a certain magnitude driving savings to the bottom line and when you look at that.

Speaker Change #107: From the <unk>.

Speaker Change: Employee base.

Speaker Change #107: Yes.

May be the single largest component of that is just getting back to volume levels in 'twenty two.

Speaker Change: 250 plants, the things IC and I've mentioned some of them the things I see the surprises me, hey, could we really find that sort of savings there.

Speaker Change #107: And that alone is a $160 million driver at current margin rates. So.

Speaker Change: Amazing.

Speaker Change: And youre looking at years and years of runway all these initiatives.

Speaker Change #108: Look good on a little bit on volume recovery sequentially, but you look on a two year stack volumes are still significantly off and obviously, that's evidenced in the economic data with a PMI statistics and everything else. So.

Speaker Change: You can say, okay, you find like 300000 here several hundred thousand Bad book when you added up.

Speaker Change: And then that's why we call it aggregation of module against it becomes big numbers over time.

Speaker Change #108: Getting back to that kind of volume level drives a huge amount of earnings lift for us and so as already mentioned, we undertake all of these operational improvement areas to really change our structural cost drivers. So that we can even tweak that more than cover other inflationary costs.

Speaker Change: Understood. Thanks, very much for the color.

Speaker Change: Thank you.

Speaker Change: Our next question comes from the line of Brian Butler with Stifel. Your line is now open.

Speaker Change: Hey, good morning, Thank you very much for taking the questions.

Brian Butler: Hey, Brian.

Speaker Change: Right.

Speaker Change: You talked about getting to that 900 million EBITDA.

Speaker Change #108: The secondary element is clearer.

Brian Butler: I was hoping we can maybe just talk about maybe high level. What are those components that that gets you there and just kind of walk through it the price cost volume and if theres anything else.

Speaker Change #108: Clearly getting back to what we consider.

Speaker Change #108: Much needed well deserved and.

Speaker Change #108: Price cost in our paper business as evidenced by the price increases we recently announced.

Speaker Change: From the second half.

Brian Butler: Yes.

Speaker Change: Maybe the single largest component of that is just getting back to volume levels of 22.

Speaker Change #108: And those things and drive a big pickup as well.

Speaker Change: And that alone is a $160 million driver at current margin rates.

Speaker Change #109: And then just getting full run rate on and performance level back on the acquisitions we've done.

Speaker Change: We look good on a little bit on volume recovery sequentially, but you look on a two year stack volumes are still significantly off and obviously, that's evidenced in the economic data with PMI statistics and everything else. So.

Speaker Change #110: And then also this new Dallas G. Peter business in our containerboard business you put all those elements together and it drives you easily over that 900 million dollar figure.

Speaker Change #111: Okay, and you mentioned that the recent kind of <unk> price increases.

Speaker Change: Getting back to that kind of volume level drives a huge.

Speaker Change #112: And how much of that is in the <unk>.

Speaker Change: <unk> of earnings lift for us and so as already mentioned, we undertake all of these operational improvement areas to really change our structural cost drivers. So that we can even tweaked that more than cover other inflationary costs. The other the secondary element is clear.

Speaker Change #113: 40 to 70 or is that.

Speaker Change #114: The low and zero in the high end, 100% or something some other mix.

Speaker Change #115: We really expect that we should get full recognition of these these price increases their need and deserve any inflationary costs. We've had at all of our production and pay per gate gate grades are substantial and we obviously need to earn an appropriate return.

Speaker Change: Clearly getting back to what we consider.

Speaker Change: Much needed well deserved and.

Speaker Change: Price cost in our paper business as evidenced by the price increases we recently announced.

Speaker Change #115: Turns on the capital so, but yes look we're also pragmatic and you were still remains burdened by this archaic survey system utilized by Richie recently, which and look we cant again, we'd love them to become very relevant moved to a data driven automated system directly report the true market, but as a result, we hedged the upside.

Speaker Change: Those things and drive a big pickup as well and then just getting full run rate on and performance level back on the acquisitions we've done.

And then also this new Dallas to keep theater business in our containerboard business you put all those elements together and it drives you easily over that $900 million figure.

Speaker Change #115: I mean, our guidance would have no recognition.

Speaker Change #115: And our upside we.

Speaker Change #115: Got a range there we put in a range too.

Speaker Change: Okay, and you mentioned the recent kind of <unk> price increases.

Speaker Change #116: <unk> got to deal with the risky system and.

Speaker Change: And how much of that is in the the $40 70 or is that.

We also have timing issues related to anytime they recognize though.

Speaker Change #117: Look at the <unk>.

Speaker Change: The low and zero in the high end, 100% or something some other mix.

Speaker Change #118: If the dollar linerboard and $80 medium.

Speaker Change #118: We have effective June 1st that's recognized this month that would start to come through the P&L in late July and a 50 and 70 in <unk> effective July 15 to 17, you are be effect of July 18th.

Speaker Change: Yeah.

Speaker Change: We really expect that we should get full recognition of these.

Speaker Change: These price increases their need and deserve the inflationary cost we've had at all of our production and paper gate to gate grades are substantial and we obviously need to earn appropriate returns on capital. So, but yes look we're also pragmatic and you were still remained burdened by this archaic survey system utilized.

Speaker Change #118: That gets recognized timely then we'd start benefiting in late August to September so.

Speaker Change #119: There are some some.

Speaker Change #119: Play a net upside if we got everything immediately when we roll it out then there'd be even more upside.

Speaker Change: By Richie recently, which and look we cant again, we'd love them to become very relevant moved to a data driven automated system directly report the true market, but as a result, we hedged the upside.

Speaker Change #120: And when you think about kind of like the midpoint of what Youre, assuming there if that was the rollover whats the benefit and the 25.

Speaker Change #120: Our perspective of incremental EBITDA.

Speaker Change #120: It will be able to capture.

Speaker Change: Our guidance would have no recognition and our upside we.

Speaker Change #121: Yeah, you know a few if you look at our pricing in general it's just.

Speaker Change: <unk> got a range there we put in a range too.

Speaker Change #122: Say attended at.

Speaker Change #122: $10 change.

Speaker Change: Deal with the risky system and.

Speaker Change #122: In.

Speaker Change #122: We're in my head.

Speaker Change: We also have timing issues related to anytime they recognize though.

Speaker Change #122: Yeah.

Speaker Change #122: Yes.

Look at the.

Speaker Change: <unk> dollar linerboard and $80 medium.

Speaker Change #122: Yeah, 10 dollar impact on.

Speaker Change: We have effective June 1st that's recognized this month that would start to come through the P&L in late July and a 50 and 70 <unk> effective July 15 to 17, you RV effective July 18th if that gets recognized timely then we'd start benefiting in late August to September so yes.

Speaker Change #123: Containerboard is 700000 a month.

Speaker Change #123: So roughly $8 million annually and <unk> half a million a month to $6 million annually. So that should give you the numbers to back into whatever your assumptions would be.

Okay, and then one last one maybe on the capital expenditures that kind of increased.

Speaker Change: That's there are some.

Speaker Change #124: A little bit on the updated guidance.

Speaker Change: Some play a net upside if we got everything immediately when we roll it out then there'd be even more upside.

Speaker Change #125: Maybe break that out is that all iPad cam or are there other growth initiatives that youre spending $20 million.

Speaker Change: And when you think about kind of like the midpoint of what Youre, assuming there if that was the rollover whats the benefit in the 25.

Speaker Change #126: Very little <unk>.

Speaker Change #127: At all.

Speaker Change #128: What it really is is you had some inflationary costs on the down the Dallas, She Peter as a strategic growth project.

Speaker Change: Our perspective of incremental EBITDA.

Speaker Change: You will be able to capture.

Speaker Change: Yes, if you if you look at our pricing in general is just.

Speaker Change #129: That ran that up slightly over but that's at full boat going to generate about $2 million of EBITDA when fully operational so what money well spent and are.

Speaker Change: Say a 10% at.

Speaker Change: $10 change.

Speaker Change: In.

Speaker Change: Where am I at $5 million.

Speaker Change #130: Estimation, and then frankly, we were producing more cash in and some of our engineering group came to US and said Hey look there's some high need safety and maintenance projects that we really think we should pull forward and.

Speaker Change: Yes, 10 dollar impact on.

Speaker Change: Containerboard is 700000 a month.

Speaker Change #130: We didn't want to take the risk of not spending on that kind of thing and since we had the cash capital available we said moving forward.

Speaker Change: So roughly $8 million annually and <unk> half a million a month to $6 million annually. So that should give you the numbers to back into whatever your assumptions would be.

Speaker Change #131: Okay nice quarter. Thank you for taking the questions.

Okay. Thank you as a reminder to ask a question at this time please.

Speaker Change #100: Okay, and then one last one maybe on the capital expenditures that kind of increased.

Speaker Change #132: One line or intestinal telephone.

Speaker Change #101: A little bit on the updated guidance.

Speaker Change #133: Our next question comes from the lineup.

Speaker Change #102: Maybe break that out is that all iPad cam or are there other growth initiatives that youre spending $20 million on.

Wells Fargo: With Wells Fargo. Your line is now open.

Speaker Change #135: Only less.

Hey, Bill good morning.

Speaker Change #103: Very little <unk>.

David: Hey, David.

Speaker Change #137: Housekeeping question on the $8 4 million that you called out.

Speaker Change #104: At all.

Speaker Change #105: What it really is is you had some inflationary costs on that down the Dallas sheet, Peter as a strategic growth projects.

Larry I: Larry was that backed out as a one timer or are you are you flowing that through.

Speaker Change #105: That ramp that up slightly over but thats that full boat going to generate about $2 million of EBITDA when fully operational so what money well spent in our.

Larry I: No it's noncash.

Speaker Change #138: Yeah, we flow it through I mean, it's a county.

Speaker Change #139: The mark to basically sales priced any finished goods inventory, we acquire so head AIPAC cam going forward with it would've been profit, but for us it's not.

Peter: Estimation, and then frankly, we were producing more cash in and some of our engineering group came to US and said Hey look there is some high need safety and maintenance projects that we really think we should pull forward and we didn't want to take the risk of not spending on that kind of thing and since we had the cash capital available we said moving forward.

Speaker Change #140: That's a one year thing now yeah.

Speaker Change #141: Okay and then.

Speaker Change #142: I wanted to ask a question about I guess southeast Asia, or maybe China, specifically if memory serves on the VIP side you guys have.

Speaker Change #143: Four remaining plants there.

Speaker Change #107: Okay nice quarter. Thank you for taking the questions.

But when we look at I Dunno, EV production and all of these different things.

Speaker Change #108: Okay. Thank you as a reminder to ask a question at this time. Please proceed.

Speaker Change #143: It seems like some activity more than others is fairly robust.

Speaker Change #108: One the line Ryan Touchstone telephone.

Speaker Change #109: Our next question comes from the lineup.

Speaker Change #143: And again I know you guys were being selective about customers and what you're doing over there.

Speaker Change #110: With Wells Fargo. Your line is now open.

Lawrence Allen Hilsheimer: Only Larry good morning.

Speaker Change #143: Can you just talk about it.

Speaker Change #111: Hey, David.

Speaker Change #143: The appetite to grow over there.

Speaker Change #112: Housekeeping question on the $8 4 million that you called out.

Speaker Change #143: Or maybe eliminate factors that prevent you from deploying more capital.

Speaker Change #111: Larry.

Speaker Change #113: Backed out as a one timer or are you are you flowing that through I know it is noncash.

Speaker Change #143: In Southeast Asia and in General I know obviously it's.

Speaker Change #143: Returns oriented mindset, but just.

Speaker Change #114: Yeah, we flow it through I mean, it's a county.

Speaker Change #144: Curious about that.

Speaker Change #115: It marked to basically sales priced any finished goods inventory, we acquire so AIPAC cam going forward with it it would have been profit but for us it's not.

Speaker Change #145: Yeah, we have first of all we have a very.

Speaker Change #146: Disciplined approach to the way we.

Speaker Change #147: Deploy cash and as Larry mentioned earlier.

Speaker Change #148: When somebody comes with the request for safety Capex, we never say no.

Speaker Change #116: That's a one year thing now yeah.

Speaker Change #117: Okay and then.

Speaker Change #148: And then we have.

Speaker Change #118: I wanted to.

Speaker Change #119: I ask a question about I guess southeast Asia, or maybe China, specifically if memory serves on the VIP side you guys have.

Speaker Change #148: Our cash machine with so still at work and all the assets and we need to maintain them and we do that and then we have dividends and then after that we then start looking at growth Capex.

Speaker Change #120: Four remaining plants there.

Speaker Change #120: But when we look at I Dunno, EV production and all of these different things.

Speaker Change #148: When we.

Speaker Change #148: We have a.

Speaker Change #148: A periodic review of all of the requests that constant and then we apply filters such as Roy and payback and so on but we also look at the geopolitical aspect of it.

Speaker Change #120: It seems like some activity.

More than others is fairly robust.

Speaker Change #120: And again I know you guys were being selective about customers and what you're doing over there.

Speaker Change #121: Can you just talk about it.

Speaker Change #148: And I would say China is not the country. That's the highest priority in terms of geopolitical aspects. So if there is a choice.

Speaker Change #121: Appetite to grow over there.

Speaker Change #121: Or maybe eliminate factors that prevent you from deploying more capital.

Speaker Change #148: We would we would likely we would likely do it elsewhere, we have invested in maintenance safety and some upgrades for automation in China.

Speaker Change #121: In Southeast Asia in General I know, obviously, it's a.

A returns oriented mindset, but just.

Speaker Change #122: Curious about that.

Speaker Change #149: I'd be remiss to say that we've just built a new <unk> plant in Malaysia. So its modest surrounding reach and we are investing in in terms of APAC. Yes. The same thing I would add gave us as you know AIPAC does have some operations in China whenever we assess any kind of projects.

Speaker Change #123: Yeah, we have first of all we have a very.

Speaker Change #123: Disciplined approach to the way we did.

Speaker Change #124: Deploy cash and as Larry mentioned earlier.

Speaker Change #125: When somebody comes with request for safety Capex, we never say no.

Speaker Change #125: And then we have.

Speaker Change #149: Projects, we always have as already mentioned geopolitical as part of our risk factors now what does that mean mechanically and our capital Decisioning process. It means the hurdle rate for us investing in some place like that is much higher so if it can't meet the hurdle rate when getting it done and then the other thing is part of our.

Speaker Change #125: Our cash machine with so still at work and all the assets and we need to maintain them and we do that then we have dividends and then after that we then start looking at growth Capex.

Speaker Change #125: When we.

We have a.

Speaker Change #125: A periodic review of all of the requests that comes in and then we apply filters such as Roy and payback and so on but we also look at the geopolitical aspect of it.

AIPAC Cam: Enterprise risk management program as we look at those kind of things and we did this in AIPAC Cam you look at what happens if something goes wrong. What's your what's your next plan and so we have plans to deal with anything that they could evolve as best as we would be able to.

Speaker Change #125: And I would say China is not the country. That's the highest priority in terms of geopolitical aspects. So if there is a choice.

Speaker Change #125: We would likely we would likely do it elsewhere, we have invested in maintenance safety and some upgrades for automation in China.

AIPAC Cam: I appreciate that.

Speaker Change #151: One last one.

Speaker Change #151: One last comment on that so.

Speaker Change #151: And we operate in 41 countries across the globe. So we've done that for decades. So.

Speaker Change #126: Just to say that we've just built a new <unk> plant in Malaysia. So its modest surrounding reach and we are investing in in terms of APAC. Yes. The same thing I would add gave us as you know.

Speaker Change #152: What happens on the geopolitical.

Speaker Change #152: On the geopolitical space is really part of our disciplined operating system, but we always focus on that and since we are talking about APAC. We are we do have growth plans in that region and as a result mat lately has been promoted to.

Speaker Change #127: <unk> does have some operations in China, whenever we assess any kind of.

Speaker Change #128: Next we always have as already mentioned geopolitical as part of our risk factors now what does that mean mechanically and our capital Decisioning process. It means the hurdle rate for us investing in someplace like that is much higher so if it can't meet the hurdle rate and getting it done and then the other thing is part of our entered.

Speaker Change #152: Leave that region and he's actually already in place to do that.

Speaker Change #152: Last night.

Speaker Change #153: I haven't heard you guys talk about excuse me.

Speaker Change #154: B C deployment here recently.

Speaker Change #128: Price risk management program as we look at those kind of things and we did this in AIPAC Cam you look at what happens if something goes wrong. What's your what's your next plan and so we have plans to deal with anything that they could evolve as best as we would be able to.

Speaker Change #155: Obviously, the manufacturing backdrop hasn't supported that.

Speaker Change #155: Just curious if that's part of the a little bit of a pick up in Capex.

Speaker Change #155: On the flip side, maybe you have to build out that infrastructure.

Speaker Change #156: I think I understand those lines pretty well, let's say your position to service your customers on the IGT side.

Speaker Change #129: I appreciate that.

Speaker Change #130: One last one.

Speaker Change #157: When demand does in fact.

Speaker Change #130: Just one last one I'll comment on that so.

Speaker Change #157: Black.

Speaker Change #131: In mind, we operate in 41 countries across the globe. So we've done that for decades. So.

Speaker Change #158: I mean, we've continued to expand on our Oh I can see that we're not through acquisition, but primarily organic.

Speaker Change #132: What happens on a geopolitical.

Speaker Change #158: We have deployed blow molded and new lines.

Speaker Change #132: On the geopolitical space is really part of our disciplined operating system, but we always focus on that and since we are talking about APAC.

Speaker Change #158: Throughout last year and also this year and I said then.

Speaker Change #159: In September we will formally opened our new RBC plant in Malaysia.

Speaker Change #132: We do have growth plans in that region and as a result mat lately has been promoted to.

Speaker Change #159: We last year, we opened a new <unk> plant in Turkey, and we have put additional lines in many of the existing facilities.

Speaker Change #132: Leave that region and he is actually already in place to do that.

So this is an area, where we have we've continued to grow and it's also a part of our M&A strategy because its restaurant base. This high margin. So it's a very attractive market for us to grow in and we do that in a request of our customers as well.

Speaker Change #132: Last night.

Speaker Change #133: I haven't heard you guys talk about excuse me.

Speaker Change #133: B C deployment here recently.

Speaker Change #133: Obviously, the manufacturing backdrop hasn't supported that.

Speaker Change #134: I'm just curious if that's part of the a little bit of a tick up in Capex.

Speaker Change #159: They expand they tend to come in and ask if we could provide them to service certain locations and.

Speaker Change #134: And on the flip side, maybe you guys have built out that infrastructure.

Speaker Change #160: He gave you if you'll remember this but just to remind everybody.

Speaker Change #135: I think I understand the line pretty well, let's say your position to service your customers on the IGT side.

We increased our equity ownership of century and last year significantly and we continue to.

Speaker Change #135: When demand does in fact inflect.

Speaker Change #160: Explore opportunities with other Ibs C recyclers around the world most of them are relatively small, but they fill out our footprint and we continue to have dialogues around those in many geographies.

I mean, we've continued to expand on our hour.

Speaker Change #136: I see that we're not through acquisition, but primarily organic.

Speaker Change #136: We have deployed blow molded and new lines in.

Speaker Change #136: Throughout last year and also this year.

Speaker Change #161: Thank you.

Speaker Change #136: In September we will formally opened our new RBC plant in Malaysia.

Speaker Change #160: Okay.

Speaker Change #162: Thank you I will now.

Ross: I will hand, the microphone over to only Ross for closing comments.

Speaker Change #136: We last year, we opened a new IPC plant in Turkey, and we have put additional lines in many of the existing facilities.

only Ross: Thank you before we end the call I just wanted to thank you all for the questions and your continued interest in <unk>. We are very proud of our global <unk> team for utilizing the <unk> business system to its fullest burden, creating significant operating leverage during this temporary sluggish demand environments.

Speaker Change #136: So this is an area, where we have we've continued to grow and it's also part of our M&A strategy because its restaurant base. This high margin. So it's a very attractive market for us to grow in.

Speaker Change #136: We do that in a request of our customers as well that when they expand the central government I'd ask if we could provide them to service certain locations and.

only Ross: We are equally excited to realize the outperformance we have positioned the business to capture.

Speaker Change #136: You'll remember this but just to remind everybody.

Speaker Change #165: Through built to last and we will continue to execute with excellence and provide you with the legendary customer service for which we're known.

Speaker Change #136: We increased our equity ownership of centuri and last year significantly and we continue to.

Thank you to all of our colleagues our customers and stakeholders for your dedication loyalty and commitment to <unk> have a great day.

Speaker Change #136: Explore opportunities with other RBC recyclers around the world most of them are relatively small, but they fill out our footprint.

Speaker Change #166: This concludes today's conference call. Thank you for your participation you may now disconnect.

Speaker Change #136: We continue to have dialogues around those in many geographies.

Speaker Change #137: Thank you.

Speaker Change #137: Okay.

Speaker Change #138: Thank you.

Speaker Change #139: Now I'll hand, the microphone over totally Ross for closing comments.

Ross: Thank you before we end the call I just wanted to thank you all for your questions and your continued interest in <unk>. We are very proud of our global <unk> team for utilizing the greif business system to its fullest burden, creating significant operating leverage during this temporary sluggish demand environments.

Ross: We are equally excited to realize the outperformance we have positioned the business to capture.

Through built to last and we will continue to execute with excellence and provide you with the legendary customer service for which we're known.

Ross: Thank you to all of our colleagues customers and stakeholders for your dedication loyalty and commitment to <unk> have a great day.

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

Ross: [music].

Ross: Okay.

Ross: Great.

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Ross: Good day and thank you for standby welcome.

Greif: Welcome to the Greif second quarter 2024 earnings conference call.

Speaker Change #142: At this time all participants are in a listen only mode.

Speaker Change #142: The speaker's presentation, there will be a question and answer session.

Ask a question during this session you will need to press star one one of your telephone you will then hear an automated message revising your hand is raised.

Speaker Change #142: To withdraw your question. Please press star one again please.

Speaker Change #143: Please be advised that today's conference is being recorded.

Speaker Change #144: I would now like to hand, the contract over to your speaker today build Mafia, Vice President of Investor Relations and corporate development. Please go ahead.

Speaker Change #145: Thank you and good day, everyone welcome to <unk> fiscal second quarter 2024 earnings conference call. During the call today are Chief Executive Officer, <unk>, <unk>, who will provide you with an update on our second quarter results driven by our build to last strategy as well as current business trends, our chief financial.

Speaker Change #146: Sure Larry Hill, Shimer will provide an overview of our financial results and our fiscal full year guidance.

Speaker Change #147: In accordance with regulation fair disclosure. Please ask questions regarding topics you consider important because we are prohibited from discussing material nonpublic information with you on an individual basis. Please turn to slide two.

Speaker Change #148: During today's call, we will make forward looking statements involving plans expectations and beliefs related to future events actual results could differ materially from those discussed. Additionally, we will be referencing certain non-GAAP financial measures and reconciliation to the most directly comparable GAAP metrics.

Speaker Change #149: It can be found in the appendix of today's presentation I'll now turn the presentation over to OLED on slide three thanks, Bill and Hello, everyone and thank you for joining US we are excited to discuss another successful quarter for growth underpinned by solid execution across the business through the greif business system before we do.

Speaker Change #150: Dive into our results I would like to widen our lens and discuss key updates on our build to last strategy, specifically touching on each of our four missions for value creation.

Speaker Change #151: This will help contextualize our continued solid performance despite the persistence and very hits headwinds our business has recently faced as well as why we believe <unk> is positioned for near and long term outperformance.

Speaker Change #151: First I will discuss our creating thriving communities and delivering legendary customer service peer loss through the principles of the service profit chain.

Speaker Change #151: I will then touch on how we protect our future for our customers and our communities Larry will discuss our quarter results and how we ensure financial strength through strategic capital allocation.

Speaker Change #151: As a reminder to all our vision is to be the best performing customer service company in the world.

Speaker Change #151: We consider our primary customers to be our end product customers, our supply chain partners, our colleagues and our financial stakeholders.

Speaker Change #151: Everything we do focuses on improving our service to these customers through dedication to the principles of the service profit chain, which I'll now discuss on slide four.

Speaker Change #151: Our service profit chain has created a competitive advantage for growth through investing in our people. This creates a flywheel.

Speaker Change #151: Our value creation as colleagues are engaged and dedicated to providing legendary customer service.

Speaker Change #151: <unk> recognized the value <unk> delivers from a differentiated product and service standpoint, this culminates and improved customer loyalty and increase share of wallet over time.

Speaker Change #151: Due to our steadfast conviction in the power of this value creation model, we monitor engagement of our colleagues and customers very closely.

Michelle: Net promoter score Michelle our customers' willingness to actively promote on our behalf not simply a passive satisfaction in our products.

Michelle: Our our net promoter score continues to consistently improve with each survey most.

Michelle: Most recent score of 68 completed this April is well above the average across the manufacturing sector of 49, which reflects that our customers' advocate strongly on our behalf.

Michelle: We likewise measure colleague engagement through an independent survey conducted by Gallup.

Michelle: This call Likewise is continuously improves and our most recent results of the 85th percentile puts crises in the top tier of engagement among all manufacturing companies.

Michelle: We are proud to have been awarded the 2020 for exceptional workplace award by Gallup in recognition of our people first culture.

Michelle: What follows from last quarter. When we were named for the second year in a row among newsweek's top 100 global most workplaces.

Michelle: These statistics are meaningful as they demonstrate our people with us on our build to last journey and alongside our Greif business system enabled us which drive our performance each quarter and are fundamentally changing how we operate and deliver results as a company.

Let's now discuss particularly how future on slide five.

And sustainability is ingrained in our culture, our processes systems and relationships with our customers and suppliers.

Speaker Change #153: Our belief is that in order to provide legendary customer service, we must understand the needs of our customers and create solutions alongside them.

Speaker Change #153: This both continuously improves our own sustainability journey, and also improves customer loyalty and share of wallet over time.

Speaker Change #153: This quarter, we released our 15th annual sustainability report, which provides a comprehensive overview of our 2030 targets as well as recent milestones and progress.

Speaker Change #153: Sustainability is another way in which price differentiated suite of service profit chain and has bolstered our profitable growth overtime.

Speaker Change #153: We encourage all our stakeholders to read our latest sustainability report, which is available at <unk> com forward slash sustainability.

Speaker Change #153: Please turn to slide six.

Speaker Change #153: Okay.

Speaker Change #153: This dedication to the service profit chain and its resulting value creation flywheel has enabled us to accelerate our growth and transform our portfolio for the future.

Speaker Change #153: As we announced at our 2022 Investor day and have discussed often since we are pursuing an acquisition strategy to become a global leader in high performance high margin small plastic containers and generic tests.

Speaker Change #153: This product group has an addressable market of over $3 billion and is favorably exposed to secular growth markets, such as flavors and fragrances food and beverage pharma and <unk>.

Speaker Change #153: In March we completed our acquisition of AIPAC, Kim and in doing so have now solidified the global platform that we committed to growing within the high performance portion of that $3 billion addressable markets.

Speaker Change #153: Integration integration is going well and we are confident in our ability to capture the $7 million of synergies as previously communicated.

Speaker Change #153: As a reminder, the <unk>.

Speaker Change #153: Primary synergy opportunities.

Speaker Change #153: In the form of raw materials scale advantage and expected and planned elimination of executive leadership overlap both of which are already largely ineffective.

Speaker Change #153: We are extremely pleased with our investments and value creation underway. However, I'll also note that given recent short term softness in the global equity markets. Our revised fiscal 'twenty four guidance reflects an expectation of smaller contribution for the six months of ownership in fiscal 2012.

Speaker Change #153: And then previously commuted communicated run rates.

Speaker Change #153: Additionally earnings for fiscal year, 'twenty, four will be impacted by a one time expected $8 4 million inventory revaluation expense approximately $6 7 million of which was included in the second quarter results.

Speaker Change #153: This combined operating.

Speaker Change #153: The combined operating expertise of our price and legacy <unk> colleagues working together over the past 60 days has.

Speaker Change #153: As further strengthened our conviction in the solid organic growth fundamentals of the business as well as long term earnings power our capital we have invested in the small plastic and European markets.

Speaker Change #154: Please turn to slide seven as we shift gears to the quarter and a discussion of our recent operating environments.

Speaker Change #154: In the past three months, we have seen a continuation of the same mixed demand trends as in recent quarters.

Speaker Change #154: APAC, which as a reminder is approximately 5% of total company net sales were showing.

Speaker Change #154: Demand signals in Q1, however, in Q2 trends reversed after the mark after the market strong demand expectations for Chinese new year fell short of expectations and a quick but significant destocking occurred.

Speaker Change #154: That lower level of demand has thus far persisted into Q3 in EMEA gripes largest CIP market positive demand trends have continued for the second quarter in a row with growth coming broadly across end markets, but notably in chemical and lubricant demand.

Speaker Change #154: In the Americas, Latam was flat year over year with mixed demand. However, we are encouraged that Latam saw the same growth in chemical markets as EMEA, despite slower demand from axiom.

Speaker Change #154: North America, Likewise remains mixed but has improved overall on a sequential basis.

Speaker Change #154: Overall chemical demand remains weak in that region. We anticipate continued sequential demand improvement in Q3 in North America, as well as Latam and EMEA, which is reflected in our revised guidance.

Speaker Change #154: We will be monitoring monitoring our key end markets closely and responding to real time demand changes to ensure we fully capture opportunities as they present themselves.

Speaker Change #154: Lastly, our North American paper business continues to slow, but steady improvement in container board driven by our bulk box business with feeds into ecommerce channels offset by softer although sequentially improving coupon core demands driven by stronger construction and film called <unk>.

Speaker Change #154: We also expect this modest improvement trend to continue.

Speaker Change #154: In May we saw that continuation with our paper business showing modest improvement led by construction and film demands and <unk> and anticipate continued improvements in containerboard driven by the opening of our Dallas sheet feeder.

Speaker Change #155: EMEA North America, and Latam All show sequential improvement over April with APAC demand mixed with slower China demand and stronger southeast Asia demands.

Speaker Change #156: Overall, we're talking to our customers based generally positive. However, it remains coupled with our customers, indicating continued short visibility so they own demands, resulting in uncertainty to the duration of this improving demand trends for that reason we are continuing to.

Speaker Change #156: Be prudent on cost management, while also monitoring end markets closely for more clearly defined science of improvements and with that I'll now turn it over to Larry to walk you through our detailed financial results on slide eight.

Larry: Thank you Julie and thank you all for joining our call.

Larry: Our second quarter results reflect improving but still weak demand and the extremely challenging price cost dynamic in our paper business, resulting in $170 million of adjusted EBITDA $59 million of free cash flow.

Larry: And adjusted EPS of <unk> 82 per share.

As already mentioned, we are leaning on the greif business system to serve our customers with excellence manage cost and diligently monitor our business for signs of an inflection.

Speaker Change #157: The great business system champions for continuous improvement accelerates plant modernization and automation as well as creates value through gamba and six Sigma programs. Using these tools, we continue to drive structural cost out and build productivity gains that not only help optimize our current business, but also provides the foundation to.

Speaker Change #157: Accelerate integration and synergy capture as we grow through acquisitions.

Speaker Change #157: While managing the present, we are also growing for the future through the <unk> acquisition and through high value capital projects, such as our recently opened Dallas sheet Theater.

Speaker Change #157: These investments are critical to our long term vision and strategy and will position us well for outperformance once markets return to a normalized state.

Speaker Change #157: We are re in stating a guidance range given our confidence in our view of the remainder of our fiscal year. We are pleased to raise the low end from our prior $610 million to $675 million and at a high end of 600 $725 million.

Speaker Change #158: Before discussing guidance assumptions, let me provide a segment performance update starting on slide nine.

Speaker Change #158: For GIC, continuing weak, but improving demand led to a year over year sales decline of $57 million and margin compression of one 5% year over year. In addition, SG&A costs were up year over year in line with our expectations communicated in our Q4 call. This is primarily a result of.

Speaker Change #158: DNA step up on new acquisitions, as well as our ongoing strategic investments in it.

Speaker Change #158: And global operating excellence, which while expense we view as strategic capital we are investing for long term margin improvement despite.

Speaker Change #158: Despite the incremental cost of these investments margins rallied strongly by over four 4% on a sequential basis from fiscal Q1, 'twenty 'twenty four.

Speaker Change #158: It is only touched on EMEA continued to improve underpinned by strong lube and chemical markets. The Americas remained flat to down as lube and chemical demand improvements has not yet been seen however, North America has seen overall sequential improvement and we do anticipate that recovery to continue into the second half of our fish.

Speaker Change #158: Full year.

Please turn to slide 10 for our PPS results.

Speaker Change #158: We continued delayed recognition of announced pricing increases combined with the rising OCC costs has led to a significant margin compression of over 10% Despite flat sales.

Speaker Change #158: Our PPS team is continuing to manage controllable as well, including successful price increase implementation on our non index based customers.

Speaker Change #158: However, the outsized impact of the index, driven price cost dynamic, which we still view to not be in sync with real market trends is a headwind we have and will continue to aggressively work to offset on the volume side in containerboard, we are seeing modest improvement, while the tube and core end markets remain flat to down.

Speaker Change #158: While managing the present, we are also continuing to invest in the future within this product group, resulting in SG&A cost inflation for similar strategic initiatives as discussed with GIC. Please.

Please turn to slide 11 for our updated guidance and outlook.

Speaker Change #159: As previously stated we are providing a guidance EBITDA range of $675 to $725 million, reflecting an increase of $65 million on the low end.

Speaker Change #159: High end of our guidance range reflects recognition of our announced paper price increases as well as continued margin improvement in VIP.

Speaker Change #159: By contrast, the low end of our guidance range assumes no paper price recognition.

Speaker Change #159: Slight further OCC cost inflation and no margin improvement in <unk> on the volume side, our guidance change of 22% to $62 million of EBITDA assumes further contribution of the improving volume trends across most of our products and end markets as already mentioned earlier are incremental.

Speaker Change #160: EBIT contribution from AIPAC Cam is less than previously disclosed run rate due to a full year impact of purchase accounting of $8 $4 million as well as short term slowest slowness in the global AG markets.

Speaker Change #160: Lastly, we anticipate volume related as well as inflationary transport and manufacturing headwinds of 19% to 39 million of EBITDA relative to prior guidance.

Speaker Change #161: As for free cash flow, we are leaving our previous guidance unchanged as our midpoint at $200 million for the full year, we anticipate that the increase in our EBIT guidance midpoint of $90 million will not result in incremental cash flow within fiscal 'twenty for the drivers of this are at the mid point higher.

Speaker Change #161: Spend on strategic Capex and efficiency related maintenance projects were 20 million higher cash interest primarily related to the acquisition of Aipac's.

Speaker Change #161: $25 million higher cash taxes of $26 million related to improved earnings as well as the failure of Congress to extend favorable tax provisions higher working capital needs to address in roofing demand of $32 million, partially offset by a favorable $13 million of other miscellaneous cash items.

Speaker Change #161: Yes.

Speaker Change #162: As already mentioned in his remarks, while we continue to monitor our business near term. It is critical we also maintain a long term land and invest for the future as such I would like to discuss capital allocation on slide 12.

Speaker Change #163: Under build to last which we define as fiscal 'twenty two through present, we have deployed over $2 6 billion of capital our capital allocation framework is simple we first invest in two non negotiable are safety and maintenance Capex, which keeps our cash machine running and our regular and increasing dividend while.

Speaker Change #164: While critical these users are not a significant portion of total cash generated in that same timeframe and so the rest we devoted towards growing our business and increasing shareholder return on the gross side. The recent majority has come through developing the leading global small plastics platform, which fully discussed in his remarks, the long term.

Speaker Change #164: <unk> of this business are substantial and we are encouraged by our successful execution of the transactions our integration progress in synergy realization, we balanced growth with debt reduction at times when it is necessary to temporarily increase our leverage above our long term target of leverage ratio in the range of two to two five times.

Speaker Change #164: In order to capitalize on long term value accretive growth opportunities such as <unk>.

Speaker Change #165: Given our current leverage we anticipate in the short term prioritizing incremental debt reduction we are confident in the value creation benefits of our capital deployment under build to last and we will plan to dive deeper into this topic at our upcoming Investor day in December with that I'll turn things back to <unk> for closing closing on slide 13.

Speaker Change #165: Alright. Thank you Larry I appreciate each of you taking the time to listen to my opening remarks on our strategy.

Speaker Change #166: But I clearly communicated the value creation, which is occurring through leveraging what we do best customer service to drive growth and transform our business and our recent capital investments and internal initiatives are setting the stage for the next wave of accelerated growth at <unk>, our bright business system.

Speaker Change #166: And the vacation to the service profit chain have combined to create a flywheel of success, which is driving growth and our disciplined capital allocation framework.

Speaker Change #166: We have an investor day upcoming this December and plan to discuss in greater detail. The changes. We are currently making through the greif business system to transform our organization for breakout success.

Speaker Change #167: Operator will you. Please open the lines for Q&A.

Speaker Change #168: Thank you.

Speaker Change #169: Reminder, to ask a question. Please press star one one of your telephone away for your name to be announced.

Speaker Change #169: To withdraw your question. Please press star one again.

Speaker Change #170: Our first question comes from the line of Ghansham Panjabi with Baird. Your line is now open.

Speaker Change #170: Hi. Good morning. This is this is Matt krueger sitting in for Ghansham, how is everybody doing today.

Great.

Speaker Change #170: Wonderful.

Speaker Change #170: So I guess I just wanted to start off with a quick question on volumes can you provide some added detail on the volume cadence across both business segments. During the quarter and then just some early thoughts on how the third fiscal quarter has kicked off would be really helpful as well.

Speaker Change #171: Yeah, Let me, let me give you some comments that maybe sort of a <unk>.

Speaker Change #172: I'll first and give you kind of a regional overview year on year and then we can go into substrates and I'll make some comments on <unk>.

Speaker Change #172: On the end markets.

Speaker Change #172: So if you look at it recently saw the strongest markets was EMEA, where we saw an 8% growth.

Speaker Change #172: And its also our largest <unk> markets Latam was flat, we were little bit weaker North America minus 5% and.

Speaker Change #172: And we were down 11% in APAC.

Speaker Change #172: The broad improvement we saw in EMEA was across our industrial end markets for the second straight quarter.

Speaker Change #172: Mostly in bulk chemicals and loops.

Speaker Change #172: In Latam, we saw pockets of strength in both in bulk chemical in paints and coatings and as I mentioned, we had some softness in <unk>. We've seen most other places and again in North America.

Speaker Change #172: We see continued slow bulk.

Speaker Change #172: Commodity developments and Atkins demand is down but sequentially from Q1, we do see improvements.

Speaker Change #172: Hence I made some comments earlier on APAC Q2 volumes were negative impacted by seasonality from the Chinese new year and weaker demand from food and Bev.

If we look at soft rates year on year, the strongest Australia.

Speaker Change #173: <unk> was plastic and what we have invested in RBC and we are off low teens year on year steel.

Speaker Change #173: Steel is flat, but it's actually improving up to 10% sequentially.

Speaker Change #173: And we are down low singles in fiber, but we are improving again sequentially and it's up 10%.

Speaker Change #173: As I said at the end markets saw really bulk chemicals lubricants, where we see.

Speaker Change #173: Strong developments.

Speaker Change #173: If we look at also the economic indicators of the global PMI was above 50 for the last four months, including made which is positive.

Speaker Change #173: And which is reflected in these positive signals that we've seen exiting.

Speaker Change #173: Okay.

Speaker Change #173: It makes us very positive for the future.

Speaker Change #173: We stake.

Speaker Change #173: Thank you to our customers our supply chain partners.

Speaker Change #173: As demand hopefully keeps increasing we will react quickly.

Speaker Change #173: Like we have done in EMEA.

Speaker Change #174: Okay, Great. That's very helpful. And then just a follow up I wanted to touch on price cost a bit can you provide an updated view on the absolute price cost expectation for the year. If you could provide some detail on how that how that would how that performed this quarter and what you would expect from the App.

Speaker Change #174: Coming two quarters that'd be helpful as well.

Speaker Change #174: Like we could be reaching kind of a peak price cost pain point across your business given the the pricing initiatives you have in the market I just wanted to check the validity of that statement.

Yes, that's a great question Larry.

Gerrick: Gerrick Whatsapp answer that yeah, I mean, if you look I mean clearly.

Speaker Change #176: As we looked at.

Speaker Change #177: What price cost, we had relative to Q Q2 'twenty three.

Gerrick: Major impact year over year price cost squeeze of about $49 million in paper and in about 20.

Speaker Change #177: But.

Speaker Change #177: Positive 17 out actually in Gi P. So, yes $12 million of volume benefit in Gi.

Speaker Change #178: CIP and $27 million volume benefit and PPS, so trends on volumes good price cost squeeze very harmful to us.

Speaker Change #179: Then looking at going from our.

Speaker Change #179: Gil.

Speaker Change #179: Prior to our former guidance to current guidance.

Speaker Change #179: Yeah, we we show.

Speaker Change #179: From that <unk> 10, low end that we gave.

Actually your price cost benefit in our Gis business.

Speaker Change #180: Of about <unk>.

Speaker Change #181: $39 million and volume of 27.

Speaker Change #181: Within PPS.

Speaker Change #182: Midpoint $29 million Army, I'm, sorry, $16 million price cost lift.

Speaker Change #182: From prior where we were in 15.

Speaker Change #182: If I'm going from prior year to where we are now youre obvious squeeze numbers on <unk>.

Speaker Change #182: From the $8 19 of last year to $700 million of debt this year within the PPS business.

Speaker Change #182: Major squeeze clearly on OCC or roughly 90 $500 million.

Speaker Change #182: You are be at $5 million of pressure and containerboard about about flat.

Speaker Change #182: And then in our Gis business.

Speaker Change #183: Price and cost about $59 million positive volume about $30 million positive. So hopefully that's what you were looking for Matt.

Speaker Change #184: No. That's very helpful. That's it for me. Thank you.

Pat: Thanks Pat.

Speaker Change #185: Our next question comes from the line of George Staphos with Bank of America Securities. Your line is now open.

George Leon Staphos: Hi, everyone. Good morning, Thanks for the details.

George Leon Staphos: I wanted to go to and congratulations on the quarter I wanted to go to slide 11, where you have the waterfall.

George Leon Staphos: Yes.

Speaker Change #186: And Larry if we look at and only if we look at the volume.

Speaker Change #186: Pick up in your guidance.

Speaker Change #186: Recognizing.

Speaker Change #187: There are no guarantees in life things could move more positively thanks to move more negatively.

Speaker Change #188: Or are you right now in terms of that 22% to 62 million would you say roughly in terms of the volume pick up that in turn.

Speaker Change #188: Informed your improvement in your guidance.

George Leon Staphos: Yes, I would say George.

Speaker Change #189: Where we're at in a trend right now is bright smack in the middle of that and so what we did build a range around it based on as already mentioned in his comments.

There is still some nervousness in our in our some of our customers, but theres also some areas where we're seeing there is potential optimism. So we just we build a range around what we thought was possible for the rest of the year.

Speaker Change #190: Larry <unk>.

Speaker Change #191: Probably missed this early I probably missed this but if you could.

Speaker Change #192: Either by end market or by substrate, maybe both could you just give us kind of a quick where are you year on year early in fiscal <unk> Q.

Speaker Change #193: In terms of trends Youre seeing at the moment on volume.

Speaker Change #194: Do you mean.

Speaker Change #194: Yes.

Speaker Change #195: I mean those kits.

Speaker Change #194: Hum.

Speaker Change #196: <unk>, yes.

Speaker Change #196: So excellent trends in may that will generate positive jaws.

Speaker Change #196: Steel and container board they kept improving throughout Q2.

Speaker Change #196: Plastic <unk> was a bit more mixed on a month to month basis during the quarter.

Speaker Change #196: But if we look at Gi Pete and then EMEA.

Speaker Change #196: They remained sequentially strongest.

Speaker Change #196: As I mentioned.

Speaker Change #196: But also with North America, and Latam improving.

Speaker Change #196: Containerboard continued to improve and we will soon start benefiting form out balance sheet feeder, which by the way is operational and is producing.

Speaker Change #196: Ashish, that's being sold and in <unk>, we continue to see construction on film demand increasing in May.

Speaker Change #196: Despite the mixed demand in auto end markets.

Speaker Change #196: Okay.

Speaker Change #197: My last two and I'll turn it over just if you could give us a bit more color or remind us. What you said in terms of year on year total in paper it sounded like containerboard was alright, not gangbusters, but up.

Speaker Change #198: Honestly year on year sequentially, Cuban core Europe be was getting better but still down.

Speaker Change #199: You can sort of affirm that and disc.

Speaker Change #200: Discuss what Youre seeing early in May there and then what kind of price cost should we expect out of steel and VIP in particular, the rest of the year do you have improving or sequentially decelerating benefits there. Thank you.

Speaker Change #201: Yes, so on steel that will generally keep improving and ill maybe touch upon that a little bit later on what we're doing internally at self help.

Speaker Change #202: In Juba coal as I mentioned.

Speaker Change #202: Film costs.

Speaker Change #202: Two the source construction, where we see I wish it by the way is our biggest segment is paper costs.

Speaker Change #202: We haven't really seen any major recovery of that.

Speaker Change #202: Once we are doing well in paper costs, we also selling tool.

Speaker Change #202: The paper companies, we haven't seen a pick up there yet but.

Speaker Change #202: But we hopefully we won't see that soon.

Speaker Change #203: Thank you so much.

Speaker Change #204: Thank you.

Speaker Change #205: Our next question comes from the line of Mike Roslyn with <unk> Securities. Your line is now open.

Speaker Change #206: Thank you Lorie and bill for taking my questions.

Speaker Change #205: Yes.

Speaker Change #207: First question I just had on slide 11, I think Larry if I heard you correctly you mentioned there.

Michael Hoffman: $19 million to $39 million of manufacturing headwinds.

That's new.

Michael Hoffman: What's driving that.

Larry: The predominant driver of that is volume so with volume pickup yet more incremental transport cost and then a little bit of.

Larry: Additional manufacturing costs, just volume driven.

Speaker Change #209: Got you perfect. Thank you for that.

Speaker Change #209: So just can you talk about.

Speaker Change #210: The operating leverage in the business that could be relief, maybe once global volume start to normalize and you say, yes, you're certainly early stages depending on region.

Speaker Change #211: Servicing the volume improvement.

Once everything let's say is firing all cylinders, what's what's this type of operating leverage that could potentially be released positively impact the business.

Speaker Change #211: Yes.

Speaker Change #211: Office.

Speaker Change #211: Basically is there.

Speaker Change #211: As volume picks up.

Speaker Change #211: Predominant phosphagen ended up occurring in court and addition of transport is.

Speaker Change #211: The raw material cost, but your value add is going to be about 50%, but I would say generally just assume excess of 20% gross margin pickup on incremental volume and if you look back.

Speaker Change #211: We get a return to 22 volume levels, we would end up being.

Speaker Change #212: Picking up about $160 million of EBITDA and that doesn't even factor in the incremental EBITDA from getting to full run rate on all of our acquisitions and getting back on price cost, where we need to be on paper. So yes, we see a path back with <unk>.

Speaker Change #212: Economic conditions to well over $900 million of EBITDA. Let me also just talks on our initiatives are internal initiatives on cost savings.

Speaker Change #212: The impact of our business systems. So we operating at a high level and we are always looking for what we call internally aggregation of muscle gains across our 250 locations.

Speaker Change #212: Our sourcing team as an example recently finalized the targeted review in North America, which in a particular area, which will reduce total spend for this area by an estimated 8%.

Speaker Change #212: They also did a recent view of certain global indirect material spend.

Speaker Change #212: The solid and an estimated one way cost savings of 5%.

Speaker Change #212: We also recently conducted as an example to full scope steel plant operational excellence reviews.

Speaker Change #212: Which by.

Speaker Change #212: These plans were previously underperforming our expectations and these reviews. They include a full value stream mapping and lean six Sigma review and by focusing on raw material usage and reducing scrap each of these two plants have seen a sustained EBITDA margin increase of approximately 800 bps.

Speaker Change #212: Relative to their client performance.

Speaker Change #212: I visited the plant recently, who have who have over the past few years made a significant improvement on their NPS and gallops cost and when you look at the profitability trends for that plant it correlates extremely well.

Speaker Change #212: And.

Speaker Change #213: With these things in their plant performance is top tier so the aggregation of these types of module gains. They are a big part of our improved structural margin profiles. So we are truly playing on the entire P&L as you can.

Speaker Change #213: Spanning from operational and commercial excellence initiatives supply chain and sourcing anthem.

Speaker Change #214: She also mentioned that our automation efforts, which is reflected in our earnings.

Speaker Change #215: Thank you all for a quick follow up how many of your facilities could be subject to those types of reviews I mean, how much further runway do you have in terms of improving.

Speaker Change #216: Level profitability like that.

Speaker Change #217: To be honest with you.

Speaker Change #216: Sure.

Speaker Change #218: Previously I thought okay, there must be a limit somewhere but I keep getting surprised we have a we have a game that we have a six Sigma program and just to give you an idea of the size of our six Sigma program.

Speaker Change #219: We have nearly 700 petition participants across the globe.

Speaker Change #220: To date, we have 400 white balance 170, <unk> hundred 30, Green belts, and we have 10 black belts.

Speaker Change #220: And they all have projects of a certain magnitude driving savings to the bottom line and when you look at that we have.

Speaker Change #220: Deploy this.

Speaker Change #220: 250 plants, the things IC alignment meant to some of them the things I see the surprises me, hey, could we really find that sort of savings there.

Speaker Change #220: <unk>.

Speaker Change #221: And youre looking at years and years of runway on these initiatives.

Speaker Change #221: You can say, okay, you find like 300000 here 700000 their book when you added up.

Speaker Change #221: And then that's why we call it aggregation of modular games it becomes big numbers over time.

Speaker Change #222: Understood. Thanks, very much for the color.

Speaker Change #222: Yes.

Speaker Change #223: Thank you.

Speaker Change #224: Our next question comes from the line of Brian Butler with Stifel. Your line is now open.

Brian Butler: Hey, good morning, Thank you very much for taking the questions.

Speaker Change #225: Hey, Brian.

Speaker Change #226: You talked about getting to that 900 million EBITDA.

Brian Butler: I was hoping you can maybe just talk about maybe high level what are those components that get you there and just kind of walk through it the price cost volume and if theres anything else.

From the <unk>.

Brian Butler: Yes.

Speaker Change #227: May be the single largest component of that is just getting back to volume levels of 'twenty two.

Speaker Change #227: And that alone is a $160 million driver at current margin rates.

Speaker Change #228: We look good on a little bit on volume recovery sequentially, but you look on a two year stack volumes are still significantly off and obviously, that's evidenced in the economic data with PMI statistics and everything else. So.

Speaker Change #228: Getting back to that kind of volume level drives a huge amount of earnings lift for us and so as already mentioned, we undertake all of these operational improvement areas to really change our structural cost drivers. So that we can even tweak that more than cover other inflationary costs.

Speaker Change #228: The secondary element is clear.

Clearly getting back to what we consider.

Speaker Change #228: Much needed well deserved and.

Speaker Change #228: Price cost in our paper business as evidenced by the price increases we recently announced.

Speaker Change #228: And those things and drive a big pickup as well and then just getting full run rate on and performance level back on the acquisitions we've done.

Speaker Change #228: And then also this new Dallas to keep Peter business in our containerboard business you put all those elements together and it drives you easily over that 900 million dollar figure.

Speaker Change #229: Okay, and you mentioned the recent kind of <unk> price increases.

Speaker Change #230: And how much of that is in the the 40 bps 70 or is that.

Speaker Change #231: The low and zero in the high end, 100% or some some other mix.

Speaker Change #231: We really expect that we should get full recognition of these these price increases are needed and deserved the inflationary costs. We've had at all of our production and pay per gate to gate grades are substantial and we obviously need to earn an appropriate return.

Speaker Change #232: Turns on the capital so, but yes look we're also pragmatic and you were still remained burdened by this archaic survey system utilized by Richie recently, which and look we cant again, we'd love them to become very relevant moved to a data driven automated system directly report the true market, but as a result, we hedged the upside.

Speaker Change #231: <unk>.

Speaker Change #233: Our guidance would have no recognition.

Speaker Change #233: And our upside we.

Speaker Change #233: Got a range there, yes, we've put in a range too.

Speaker Change #234: You had to deal with the risky system and.

Speaker Change #234: We also have timing issues related to anytime that recognize though.

Speaker Change #234: Look at the <unk>.

Speaker Change #234: <unk> dollar linerboard and $80 medium.

Speaker Change #234: We have effective June 1st that's recognized.

Speaker Change #234: But they would start to come through the P&L in late July and a 50 and 70 <unk> effective July 50 to 70 <unk> effective July 18th if that gets recognized timely then we would start benefiting in late August to September so.

Speaker Change #234: There are some.

Speaker Change #234: Some play a net upside if we got everything immediately when we roll it out then there'd be even more upside.

Speaker Change #235: And when you think about kind of like the midpoint of what Youre, assuming there if that was the rollover whats the benefit and the 25.

Speaker Change #235: Our perspective of incremental EBITDA.

Speaker Change #235: It will be able to capture.

Speaker Change #235: Yes.

Speaker Change #236: If you look at our pricing in general is just.

Speaker Change #236: Say attended at 10.

Speaker Change #237: $10 change.

Speaker Change #237: In.

Speaker Change #238: Where am I at fine.

Speaker Change #238: Yes, 10 dollar impact on.

Containerboard is 700000, a month, yes, so roughly $8 million annually <unk> half a million a month to $6 million annually. So that should give you the numbers back into whatever your assumptions would be.

Speaker Change #239: Okay, and then one last one maybe on the capital expenditures that kind of increased a.

Speaker Change #240: A little bit on the updated guidance.

Speaker Change #241: Maybe break that out is that all AIPAC cam or are there other growth initiatives that youre spending $20 million on.

Very little <unk>.

Speaker Change #242: At all.

Speaker Change #243: What it really is is you had some inflationary costs down the Dallas sheet, Peter is strategic growth projects.

Speaker Change #243: That ran that up slightly over but thats that yet full boat going to generate about $2 million of EBITDA when fully operational so money well spent and are.

Speaker Change #244: Estimation, and then frankly, we were producing more cash in and some of our engineering group came to US and said Hey look there's some high need safety and maintenance projects that we really think we should pull forward and we didn't want to take the risk of not spending on that kind of thing and since we had the cash capital available we said moving forward.

Speaker Change #244: Okay.

Speaker Change #245: Okay nice quarter. Thank you for taking the questions.

Speaker Change #246: Thank you okay. Thank you as a reminder to ask a question at this time. Please press star one the line oriented telephone.

Speaker Change #246: Our next question comes from the line of Jay.

Speaker Change #247: <unk> with Wells Fargo. Your line is now open.

Speaker Change #248: Only Larry Bill good morning.

David: Hi, David.

Speaker Change #250: Housekeeping question on the $8 4 million that you called out.

Speaker Change #250: Larry.

Larry: Backed out as a one timer or are you are you flowing that through I know it's noncash.

David: Yes, we flow it through I mean, it's a county.

Speaker Change #251: Mark to basically sales priced any finished goods inventory, we acquire so head AIPAC cam going forward with it it would have been profit but for us it's not.

Speaker Change #251: That's a one year thing now yeah.

Speaker Change #251: Okay and then.

Speaker Change #252: I wanted to.

Speaker Change #253: I ask a question about I guess southeast Asia, or maybe China, specifically if memory serves on the VIP side you guys have.

Speaker Change #254: Four remaining plants there.

Speaker Change #254: But when we look at I don't know EV production and all of these different things.

Speaker Change #254: It seems like some activity.

Speaker Change #255: More than others is fairly robust.

Speaker Change #255: And again I know you guys were being selective about customers and what you're doing over there.

Speaker Change #256: Can you just talk about it.

Speaker Change #256: Appetite to grow over there or maybe eliminate factors that prevent you from deploying more capital.

Speaker Change #256: In Southeast Asia in General I know, obviously, it's a returns oriented mindset, but just curious.

Speaker Change #256: Curious about that.

Speaker Change #257: Yeah, we have first of all we have a very.

Speaker Change #257: Disciplined approach to the way we did.

Speaker Change #258: Deploy cash and as Larry mentioned earlier.

Speaker Change #259: When somebody comes with request for safety Capex, we never say no.

Speaker Change #259: And then we have Oh.

Speaker Change #259: Our cash machine with solid steel edberg odd assets, and we need to maintain them and we do that and then we have dividends and then after that we then start looking at growth Capex.

Speaker Change #259: When we.

Speaker Change #259: We have a.

Speaker Change #259: A periodic review of all of the requests that comes in and then we apply films such as Iwai and payback and so on but we also look at the geopolitical aspect of it.

Speaker Change #259: And I would say China is not a country that has the highest priority in terms of geopolitical aspects. So if there is a choice.

Speaker Change #259: We would likely we would likely do it elsewhere, we have invested in maintenance safety and some upgrades for automation in China.

Speaker Change #260: I would be remiss to say that we've just built a new IPC plant in Malaysia. So its modest surrounding reach and we are investing in in terms of APAC. Yes. The same thing I would add gave us.

Speaker Change #260: APAC does have some operations in China, whenever we assess any kind of.

Speaker Change #261: Projects, we always have as already mentioned geopolitical as part of our risk factors now what does that mean mechanically and our capital Decisioning process. It means the hurdle rate for us investing in someplace like that is much higher so if they can't meet the hurdle rate and getting it done and then the other thing is part of our.

Speaker Change #261: Enterprise risk management program as we look at those kind of things and we did this in AIPAC Cam you look at what happens if something goes wrong. What's your what's your next plan and so we have plans to deal with anything that they could evolve as best as we would be able to.

Speaker Change #261: Okay.

Speaker Change #262: I appreciate that.

Speaker Change #263: One last one.

Speaker Change #264: Just one last one I'll comment on that so.

Speaker Change #264: And we operate in 41 countries across the globe. So we've done that for decades. So.

Speaker Change #265: What happens on a geopolitical.

Speaker Change #265: On the geopolitical space is really part of our disciplined operating system, where we always focus on that and since we are talking about APAC.

Speaker Change #266: We do have growth plans in that region and as a result, <unk> has been promoted to.

Speaker Change #266: Leave that region and he is actually already in place to do that.

Speaker Change #266: Last night.

Speaker Change #267: I haven't heard you guys talk about excuse me.

Speaker Change #268: <unk> deployment here recently.

Speaker Change #269: Obviously, the manufacturing backdrop hasn't supported that.

I'm just curious if that's part of the a little bit of a tick up in Capex.

Speaker Change #270: And on the flip side, maybe you got to build out that infrastructure.

Speaker Change #271: I think I understand the line pretty well, let's say your position to service your customers on the IGT side.

Speaker Change #271: When demand does in fact inflect.

Speaker Change #272: I mean, we have will continue to expand on our.

Speaker Change #273: I see that we're not through acquisition, but primarily organic.

Speaker Change #273: We have deployed blow molded and new lines in.

Speaker Change #273: Throughout <unk>.

Speaker Change #273: Last year and also this year and I said in.

Speaker Change #274: In September we will formally opened our new RBC plant in Malaysia.

Speaker Change #274: We last year, we opened a new IPC plant in Turkey, and we have put additional lines in many of the existing facilities.

Speaker Change #274: So this is an area, where we have we've continued to grow and it's also part of our M&A strategy because its restaurant base. This high margin. So it's a very attractive market for us to grow in.

Speaker Change #274: We do that at request of our customers as well.

Speaker Change #275: They expand the central common I'd ask if we could provide them the service certain locations and gave you if you'll remember this but just to remind everybody. We increased our equity ownership of centuri and last year significantly and we continue to.

Speaker Change #276: Explore opportunities with other RBC recyclers around the world most of them are relatively small, but they fill out our footprint.

Speaker Change #277: And we continue to have dialogues around those in many geographies.

Speaker Change #278: Thank you.

Speaker Change #278: Now I'll hand, the microphone over totally Ross for closing comments.

Ross: Thank you before we end the call I just wanted to thank you all for the questions and your continued interest in <unk>. We are very proud of our global <unk> team for utilizing the greif business system to its fullest as you've heard in creating significant operating leverage during this temporary sluggish demand environments.

Ross: We are equally excited to realize the outperformance we have positioned the business to capture.

Ross: Through built to last and we will continue to execute with excellence and provide you with a legendary customer service for which we're known.

Ross: Thank you to all of our colleagues our customers and stakeholders for your dedication loyalty and commitment to <unk> have a great day.

Speaker Change #279: This concludes today's conference call. Thank you for your participation you may now disconnect.

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