Q2 2025 Greif Inc Earnings Call

Operator: Good day and thank you for standing by.

Yeah.

Speaker Change: Good day and thank you for standing by welcome to the Great second quarter 2025 earnings call. At this time all participants are in a listen only mode. After the speaker's presentation. There will be a question and answer session to ask a question. During the session you will need to press star one on your telephone.

Operator: Welcome to the Greif Second Quarter 2025 Earnings Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session.

Operator: To ask a question during the session, you will need to press star 11 on your telephone. You will then hear an automated message advising that your hand is raised. To withdraw your question, please press star 11 again.

You will then hear an automated message if I can get your hands raised.

Speaker Change: Draw. Your question. Please press Star one again, please be advised that today's conference is being recorded I would now like to hand, the call over to your speaker today building off Rio VP of Investor Relations and corporate development. Please begin.

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

Bill DOnofrio: I would now like to hand the call over to your speaker today, Bill Donofrio, VP of Investor Relations and Corporate Development. Please begin. Thank you and good day, everyone.

Speaker Change: Thank you and good day, everyone and welcome to <unk> fiscal second quarter 2025 earnings Conference call.

Bill DOnofrio: Welcome to Greif's fiscal second quarter 2025 earnings conference call. Today, our CEO, Ole Rosgaard, will begin with an update on our colleague and customer engagement, as well as progress on our cost optimization commitment. He will then discuss key global market trends.

Speaker Change: Our CEO Ali Ross Guard.

Larry: With an update on our colleague and customer engagement as well as progress on our cost optimization commitment. He will then discuss key global market trends, our CFO, Larry <unk> will walk through second quarter financial results and 2025 guidance. Please turn to slide two.

Bill DOnofrio: Our CFO, Larry Hilsheimer, will walk through second quarter financial results and 2025 guidance. Please turn the slide.

Bill DOnofrio: In accordance with Regulation Fair Disclosure, please ask questions regarding topics you consider important because we are prohibited from discussing material non-public information with you on an individual basis.

Larry: 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 during.

Bill DOnofrio: 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.

Larry: 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 the reconciliation to the most directly comparable GAAP metrics that can be found.

Bill DOnofrio: Additionally, we will be referencing certain non-GAAP financial measures and the reconciliation to the most directly comparable GAAP metrics that can be found in the appendix of today's presentation.

Larry: In the appendix of today's presentation.

Bill DOnofrio: I'll now hand this all over to Ole on slide three.

Larry: I'll now hand, the call over to OLED on slide three.

Ole Rosgaard: Thank you, Bill, and good morning, everyone. I want to start by recognizing our more than 14,000 colleagues across the world. Their discipline, focus, and execution continue to drive strong performance. In Q2, we made further progress under our Build to Last plan. Despite ongoing macroeconomic volatility, our resilient business model and emphasis on controlling what we can control give us confidence in the road ahead. That confidence is reflected in our decision to raise full year guidance, which Larry will walk through shortly. Our culture remains a core competitive advantage. I'm proud to report that we have once again been named one of Newsweek's top 100 most loved workplaces in the world.

OLED: Thank you Bill and good morning, everyone.

OLED: I want to start by recognizing our more than 14000 colleagues across the world.

Larry: Disciplined focus and execution continue to drive strong performance.

Larry: In Q2, we made further progress on the all built to last strategy.

Larry: Despite ongoing macroeconomic volatility.

Larry: Resilient business model and emphasis on controlling what we can control.

Larry: Confidence in the road ahead.

Larry: That confidence is reflected in our decision to raise full year guidance, which Larry will walk through shortly.

Larry: Our culture remains a competitive advantage.

Speaker Change: I'm proud to report that we have once again been named one of Newsweek's top 100, most loved workplaces in the world.

Ole Rosgaard: This marks our third consecutive year on the In addition, we received Gallup's Exceptional Workplace Award for the second year in a row. Our colleague engagement score places us in the 86th percentile of all manufacturing companies globally, with a remarkable 94% participation rate. These recognitions speak to the pride our teams take in their work and the environments we build where people feel empowered, valued, and connected to our purpose. That engagement drives legendary customer service. Our fiber team was recently honored with the Supplier Innovation Award from the U.S. Postal Service. USPS joined us in 2024 and is now a key customer for our Dallas sheet feeder facility.

Larry: This marks our third consecutive year on the list.

Larry: In addition, we received Gallops exceptional workplace award for the second year in a row.

Larry: Our colleague engagement score placed the source and the 86 percentile of all manufacturing companies globally, which is with a remarkable 94% participation rate.

Larry: Please make a nations speak to the pride our team has taken that work and the environments, we built where people feel empowered values and connected to our purpose.

Larry: Okay.

Larry: That engagement drives legendary customer service.

Larry: All five achieved was recently honored with the supplier Innovation award from the U S Postal service.

Larry: U S. P. S joined us in 2024 and is now a key customer for our Dallas sheet feeder facility.

Ole Rosgaard: This award is a strong validation of the long-term value and customer loyalty we create. Sustainability also sets us apart. While we view it as the right thing to do, it is also a clear business advantage. This marks our 16th consecutive year publishing sustainability reports, a rare track record in our industry. Our sustainability strategy is central to strengthening customer relationships and pursuing doable high-margin growth.

Larry: What is a strong validation of our long term value and customer loyalty we create.

Larry: Sustainability also sets us apart.

Larry: We view it as the right thing to do it is also a clear business advances.

Larry: This marks our 16th consecutive year publishing sustainability report, Iran track Records in our industry.

Larry: Our sustainability strategy is central to strengthening customer relationships and pursuing durable high margin growth.

Ole Rosgaard: Please turn to slide four. Our cost optimization efforts are progressing rapidly thanks to our team's focus and willingness to embrace change. As of quarter end, we have achieved $10 million in run rate savings toward our full year commitment of $15 to $25 million and $100 million total commitments compared to our 2024 baseline. A few highlights of projects on the way.

Larry: Please turn to slide four.

Larry: Our cost optimization efforts are progressing rapidly thanks to our team's focus and willingness to embrace change.

Larry: As of quarter end, we have achieved 10 million in run rate savings toward our full year commitment of 15 to 25 million.

Larry: And 100 million total commitments compared to our 2024 baseline.

Larry: A few highlights of projects on the way.

Ole Rosgaard: A thank you to our colleagues in Warminster, ALSEP, Wellcome and Oscos. Our operations and engineering teams are embracing change and utilizing Six Sigma practices to advance scalable and structural change in process efficiency and scrap reduction across our metal and fiber production plants. Second, we made a strategic decision to close our L.A. paperboard mill, removing 72,000 tons of capacity. While difficult, this step streamlines our network and improves long-term performance across our fiber operation. These are just two of many projects on the way. Each day, our conviction grows in our ability to achieve or exceed both our 2025 and 2027 commitments.

Larry: And thank you to our colleagues and walkman stopped alsip welcome in Oshkosh.

Larry: Our operations and engineering teams are embracing change and utilizing six sigma practices to advance scalable and structural change and process efficiency and scrap adoption across our middle and fiber production class.

Larry: Second we made a strategic decision to close our L. A paperboard mill.

Larry: Moving 72000 tons of capacity.

Larry: While difficult.

Larry: Step streamline our network and improve long term performance across our fiber operations.

Larry: These are there's too many.

Larry: Many projects underway each day, our conviction grows and our ability to achieve or exceed both our 2025 and 2027 commitments.

Ole Rosgaard: Across the board, our strategies work. We are sharpening our competitive edge, optimizing operations, and expanding in high return markets that positions us well when demand accelerates.

Larry: Across the board our strategy is working.

Larry: We are sharpening our competitive edge optimizing operations and expanding and high return markets that positions us well when demand accelerates.

Ole Rosgaard: please turn to slide five. Our portfolio continues to show resilience with especially strong performance in the areas we are in. Polymer solutions volumes improved year over year with small containers and IDC both up. That impact was partially offset by lower large polymer drum volumes due to softer industrial demand. Our polymers growth was driven by our target growth in markets of agrochemicals, food and beverage, pharma, and flavors and fragrances, which all showed year-over-year growth.

Larry: Please turn to slide five.

Larry: Our portfolio continues to show resilience with especially strong performance in the areas we are investing.

Larry: Polymer solutions volumes improved year over year with small containers and IDC both up.

Larry: That impact was partially offset by lower large polymer volumes due to softer industrial demands.

Larry: Our polymer growth was driven by our target growth markets of Ecmo chemicals, food and beverage pharma and flavors and fragrances, which all showed year over year growth.

Ole Rosgaard: This contrasts, contrasts metals, which was down 5% year-over-year due to exposure to chemical and lubricant markets, which continues to dissolve. Fiber solution volumes were down slightly compared to last year, but improved each month throughout the quarter. Our corrugated business outperformed and was up high single digits per day versus an industry decline of 2%. This differentiation was driven by strong independent demand. Integrated solutions saw continued growth led by recycled fiber, while external volumes, enclosures, paints, linings, and adhesives held steadily as we manage our own internal needs versus external demand.

Larry: This contrasts contrasts with metals, which was down 5% year over year due to exposure to chemical and lubricant market, which.

Larry: Continues to be softer.

Larry: Fiber solutions volumes were down slightly.

Larry: Compared to last year, but improved each month throughout the quarter.

Larry: Our corrugated business outperformed and was up high single digits.

Larry: Per day versus an industry decline of 2%.

Larry: This differentiation was driven by strong independent demand.

Larry: And the greatest solutions saw continued growth led by recycled fiber wireless external volumes and closures.

Larry: Signings in adhesives held steadily as we manage our own internal needs.

Larry: External demands.

Ole Rosgaard: It is interesting to note that last year was a leap year, giving one additional day of business as well. Demand remains stable across all regions outside North America. In North America, softness persists due to greater exposure to industrial end markets.

Larry: It is interesting to note that last year was a leap year, giving one additional day of business as well.

Larry: Demand remained stable across all regions outside North America.

Larry: In North America softness persistence due to greater exposure to industrial end markets.

Ole Rosgaard: The key takeaway across the previous four slides is clear. Our strategy is working. We are investing in resilient, high-growth markets, reinforcing our competitive strengths and optimizing our cost base simultaneously. This all prepares us to capture even further upside when demand meaningfully rebounds.

Larry: The key takeaway across the previous four slides is clear.

Larry: Our strategy is working.

Larry: Investing in resilience high growth markets, reinforcing our competitive strengths and optimizing our cost base simultaneously.

Larry: This all prepares us to capture even further upside when demand meaningfully whereabouts.

Ole Rosgaard: please turn to slide.

Larry: Please turn to slide six.

Ole Rosgaard: In closing, I want to briefly touch on a topic which demonstrates the resilience of our business. on TARIFF. We are staying ahead of potential disruption. Year to date, we have not seen major demand shifts tied directly to tariffs, but we continue to monitor demand patterns and talk closely with customers to identify any potential impacts on our end market. Our network of more than 250 facilities in over 40 countries allows us to buy, produce, and sell locally. This flexibility minimizes disruption, serves our customers' needs more flexibly than competition, and allows us to obtain a fair price for the additional exceptional service and adaptability we provide our customers.

Larry: In closing.

Larry: Want to briefly touch on a topic, which demonstrates the resilience of our business model.

Larry: On tariffs.

Larry: We are staying ahead of potential disruption yes.

Larry: Year to date, we have not seen major demand shifts tied directly to tariffs, but we continue to monitor demand patterns and talk closely with customers to identify any potential impacts on our end markets.

Larry: Our network of more than 250 facilities in over 40 countries and allows us to buy produce and sell locally.

Larry: This flexibility minimizing disruption serves our customers' needs more flexibly.

Larry: Competition and allows us to obtain a fair price for the additional exceptional service and adaptability, we provide our customers.

Ole Rosgaard: Our global sourcing team continues to assess risk, and we reaffirm that our maximum direct cost exposure is less than $10 million annually, although that figure at present is even lower due to mitigation actions and tariffs currently in effect versus worst-case scenarios. Meanwhile, we are capturing more value through network flexibility and pricing. We are also benefiting from pass-through mechanisms in our metals business as steel producers respond to raw material inflation.

Larry: Our global sourcing team continues to assess risks and we reaffirm that our maximum direct cost exposure is less than $10 million annually, although that figure at present is even lower due to mitigation actions.

Larry: Tariffs currently in effect versus worst case scenario.

Larry: Meanwhile, we are capturing more value through network flexibility and pricing.

Larry: Also benefiting from pass through mechanisms.

Larry: It's business as steel producers respond to raw material inflation.

Larry Hilsheimer: With that, I'll turn it over to Larry to walk through our Q2 financial performance on slide 7.

Larry: With that I'll turn it over to Larry to walk through our Q2 financial performance on slide seven.

Larry Hilsheimer: Thank you, Ole, and good morning, everyone. For the second quarter of fiscal 2025, adjusted EBITDA increased $44 million year over year to $214 million, and adjusted EBITDA margin was up 300 basis points to 15.4%. These results are a testament to our disciplined cost management, resilient business model, and our team's unwavering commitment to value creation. We generated $110 million of adjusted free cash flow, up from $159 million in Q2 of 24, and adjusted EPS of $1.19 versus $0.83 in Q2 of 24. The sale of our land management business, Satara, is on pace and we are excited about the level and the quality of interest we've received.

Larry: Thank you Ali and good morning, everyone for the second quarter of fiscal 2025, adjusted EBITDA increased $44 million year over year to $214 million and adjusted EBITDA margin was up 300 basis points to 15, 4%. These results are a testament to our disciplined cost management.

Larry: <unk> resilient business model and our team's unwavering commitment to value creation.

Larry: We generated $110 million of adjusted free cash flow up from $59 million in Q2 of 24, and adjusted EPS of $1 19 versus 83 SaaS in Q2 of 'twenty four.

Larry: The sale of our land management business. So terra is on pace and we are excited about the level and quality of interest we've received.

Larry Hilsheimer: The proceeds from the Satero divestment, combined with our accelerating cash flow generation, will be used to reduce debt following our capital allocation framework as outlined at Investor Day.

Larry: The proceeds from this with Taro divestment combined with our accelerating cash flow generation will be used to reduce debt following our capital allocation framework as outlined at Investor day.

Larry Hilsheimer: Our decision to close our LA paper bill, paperboard mill, while extremely difficult due to the impact on our colleagues, is a prime example of the next stage of optimization for Greif. At our December Investor Day, we discussed how we've executed on the vast majority of opportunities in the lowest quartile of our quadrant analysis. We are now focused on moving from good operators to great operators across our global footprint of 250 plus facilities. We are digging deeper to identify untapped opportunities to increase our return on invested capital within facilities in each quadrant. This may lead to strategic investment or closure, as was the case of LA, but our actions will remain focused on deriving the highest long-term return on capital.

Larry: Our decision to close our ally paper Bill pay.

Larry: Paperboard mill, while extremely difficult due to the impact on our colleagues is a prime example of the next stage of optimization for Greg.

Larry: At our December Investor Day, we discussed how we've executed on the vast majority of opportunities in the lowest quartile of our QUADRA analysis. We are now focused on moving from good operators two great operators across our global footprint of 250 plus facilities.

Larry: We are digging deeper to identify untapped opportunities to increase our return on invested capital within facilities in each quadrant. This may lead to strategic investment or closure as was the case of ethane, but our actions will remain focused on driving the highest long term return on.

Larry Hilsheimer: Please turn to slide 8 for a segment or overview. In our customized polymer solutions segment, adjusted EBITDA increased $19 million year over year to $53 million, driven by a combination of volume growth, favorable product mix, and continued discipline on value over volume price . Our polymer segment is performing well given the demand environment as our target growth and markets continue to be more resilient than other areas of our business.

Larry: <unk>.

Larry: Please turn to slide eight for a segment RV overview.

Larry: In our customized polymer solutions segment, adjusted EBITDA increased $19 million year over year to $53 million driven by a combination of volume growth favorable product mix and continued discipline on value over volume pricing.

Larry: Our polymer segment is performing well given the demand environment as our target growth end markets continue to be more resilient than other areas of our business.

Larry Hilsheimer: Durable metal solutions sales were lower year over year due to the softness of the industrial and markets only mentioned earlier. Our core focus for us is capitalizing on operating leverage in metals when industrial and markets recover. Encouraging gross margins were up year-over-year through value-over-volume focus. Sustainable Fiber Solutions posted $80 million of adjusted EBITDA relative to $50 million in the prior year. even have margins also improved to 13.3% from 8.5% in the prior year. As a reminder, in February, RISD recognized $40 a ton of container board price increase, which contributed to this quarter's results. While we are certainly pleased with the improvement in price, price costs in our fiber business, we consider the market to be out of balance.

Larry: Terrible metal solutions sales were lower year over year due to the softness of the industrial end markets. All we mentioned earlier.

Larry: Our core focus for us is capitalizing on operating leverage in metals and industrial end markets recover.

Larry: Encouraging gross margins were up year over year through value over volume focus.

Larry: Sustainable fiber solutions posted $80 million of adjusted EBITDA relative to $50 million in the prior year.

Larry: EBIT margins also improved to 13, 3% from eight 5% in the prior year.

Larry: As a reminder, in February risky recognized $40 a ton of containerboard price increase which contributed to this quarter's results. While we are certainly pleased with the improvement in price and price cost in our fiber business, we consider the market to be out of balance.

Larry Hilsheimer: The $30 a tonne URB price increase recently recognized by RISD will continue to improve margins, but we have conviction that the demand we are seeing warrants recognition of the full $50 to $70 a tonne we announced in March. Those price increases will continue to push our fiber business towards normalized margins near 20% and get us closer to achieving our objective of greater than 18% margins for the enterprise. Integrated Solutions delivered $17 million and adjusted EBITDA up slightly from prior year. While volumes were strong in Q2, the overall product mix was incrementally heavier on recycled fiber, which led to lower sales mix, resulting in modest growth year over year.

Larry: $30 a ton <unk> price increase recently recognized by Rusty will continue to improve margins, but we have conviction that the demand. We are seeing warrants recognition of the full $50 to $70 a ton we announced in March those price increases will continue to push our fiber business towards normalized margins near 20%.

Larry: And get us closer to achieving our objective of greater than 18% margins for the enterprise.

Larry: Integrated solutions delivered $17 million and adjusted EBITDA up slightly from prior year, while volumes were strong in Q2. The overall product mix was incrementally heavier on recycled fiber, which led to lower sales mix, resulting in modest growth year over year.

Larry Hilsheimer: Sales were still up year-over-year in closures as we continue to grow that business.

Larry: Sales were still up year over year enclosures as we continue to grow that business. However, paints linings in adhesives had lower external volumes in the quarter.

Larry Hilsheimer: However, paints, linings, and adhesives had lower external volumes in the quarter.

Larry Hilsheimer: Please turn to slide nine to discuss guidance. We are raising low-end fiscal 2025 guidance. Adjusted EBITDA is now expected to be at least $725 million, up from $710 million, and adjusted free cash flow guidance is increased to $280 million from $245 million due to the increased EBITDA and improving operating working capital management. This phrase reflects the impact of better price-cost performance in Q2 and revised higher price-cost expectations for the second half.

Larry: Please turn to slide nine to discuss guidance.

Larry: We are raising low end fiscal 2025 guidance adjusted EBITDA is now expected to be at least $725 million up from $710 million and adjusted free cash flow guidance is increased to $280 million from $245 million due to the increased EBITDA and improving.

Larry: Operating working capital management.

Larry: Raise increases.

Larry: Raise reflects the impact of better price cost performance in Q2, and revised higher price cost expectations for the second half.

Larry Hilsheimer: Given this is low-end guidance, we reduced that impact with a more bearish volume assumption than in our previous guidance, as well as for the negative EBITDA impact of higher incentives due to our improved performance. The largest variable which could provide upside to this low-end guidance is volume.

Larry: Given this is how as low end guidance, we reduce that impact with a more bearish volume assumption than in our previous guidance as well.

Larry: For the negative EBIT impact of higher incentives due to our import through performance.

Larry: The largest variable which could provide upside to this guidance as volume.

Larry Hilsheimer: We are not yet providing a range due to the continuously evolving trading dynamics, but have high conviction in our raised low-end. This increase is not based on optimism. It is grounded in our demonstrated ability to access. We've proven that Greif can deliver performance even in a challenging industrial economy. Price-cost performance, especially in fiber, is improving. Polymers continue to grow, and our disciplined cost structure is enabling margin expansion. We're raising guidance because our actions are driving results, and we're confident in our ability to sustain this performance through the balance of the year.

Larry: We are not yet providing a range due to the continuously evolving trading dynamics, but have high conviction in our raised low in <unk>.

Larry: This increase is not based on optimism is grounded in our demonstrated ability to execute we've proven that Greg can deliver performance even in a challenging industrial economy price cost performance, especially in fiber is improving Oliver has continued to grow and our disciplined cost structure is enabling margin expansion, we're raising guidance.

Larry: Because of our actions are driving results and we are confident in our ability to sustain this performance through the balance of the year with that I'll turn it back to only on slide 10.

Ole Rosgaard: With that, I'll turn it back to Ole on slide 10.

Ole Rosgaard: Thanks, Larry. Let me close by underscoring what this quarter confirms. Our strategists were We are expanding margins. growing EBITDA, and generating strong free cash flow, even in a challenging macro environments. We set ambitious cost optimization commitments at our investor day, and we are delivering exactly as planned. Our commitment to achieving $1 billion in EBITDA and $500 million in free cash flow by 2027 is unwavering. As we have consistently done with every commitment we have given in the past, we are also delivering on this commitment. We remain focused on what we can control, the culture we have built, centered on high engagement, agility and disciplined execution, continues to be a powerful competitive advantage to us.

only: Thanks, Larry.

Larry: Let me close by underscoring what this quarter confirms.

Larry: Our strategy is working.

Larry: Spending margins growing EBITDA and generating strong free cash flow, even in a challenging macro environments.

Larry: We set ambitious cost optimization commitments at our Investor day, and we are delivering exactly as planned.

Larry: Our commitment to achieving $1 billion and EBITDA at $500 million and free cash flow by 2027 is unwavering.

Larry: As we have consistently done with every commitment we have given in the past. We are also delivering on these commitments.

Larry: Focused on what we can control our cost.

Larry: We have built centered on high engagements agility and disciplined execution continues to be a powerful competitive advantage to us.

Ole Rosgaard: I have never been more confident in our team or more optimistic about Greif's future.

Larry: I've never been more confidence in our team are more optimistic about <unk> future we.

Ole Rosgaard: We are building a stronger company and doing it the right way for our customers, for our colleagues, and for our shareholders.

Larry: We are building a stronger company and doing it the right way for our customers for our colleagues and for shareholders.

Ole Rosgaard: Thank you for joining us today.

Larry: You for joining us today, operator will you. Please open the line for questions.

Operator: Operator, will you please open the line for questions? Yes, as a reminder, to ask a question, please press star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again. Please limit yourself to one question and one follow-up.

Larry: Okay.

Larry: As a reminder to ask a question. Please press star one one on your telephone and wait for your name to be announced to withdraw. Your question. Please press star one again, please limit yourself to one question and one follow up and one moment for our first question.

Operator: And one moment for our first question.

Ghansham Panjabi: And our first question will be coming from Ghansham Panjabi of Baird, your line is open.

Speaker Change: And our first question will be coming from Ghansham Panjabi of Baird. Your line is open.

Josh Veselyan: Hey everyone, it's actually Josh Veselyan for Gantrim. Thanks for taking my questions. You know, Ole, you provided some good commentary on tariffs, and it seems like demand fluctuation is relatively minimal, but I'm just curious what those conversations with customers look like as it relates to what they're seeing in that market demand and how they're thinking about that on a go-forward basis. Yeah, so I mean, generally, the sentiment is really unchanged. If you look at housing, for instance, housing, sales of existing housing is at its lowest since 1995. And auto bills, it is lowest in three years.

Speaker Change: Hey, everyone. This is actually Josh on for Ghansham. Thanks for taking my questions.

Speaker Change: You provided some commentary on tariffs.

Speaker Change: It seems like demand fluctuation was relatively minimal, but I'm just curious what those conversations with customers look like as it relates to kind of what theyre seeing in end market demand and how they're thinking about that on a go forward basis.

Speaker Change: Yes, that's all I mean generally the sentiment is really unchanged.

Speaker Change: If you look at housing for instance housing sales of existing housing is it at its lowest since 90.

Speaker Change: 95, and all of it is lowest in three years and the tariffs that we keep talking about reoccurring themes and all of this really has an impact, especially on our chemical customers.

Ole Rosgaard: And the tariffs that we keep talking about, that is reoccurring themes. And all this really has an impact, especially on our chemical customers. And until we see an improvement of existing house sales, which is linked to the interest rates, we don't really believe and our customers don't really believe they'll see any demand improvement either. Did that answer your question? Yeah, yeah, no, that's great color.

Speaker Change: And until we see a improvement of existing home sales.

Speaker Change: Which is linked to the interest rates, we don't really believe in our customers don't really believe they'll see any demand improvement either.

Speaker Change: Great answer.

Speaker Change: Right.

Speaker Change: Yeah, Yeah, no that's great color. Thank you.

Ole Rosgaard: Thank you. Um, you know, and then maybe just for my follow up, I just wanted to clarify on, you know, some of the raw material inflation that you're talking about that was tariff related, you know, just, you know, any more color on what you know, you're, you guys are seeing there and you know, what the near term impact on EBITDA margins might be for the year. As I said, we... The maximum, the worst case impact for us is around 10 million, but we're not even close to that. We have, you know, our team have done a great job in minimizing that impact, and we are much, much lower than that at the moment.

Speaker Change: And then maybe just for my follow up I just wanted to clarify on some of the raw material inflation that you were talking about that was tariff related just any more color on what you are.

Speaker Change: We're seeing there and what the near term impact on EBITDA margins might be for the year.

Speaker Change: As I said we.

Speaker Change: The maximum worst case impact for us is around $10 million.

Speaker Change: But we're not even close to that we have.

Speaker Change: Team have done a great job in minimizing that impact that we.

Speaker Change: We are much much lower than that at the moment.

Larry Hilsheimer: So it's really non-material. Yeah, and Josh, the other element of that, obviously, is we've already seen steel producers in the U.S. push up costs or prices. You know, that then applies against our lower base inventory and provides some lifted margin that while temporary, until things catch up, will provide additional spread. So this increase in tariffs to the 50% level would probably end up being helpful above our low-end guidance. And it could actually end up being a tailwind for us, Josh.

Speaker Change: So, it's really not material and Josh the other element of that obviously as we've already seen steel producers in the U S push up cost or price.

Speaker Change: That then implies against our lower base inventory and provide some lift in margin that while temporary until things catch up will provide additional spreads. So this increase in tariffs to the 50% level would probably end up being helpful above our low end guidance I think it could actually end up being a tailwind for us just and then again.

Ole Rosgaard: And then, again, I just want to remind that, you know, we operate 250 facilities in over 40 countries. So most of our business is done locally. We source raw materials locally. We manufacture locally. We sell locally, which obviously, you know, means that tariffs doesn't come into play.

Speaker Change: I just want to remind that we operate 250 facilities in over 40 countries. So most of our business.

Speaker Change: Locally we source raw materials locally locally manufactured locally with sell locally, which obviously means that tariffs doesn't come into play.

Josh Veselyan: Okay, great.

Josh Veselyan: Thanks, guys.

Operator: I'll turn it over.

Speaker Change: Okay, great. Thanks, guys I'll turn it over.

Speaker Change: Okay.

Michael Roxland: One moment for our next question. And our next question will be coming from Michael Roxland. of Truist Securities, your line is open, bye.

Speaker Change: One moment for our next question.

Speaker Change: And our next question will be coming from Michael Roslyn.

Speaker Change: <unk> Securities. Your line is open mic.

Michael Roxland: Thank you, Ole, Larry, Bill, and Dan for taking my questions, and congrats on all the progress. The first question I have is on SG&A, which we believe remains elevated. I think there was a slight decline sequentially in SG&A as a percentage of revenue, but still above the average for last year.

Michael Roslyn: Thank you Ali Larry Bill and Dan for taking my questions and congrats on all the progress.

Michael Roslyn: Okay.

Michael Roslyn: The first question I have just on SG&A.

Michael Roslyn: We believe remains elevated.

Michael Roslyn: I think there was a slight decline sequentially in SGA as a percentage of revenue, but still above the average for last year. So I'm just curious as to what's driving the elevated SG&A and what level of SG&A as a percent of sales are you targeting and over what time.

Larry Hilsheimer: So I'm just curious as to what's driving the elevated SG&A and what level of SG&A as a percent of sales are you targeting and over what time? Yeah, so you've got a couple of factors going. And I mentioned in my commentary, somewhat increased in incentives, because your team's performing well. So that's have a little bit of impact. You've got the entry of the sort of full quarter of IPAC-Chem, and then you've got currency impacts, which on the bottom line are actually a lift, but on SG&A, it's increasing it. But yeah, we agree with the, our SG&A is higher than what we view it to need to or should be over a long period of time.

Michael Roslyn: So you've got a couple of factors going in I mentioned in my commentary.

Michael Roslyn: Somewhat of an increase in incentives because the team is performing well so thats a little bit of impact you've got the entry of that sort of a full quarter of AIPAC Cam and then you've got currency impacts, which on the bottom line or actually a web but on SG&A, it's increasing it but yes, we agree with you our SG&A is higher than what we view it.

Michael Roslyn: Need to or should be over a long period of time and as part of our.

Larry Hilsheimer: And as far as part of our cost optimization efforts, we would like to see as the volume recovers and our revenue goes back, we expect our SG&A to be below 10%. Now, it gets somewhat inflated when you're doing acquisitions, because you end up with depreciation related to tangibles that flows in there. But that as a general rule is what our target is longer term.

Michael Roslyn: Cost optimization efforts, we would like to see as the volume recovers in our revenue goes back we expect our SG&A to be below 10% now it gets somewhat inflated when youre doing acquisitions could you end up with depreciation related to intangibles that flows in there, but that as a general rule is what our target is longer.

Larry Hilsheimer: Very helpful answer. Just to put a bow on that, there are some factors in terms of Incentive Comp and IPAC-CHEM, but really you're expecting Accelerated Revenue to bring down that ratio, so it's more market-related in terms of driving that ratio. No, it's a combination, but yeah, I mean, ultimately we do, obviously there'd be an impact to the ratio related to the recovery of volumes. And, you know, our cost optimization is like, you know, one of our key focuses, obviously, and so we announced a $100 million cost optimization. I'd call it business optimization over our entire platform.

Michael: Sure Michael.

Michael: Very helpful. Thanks.

Michael: Is that you really.

Speaker Change: Largely what factors in terms of incentive comp in APAC.

Speaker Change: Hi, Pat came at me, a little FX, but really youre expecting accelerating revenue to bring down that ratio. So it's more of a much more market related.

Michael: In terms of driving that ratio.

Michael: No. It's a combination, but yes, I mean, ultimately we do obviously there'd be an impact of the ratio.

Michael: Related to the recovery of volumes and.

Michael: Our cost optimization is like one of our key focus is obviously and so we announced $100 million cost optimization I would call business optimization over our entire platform.

Larry Hilsheimer: Some of that relates into business operations, some of it's SG&A, but it's over our 24 levels. So, yeah, it's a combination, but I just was trying to give you the long-term impact. We try to get down below that 10%, which would be a combination of some revenue recovery, but a lot of it still costs out.

Michael: If that relates into business operations some of its SG&A, but it's over our 24 levels. So.

Michael: Yes, it's a combination but I just was trying to give you the long term impact we try to get down below that 10%, which would be a combination of some revenue recovery, but a lot of it still cost out.

Larry Hilsheimer: My second question, you mentioned strong URB demand, which you believe should warrant the full price increase of $50 to $70 a ton. If you get that incremental $20 to $40 a ton of URB pricing, all else equal, what type of incremental EBITDA should we expect you generate? What type of margin would you have in sustainable fiber as a result of that?

Michael: Got it I appreciate all the color and then just my second question.

Speaker Change: I know you mentioned strong <unk> demand would you believe it was the full price increase of 50 to $70 a ton. So if you get that incremental 20 to $40 a ton of USB pricing all else equal what type of incremental EBITDA should we expect you generate and what type of margin would you have in sustainable fiber as a.

Larry Hilsheimer: And then quickly, lastly, do you see the potential for further rationalization in CRB and maybe just becoming solely focused on URB and container board?

Speaker Change: Out of that and then quickly just lastly, just you see the potential for further rationalization in CRB.

Speaker Change: Maybe just becoming fully focused on <unk> and containerboard thanks very much.

Larry Hilsheimer: Thanks very much.

Larry Hilsheimer: Let me answer the last piece first and then come back to the incremental impact on pricing. So the remaining CRB machine we have is actually a swing machine. So we can swing between URB and CRB depending on market demand. And right now we're a niche little player in our space. We're happy with the operations there. And we don't really have any plan to make it full-time URB or just taking advantage of whatever we can get in the market.

Speaker Change: Let me answer the last piece first and then come back to the incremental impact on.

Speaker Change: Pricing.

Speaker Change: So the remaining CRB machine, we have is actually a.

Speaker Change: Swing machine, so we can swing between <unk> and CRB, depending on market demand right now.

Speaker Change: A niche player in our space, we're happy with the operations there and we don't really have any any plan to make it full time U R. B or we're just taking advantage of whatever we can.

Larry Hilsheimer: Relative to the impact of pricing, about a $10 a ton change in URB pricing is about $530,000 a month for us. And so hopefully that gives you some something to work with.

Speaker Change: Get in the market.

Speaker Change: Relative to the impact of pricing.

Speaker Change: About $10.

Speaker Change: Ton unchanged.

Speaker Change: <unk> pricing is about $530000 a month for us.

Speaker Change: So hopefully that gives you some something to work with and Mike just one added comment to what Larry said, so on the CRB, we will continue to optimize paper grades.

Ole Rosgaard: And Mike, just an added comment to what Larry said. So on the CRB, we will continue to optimize paper grades, you know, by highest return. And if we swing a machine to URB from CRB, that's what we will do. If that's what it provides us. Thank you very much again.

Speaker Change: By highest return.

Speaker Change: And if we're swinging machine to be from CIB Thats, what we will do if thats what it provides us.

Speaker Change: Got it thank you very much again.

Matt Roberts: One moment for our next question. Our next question will be coming from Matt Roberts of Raymond James. Your line is open. Hey, Ole Larry, good morning.

Speaker Change: I wanted to my next question.

Matt Roberts: Our next question will be coming from Matt Roberts of Raymond James Your line is open Matt.

Matt Roberts: Hey, good morning.

Matt Roberts: Um, first question on the volume, I believe you said not giving a range, but maybe can you just help me understand what underpins the 725 guide? And related to tariff impacts on volumes, I know you noted no demand shifts, but in light of Liberation Day in early April, can you provide some incremental color into demand in April, whether there was any front running ahead of that, or in how trends have progressed in April? More recently, there's a window open in the tariff. So I'm wondering if you've seen any spike more recently there. Yeah, we all can supplement what I say, but we you know, we haven't seen really any Trans specifically tied to tariffs, even in indications with the customers, it really Thank you.

Larry: Larry Good morning.

Speaker Change: First question on the volume I believe you said not giving a range, but maybe could you just help me understand what underpins the 725 guide and related to tariff impacts on volumes I know you've noted no demand shifts but.

Speaker Change: In light of Liberation day in early April can you provide some incremental color and good demand in April whether there was any front running ahead of that or how trends have progressed in April and may.

Speaker Change: More recently, there is a window open and the tariffs I'm wondering if you've seen any any spike more recently there.

Speaker Change: Yes.

Speaker Change: All we can supplement what I say, but we haven't seen really any.

Speaker Change: Trends, specifically tied to tariffs even in indications with.

Speaker Change: Customers.

Speaker Change: It really.

Ole Rosgaard: in the U.S. has a whole lot more to do with interest rates in home building and the demand impact that's having on the chemicals industry and even auto production being down which perhaps that's indirectly tied to tariffs. So, what we saw is, you know, if I go from our prior low-end guidance of 710 to 725, we got about, you know, 53 million roughly price cost benefit in that which metal solutions is up 17 million, polymer solutions is up 17 million, fiber solutions is up 26 million and integrated with the OCC cost coming down is down 8.

Speaker Change: Particularly in the U S has a whole lot more to do with interest rates in homebuilding and the demand impact that's having on the chemicals industry and even auto production being down which perhaps that's indirectly tied to tariffs, but what we saw is if I go from our prior guidance of $7 10 to $7 25.

Speaker Change: We've got about.

Speaker Change: $53 million roughly price cost.

Speaker Change: Benefit in that which metal solutions was up 17 million polymer solutions is up 17 million fiber solutions was up $26 million and integrated with the OCC costs coming down is down eight and then if you go on the volume side, we're down about $5 million in metal solutions about $5 million in polymer solutions.

Larry Hilsheimer: And then if you go on the volume side, we're down about 5 million in metal solutions, about 5 million in polymer solutions and down 30 million in fiber solutions just relative to just an overall impact relative to where we were previously. And Matt's just on there. So directly. impact, that's something we can control. And so there is No direct impact on us. But one thing we cannot control, that's the indirect impact. And when tariffs affect the overall demands in the markets, that obviously has an effect on all of us, which is something we can't control.

Speaker Change: <unk> and down $30 million in fiber solutions, just relative to just an overall impact relative to where we were previously.

Matt: Hey, Matt.

Matt: So directly.

Speaker Change: Impact that's something we can control and so there is.

Speaker Change: No direct impact on us.

Speaker Change: One thing we cannot control thats, the indirect impacts and with tariffs.

Speaker Change: FX the overall demands in the market that obviously has an effect on all of US which is something we can't control.

Matt Roberts: But we do have the flexibility to adapt production for customers, and we will price for it. And then all ranges of these outcomes, they are considered in Larry's revised guide. Thank you very much for the incremental color there.

Speaker Change: While we do have the flexibility to adapt production for customers and we will price for it.

Speaker Change: And then all ranges of these outcomes they are considered.

Speaker Change: This revised guidance.

Speaker Change: Thank you very much for the incremental color there.

Ole Rosgaard: For my follow-up, specifically in Polymer, you noted business wins and market-driven growth in target end markets. I think if you elaborate on what you're expecting in those target end markets for the rest of the year, and more specifically on those new business wins, what areas were they in, and what do you attribute those to? Is it greater scale, or are you starting to realize cross-saving benefits following acquisitions? Is the customer service tool providing a benefit as Greif Plus is rolled out further? Is there any incremental color there on those new market wins? Thanks again for taking the question.

Speaker Change: And for my follow up specifically in polymer United business wins and market driven growth in target end markets.

Speaker Change: Hey can you elaborate on what youre expecting in those targeted end markets for the rest of the year and more specifically on those new business wins, what areas, where they are in it and what do you attribute those two basic greater scale or are you starting to realize cross savings benefit following acquisitions, the customer service tools, providing a benefit.

Speaker Change: As bright plus has rolled out further is there any incremental color there on the new market wins, thanks, guys for taking the questions.

Ole Rosgaard: Well, let me just zoom out and then go back to we often reference invest today, but that's where we presented our whole strategy. Our growth strategy hinges around the following N-segments. That is agrochemical, food and bath, flavor and fragrances, and pharmacy. Those end segments, they grow faster than GDP. That's why we have picked them to really focus on them. The products that services those segments, they are polymer products. That's why we are focusing on polymer in our strategy. And what we have seen in the quarter is exactly that, that those end segments have proven to be more resilient than other end markets, exactly as we planned and expected.

Speaker Change: Let me just zoom out and then go back to when we often reference Investor day, but that's why we presented our whole strategy, we have our growth.

Speaker Change: <unk> hinges of Rollins.

Speaker Change: The following in segments that is agrochemical, food and Bev flavor and fragrances and pharma.

Speaker Change: Those end segments, they grow faster than GDP, that's why we haven't picked them to really focus on them the products that service. The store segment stay our polymer products. That's why we are focusing our polymer and our strategy and what we have seen in the in the quarter is exactly that.

Speaker Change: At dose and segments have proven to be more resilient than other end markets exactly as we planned and expected and also we have grown year over year in dose and segments.

Ole Rosgaard: And also we have grown year over year in those end segments. So the overall growth in our polymer has been one and a half percent year over year, but then our legacy polymer business, which is large polymer drums, especially in North America, that market serves the chemical industry, the industrial side of it, and that market's down. But even with that, we still have seen overall growth in the polymer market. Good to see you.

Speaker Change: The overall growth in our polymer has been the one 5% year over year, but then our legacy polymer business, which is large polymer drops, especially in North America.

Speaker Change: That markets serves the chemical industry.

Speaker Change: The industrial side of it and that market is down, but even with that we still have seen overall growth in the polymer markets.

Matt Roberts: Thank you, Ole.

Speaker Change: Good to see thank you Ali.

Operator: And one moment for our next question.

Speaker Change: And one moment for our next question.

George Staphos: Our next question will be coming from George Staphos of Bank of America Securities. Your line is open. Thanks so much. Hi, everyone. Good morning. Hope you can hear me okay. Thanks for the details. How are you?

Speaker Change: Our next question will be coming from George Staphos.

George Staphos: Bank of America Securities. Your line is open.

George Staphos: Thanks, So much hi, everyone. Good morning Hope you can hear me okay.

George Staphos: Joe detailed.

George Staphos: How are you.

George Staphos: So my questions to start, I know we have two questions here, is on paperboard broadly. So when we consider the LA closure, and also also Austell, What will that do ultimately to your blended cost per ton? and or margin as you see it normalized for the for the business. And given the closures, will it adjust require you to adjust operations or inventory management? Since you'll have fewer facilities to produce from, and therefore you might need to keep more buffer stock or do other things from an operating standpoint. So cost per ton given the closures and then operating adjustment that you might need given the closures and how to follow up.

George Staphos: So.

Speaker Change: My question to start I know, we have two questions here is on paperboard broadly so when we consider the la closure and also also are still.

Speaker Change: What will that do ultimately to your blended cost per ton.

Speaker Change: Andrew or margin as you see it normalized for the for the business.

Speaker Change: Given the closures will adjust.

Speaker Change: Require you to adjust operations or inventory management.

Speaker Change: You'll have fewer facilities to produce from.

Speaker Change: And therefore, you might need to keep more buffer stock or do other things from an operating standpoint, so cost per tonne given the closures and then operating adjustment that you might need given the closures and then I had a follow on.

Larry Hilsheimer: Yeah, George, I don't have the answer for you on what the cost per ton impact is. What I can tell you is that with the closures of, you know, Pittsburgh and LA and Austell, you know, after we get through the transitionary costs that sort of offset that stuff, that'll be an annual bottom line, even a cost impact of a positive 10 million bucks a year to the bottom line. As we said, on each of those facilities, the end customer mix, we shifted what made sense to being served out of our existing mill footprint. And, you know, so obviously, that all factors in to drive a lower average cost per ton and, you know, higher margin that drives to that bottom line $10 million impact.

George Staphos: Yes George.

Speaker Change: Don't have the answer for you on what the cost per ton impact is what I can.

Speaker Change: Can tell you is that with the closures of.

Speaker Change: Fitchburg again.

Speaker Change: La <unk>.

Speaker Change: After we get through the transition area cost, that's sort of offset that stuff that would be an annual bottom line EBIT cost impact or a positive 10 million bucks a year or two to the bottomline.

Speaker Change: As we said on each of those facilities.

Speaker Change: And customer mix, we shifted what made sense to being served out of our existing mill footprint.

Speaker Change: And so obviously that all factors in to drive a lower average cost per ton.

Speaker Change: Higher margin that drives to that bottom line $10 million impact.

Larry Hilsheimer: Thank you for that.

Speaker Change: For that but yes.

Larry Hilsheimer: But yeah, I haven't looked at what the average cost per ton impact is, unfortunately. And just on the operations, aside from sort of optimizing your production relative to your target and markets, anything else that you would relate to us that we'll be able to discern, watch, monitor in your financials? um Yeah, I mean, it's Yeah, obviously, it's all part of, as you noted, our cost optimization, our cost out program, and I would just add to that $10 million on the bottom line for fiscal 26 and forward. Okay. That's fine, Larry.

Speaker Change: Looked at what the average cost per ton impact is.

Speaker Change: Unfortunately.

Speaker Change: And just on the operations aside from sort of optimizing your production relative to your target end markets anything else that you would relate to us that we will be able to discern watch monitor in your financials.

Speaker Change: Yes.

Speaker Change: Obviously, it's all part of as you noted our cost optimization and cost out program and I would just add to that $10 million on the bottom line for fiscal 'twenty.

Speaker Change: Six of them forward.

Speaker Change: Okay.

Larry Hilsheimer: I was getting more into sort of how you run the business, but I'll leave it there. I guess on the cost out program and the progress you're making towards the goal of on the high end $25 million this year and the $10 million I think you've got through 2Q, are the categories of benefit the same throughout the year? Do they evolve? And if they do evolve over the course of the next couple of quarters, what does that mean in terms of the business and the margin both the rest of the year and into 2026?

Speaker Change: That's fine that's getting more into sort of how you run the business, but I'll leave it there I guess on the cost.

Speaker Change: Out program and the progress, we're making towards the goal of on the high end $25 million this year and the $10 million I think you've got.

Speaker Change: Through <unk>.

Speaker Change: The categories of benefit the same throughout the year do they evolve and if they do evolve over the course of the next couple of quarters, what does that mean in terms of the business and the margin.

Speaker Change: The rest of the year and into 2026 I'll turn it over there.

Larry Hilsheimer: I'll turn it over there.

Larry Hilsheimer: I'll come back if I can. And Ole may add some color too, but basically what we've got so far is a combination of operational costs, outs, and some SG&A cost reductions. And to reemphasize, the $10 million is what will be run rate, what we know will be run rate this year. $5 million is what we'll actually realize this year. And then the $10 million I mentioned from those three mill closures does not impact this year. So it was effectively locked up against our long-term objective, already 20 of the 100 kind of thing. So this whole program goes against the broad cost structure and revenue opportunities of our business, so whether it's manufacturing cost or SG&A.

Speaker Change: Accounts.

Speaker Change: It may add some color too but.

Speaker Change: Basically what we've got so far is a combination of operational cost outs and sonesta.

Speaker Change: And SG&A.

Speaker Change: Cost reductions.

Speaker Change: Reemphasize the $10 million is what it would be run rate. What we know will be run rate. This year was $5 million is what we'll actually realize this year and then.

Speaker Change: And in the $10 million I mentioned from those three mills closures does not impact this year so effectively.

Speaker Change: Effectively locked up against our long term objective already 20 of the 100.

Speaker Change: Im kind of thing.

Speaker Change: So this whole program goes against the broad cost structure and revenue opportunities of our business. So whether it's manufacturing cost of our SG&A, but we're very pleased with the progress to date.

Ole Rosgaard: But we're very pleased with the progress to date. We've even enhanced our confidence of getting to our billion-dollar-plus commitment for going into 28 with every month that we go further.

Speaker Change: Even enhanced our confidence.

Speaker Change: Getting to our $1 billion plus.

Speaker Change: Commitment for covenant.

Speaker Change: Covenant going into 'twenty eight.

Speaker Change: With every month that we go go further Josh just to give you some us on some color.

Ole Rosgaard: Josh, just to give you some color, you'll remember that last year we reorganized the business, which was really the precursor, the planned precursor for doing the business optimization. And the business optimization, we have more than 70 work streams in motion at the moment. And they are SG&A rationalization, network optimization, operating efficiency gains, and so on. So in terms of the millions we talk about, we're playing on the whole piano, and we will continue to do that. And there's things that's in flight that we can't talk about on the earnest call, but I can just mention again that we have over 70 work streams in flight.

Speaker Change: But Atlanta last year, we reorganized the business, which was really the precursor of the planned precursor for doing the business optimization.

Speaker Change: Yes.

Speaker Change: So and that business up some I'd say, we have more than 70 work streams.

Speaker Change: In motion at the moment.

Speaker Change: Yes.

Speaker Change: SG&A rationalization network optimization.

Speaker Change: Operating efficiency games.

Speaker Change: Our gains and so on.

Speaker Change: So in terms of.

Speaker Change: Dominion as we talk about the planning on the whole piano.

Speaker Change: And we will continue to do that and Thats things that in best in flight that we can't talk about on the earnings call.

Speaker Change: But I can just mention again that we have over 70 work streams in flight.

Operator: Very good.

Operator: I'll turn it over.

Speaker Change: Very good I'll turn it over to Rick I'll have one more question when we come back in queue. If we get there. Thanks.

Gabe Hajde: I'll have one more question when we come back in queue if we get there.

Gabe Hajde: Thanks. As a reminder, to ask a question, please press star 1-1 from your touchtone telephone. Our next question will be coming from Gabe Hajde of Wells Fargo. Gabe, your line is open. Ole, Larry, Bill, good morning. I wanted to ask about slide 8. You reference some price and volume impacts in the metals business. I'm just curious if you're specifically calling anything out from a competitive standpoint or if this is in relation to steel. And then maybe revisiting the question that Matt Roberts was asking about on slide 6.

Speaker Change: As a reminder to ask a question. Please press star one one from your Touchtone telephone.

Speaker Change: Our next question will be coming from Gabe Haiti of Wells Fargo. Gabe Your line is open.

Gabe Haiti: Oh, Hey, Larry good morning.

Larry: Good morning.

Speaker Change: I wanted to ask about slide eight.

Speaker Change: You referenced some price and volume impacts in the metals business.

Speaker Change: I'm just curious if you're specifically, calling anything out from a competitive standpoint or if this is in relation to steel and then maybe revisiting the question that Matt Roberts was asking about on slide six.

Larry Hilsheimer: It seems like there's sort of two discrete items. You've got an identified up to $10 million impact, and it's not clear if that's volume-related or cost-related, so maybe if you can clarify that. And then I think two bullet points down, you say there's a potential positive head or tailwind from, I'm assuming, rising steel. If you didn't, can you quantify that for us, or is that included in the... 17 million of favorable price costs that you called out, Larry. in response to another question. Yeah, it is included in there, Gabe. And so what we are referencing relative to the metals business is the fact that in the US, you know, index costs, cost index have risen, causing our price adjustment mechanisms to kick in against lower cost inventory.

Speaker Change: It seems like there's sort of two discrete items, you've got identified 10 up to $10 million impact and it's not clear if that's volume related or cost related but maybe if you can clarify that and then.

Speaker Change: I think two bullet points down you say theres a potential positive.

Speaker Change: Tailwind from.

Speaker Change: I am assuming rising steel if you didn't.

Speaker Change: Can you quantify that for us or is that included in the.

Speaker Change: $17 million, a favorable price cost that you called out Larry.

Speaker Change: In response to another question.

Dave: Yes. It is included in there Dave.

Speaker Change: So what we are referencing relative to the metals business is the fact that in the U S.

Speaker Change: Index cost.

Speaker Change: Index have risen, causing our price adjustment mechanisms to kick down against lower cost inventory now what we haven't tried to build in because it's speculative right. Now is is there going to be incremental to that because of this newly announced.

Larry Hilsheimer: Now, what we haven't tried to build in, because it's speculative right now is, is there going to be incremental to that because of this newly announced increase that you know, to the to the 50% level on tariffs, we've built nothing in for that. And then your first question on page eight. Can you repeat that? Yeah, I mean, it just says in the metal segment, sales were impacted by both price and volume. And I didn't know if that was competitive price, or if you're talking about the positive price No, I'm talking about the positive price development.

Speaker Change: Increase that.

Speaker Change: So the 50% level on tariffs, we built nothing in for that.

Speaker Change: And then your first question on page eight.

Speaker Change: Can you repeat that.

Speaker Change: Yes, I mean, it just says in the metal segment sales were impacted by both price and volume.

Speaker Change: Didn't know if that was competitive price or if youre talking about the positive price impact.

Speaker Change: Talking about the positive price development, yes, the price cost mix was positive the volume was negative.

Larry Hilsheimer: The price-cost mix was positive, the volume was negative. And the negative volume was mainly attributed to North America, which relies on the industrial sectors of chemical. Yep. Okay.

Speaker Change: And the negative volume.

Speaker Change: Mainly attributed to North America, which relies on the industrial sectors of chemical.

Ole Rosgaard: And then maybe What George was trying to get at was integration in the URB business. I mean, I think if I did my math right, you're around 650,000 tons now of URB capacity. And is the goal there to be fully integrated or are you there already? And if and if not, you know, this goes back, Gabe, we've said this all along. Integration is not that important in that business because of the breadth of customers that there are out there, the numbers of them and the small number. Integration value just becomes much less important in that space than it is in the container board space.

Speaker Change: Yes, okay.

Speaker Change: And then maybe.

George Staphos: What George was trying to get at was with integration and the <unk> business. I mean, I think if I did my math right. You are around 650000 tonnes now of of ERP capacity and is the goal there to be fully integrated or are you there already.

Speaker Change: And if not.

Speaker Change: This goes back gay, but we've said this all along integration is not that important in that business because of the breadth of customers.

Speaker Change: That there are out there the numbers of them in the small number integration value.

Speaker Change: That just becomes much less important in that space.

Speaker Change: Then it is in the containerboard space.

Ole Rosgaard: And so, you know, Phil, do you know what our integration level even is on URB? It's over 50 percent. Yeah. OK. But so, yeah, so we're happy with it. If there were if there were really high margin opportunities to acquire integration, we'd do it. I mean, sort of like the coal pack acquisition we did. We've talked about, you know, that's a joint venture we have, you know, and we're thrilled with it because really nice high margin business on the beverage divider business. But it's not something that we need to seek out because of the just general structure of that industry.

Speaker Change: And so.

Speaker Change: Bill do you know what our integration level, even as an ERP, it's over 50% but.

Speaker Change: But so yes, so we're happy with it if there were if there were really high margin opportunities to acquire integration, we do it I mean sort of like the co pack acquisition, we did we've talked about.

Speaker Change: Joining venture we have.

Speaker Change: And we're thrilled with it because really nice high margin business on the beverage can divider business, but it's not something that we need to seek out because of the just general structure of that industry.

Ole Rosgaard: Perfect. Thank you.

Speaker Change: Perfect. Thank you.

George Staphos: One moment for our next question. Our next question will be a follow-up from George Staphos of Bank of America Securities. Your line is open. Hi, thanks for taking my question. Larry, I seem to remember in the discussion that you said on the increase in the guidance on the low end, you were still building in some, I guess, additional volume downside. That might not have been your phrasing, but nonetheless, in the worst case scenario. If I got that correctly, can you tell us a little bit about where you are sort of baking in a little bit worse case on volume?

Speaker Change: Thank you one moment for our next question.

Speaker Change: Our next question will be a follow up from George Staphos of Bank of America Securities. Your line is open.

Speaker Change: Alright, Thanks for taking my question Larry.

Speaker Change: For members of the discussion that you said on the.

Speaker Change: Increase in the guidance.

Speaker Change: Low end.

Speaker Change: You were still build again, some I guess additional volume downside that might not have been your phrasing, but nonetheless in the worst case scenario.

Speaker Change: If I got that correctly and you tell us a little bit about where you are taking.

Larry Hilsheimer: Thank you very much, and good luck in the quarter. Yeah, I mean, yeah, we had, we did have a walk, you know, and, and I gave the numbers on the volume element of that that shows a volume impact of a negative 40. A lot of that within the fiber business already happened in the second quarter. Like we said, each month, it got better through the second quarter. So I was just giving it relative to where we were in Q1. You know, and we already talked about metals being less and also we build in some on polymers.

Speaker Change: Baking in a little bit worst case on volume. Thank you very much and good luck in the quarter.

Speaker Change: Yes, I mean, yes, we had.

Speaker Change: We did have a walk.

Speaker Change: And I gave the numbers on the volume element of that that shows a volume impact of a negative 40.

Speaker Change: A lot of that within the fiber business already happened in the second quarter like we said each month, they got better through the second quarter. So I was just giving it relative to where we were in Q1.

Speaker Change: And we already talked about metals being last and also we build in some on polymers, but again, we build in sort of a worst case scenario and giving our low end guidance. So.

Larry Hilsheimer: But again, we build in sort of worst case scenario in giving our low end guidance. So, you know, what we've provided is, is low end and we have extreme confidence in delivering it. And so those are the factors that I gave you, George. Current demand pretty much was expected a little slower start to fiber in Q2. It got improved. Backlogs are really now about as high as they've been in two years.

Speaker Change: <unk>.

Speaker Change: What we've provided is as low end and we have extreme confidence in delivering it and so.

Speaker Change: Those are the factors that I gave you Georges <unk>.

Speaker Change: Current demand pretty much.

Speaker Change: As expected little slower start to fiber in Q2 guidance improved backlogs are really now about as high as they've been in two years and then cautionary step.

Larry Hilsheimer: And then cautionary stuff. Understood. And on pricing, you mentioned, ultimately, that you still think, you know, $50 to $70 per ton wasn't, again, this is my phrasing, not yours, appropriate relative to the tension in the URB market. With that, if that's correctly phrased, are you still attempting to get a full price hike in the market? Or have you, at this juncture, stopped and you've taken what you've taken?

Speaker Change: Understood and on pricing you mentioned ultimately that you still think.

Speaker Change: Stephanie I'll quick on wasn't again this is my phrasing that yours.

Speaker Change: Appropriate relative to need the attention in the <unk> market.

Speaker Change: With that if thats correctly Youre afraid are you still attempting to get a full price hike in the market or have you at this juncture. It stopped and you think and what you've taken thanks again and good luck in the quarter.

Larry Hilsheimer: Thanks again, and good luck in the quarter. Not anywhere. We're obviously still working that price increase in the market, you know, where we're not on index tight contrast. And to support that, our backlogs are actually stronger than in two plus years at the moment. Understood.

Speaker Change: We're obviously still working that price increase.

Speaker Change: And the market.

Speaker Change: We're not an index type contracts and just call that our backlogs are actually stronger than in two plus years at the moment.

Larry Hilsheimer: Thank you, guys.

Speaker Change: Understood. Thank you guys.

Ole Rosgaard: And I would now like to turn the conference back to Ole Rosgaard for closing remarks. Thank you. I want to say thank you for your time today and also for your continued interest and investment in Greif. We remain committed to continue delivering exceptional results and are focused on accelerating our performance towards our 2027 target of 1 billion EBITDA and 500 million in free cash flow. We're confident that our relentless pursuit of operational excellence and customer-centric growth will create enduring value for all our stakeholders. Thanks again for joining us today.

Roth: And I would now like to turn the conference back to only Roth for closing remarks.

Speaker Change: Thank you.

Roth: I want to say thank you for your time today and also for your continued interest and investment in <unk>, we remain committed to continue delivering exceptional results.

Roth: And are focused on accelerating our performance towards our 2027 target of $1 billion, EBITDA and $500 million and free cash flow.

Roth: We are confident that our relentless pursuit of operational excellence and customer centric growth will create enduring value for all our stakeholders. Thanks again for joining us today.

Roth: Yes.

Operator: And this concludes today's conference call. Thank you for participating. You may now disconnect.

Roth: And this concludes today's conference call. Thank you for participating you may now disconnect.

Roth: Okay.

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Roth: Okay.

Roth: Yes.

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Roth: Okay.

Roth: Yes.

Roth: [music].

Roth: Thanks.

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Roth: Yes.

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Roth: Yes.

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Roth: Sure.

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Roth: No.

Roth: Okay.

Roth: Yes.

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Roth: Yes.

Roth: Okay.

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Operator: Thank you for watching!

Roth: Okay.

Roth: Okay.

Roth: [music].