Greif Q1 2026 Greif Inc Earnings Call | AllMind AI Earnings | AllMind AI
Q1 2026 Greif Inc Earnings Call
Operator: 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 one from your touchtone telephone. Please be advised that today's conference call is being recorded. I would now like to hand the conference over to your first speaker today, Bill D'Onofrio, Vice President of Investor Relations and Corporate Development. Please go ahead.
Operator: 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 one from your touchtone telephone. Please be advised that today's conference call is being recorded. I would now like to hand the conference over to your first speaker today, Bill D'Onofrio, Vice President of Investor Relations and Corporate Development. Please go ahead.
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 1 1 from your touchtone. Telephone, please be advised that today's conference call is being recorded. I would now like to hand the conference over to your first Speaker today, build an aerio vice president of investor relations and corporate development. Please go ahead.
Good morning and thank you for joining Grace fiscal. First quarter 2026 earnings conference call today, our CEO Olie rosgardia
Bill D’Onofrio: Good morning, and thank you for joining Greif's Fiscal Q1 2026 Earnings Conference Call. Today, our CEO, Ole Rosgaard, will provide a strategy and market update, followed by our CFO, Larry Hilsheimer, with a review of our financial results. Please turn to slide 2. 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. 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 in the appendix of today's presentation. I'll now turn the call over to Ole on slide 3.
Bill D’Onofrio: Good morning, and thank you for joining Greif's Fiscal Q1 2026 Earnings Conference Call. Today, our CEO, Ole Rosgaard, will provide a strategy and market update, followed by our CFO, Larry Hilsheimer, with a review of our financial results. Please turn to slide 2. 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. 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 in the appendix of today's presentation. I'll now turn the call over to Ole on slide 3.
Please turn to slide 2 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. 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 in the appendix of today's presentation. I'll now turn the call over to Ole on slide 3.
Thank you Bill, and thank you all for joining us. Today we entered 2026 from a position of strength
Despite the still muted industrial backdrop.
Ole Rosgaard: Thank you, Bill, and thank you all for joining us today. We entered 2026 from a position of strength, despite a still muted industrial backdrop. Our Q1 performance demonstrates the progress we are making on two critical fronts, delivering solid financial results in the present, while also making progress on our longer-term Build to Last strategy. During the quarter, volumes performed as anticipated, remaining in line with expectations due to continued softness in the industrial economy. Our EBITDA margin profile continues to improve meaningfully, up 260 basis points year-over-year, which is the result of decisive actions taken on our cost optimization. As a result, adjusted EBITDA increased 24% versus prior year, and our results came in as expected. Based on this performance, we are reaffirming our 2026 guidance.
Ole Rosgaard: Thank you, Bill, and thank you all for joining us today. We entered 2026 from a position of strength, despite a still muted industrial backdrop. Our Q1 performance demonstrates the progress we are making on two critical fronts, delivering solid financial results in the present, while also making progress on our longer-term Build to Last strategy. During the quarter, volumes performed as anticipated, remaining in line with expectations due to continued softness in the industrial economy. Our EBITDA margin profile continues to improve meaningfully, up 260 basis points year-over-year, which is the result of decisive actions taken on our cost optimization. As a result, adjusted EBITDA increased 24% versus prior year, and our results came in as expected. Based on this performance, we are reaffirming our 2026 guidance.
Our q1 performance demonstrates the progress. We are making on 2 critical fronts. Delivering solid Financial results in the present while also making progress on our longer term built, less strategy.
During the quarter volumes performed as anticipated remaining in line with expectations due to continued softness in the industrial economy.
Our ebit margin profile continues to improve meaningfully up.
To 260 basis.
Actions taken on our cost optimization.
As a result, adjusted ebida increased 24% versus prior year and our results came in as expected.
Based on this performance, we are reaffirming our 2026 guidance.
Ole Rosgaard: Following the portfolio rationalization we undertook in 2025, our leverage is now historically low, enabling significant capital flexibility to create shareholder value. In Q1, we completed $130 million of the $150 million share repurchase program we announced three months ago. Given our strong free cash flow projection for the year with a conversion ratio of 50%, we fully anticipate remaining well below a leverage of 2x. Our strong free cash flow generation and balance sheet strength allows us to fund value-creative organic growth, including growth CapEx in our existing, in our existing operations and higher return end markets. As we drive growth externally, we are also accelerating internal transformation.
Following the portfolio rationalization we undertook in 2025, our leverage is now historically low, enabling significant capital flexibility to create shareholder value. In Q1, we completed $130 million of the $150 million share repurchase program we announced three months ago. Given our strong free cash flow projection for the year with a conversion ratio of 50%, we fully anticipate remaining well below a leverage of 2x. Our strong free cash flow generation and balance sheet strength allows us to fund value-creative organic growth, including growth CapEx in our existing, in our existing operations and higher return end markets. As we drive growth externally, we are also accelerating internal transformation.
Following the portfolio, rationalization we undertook in 2025, our Leverage is now historically low enabling significant Capital flexibility to create shareholder value in q1. We completed 130 million of the 150 million. Share we purchased program. We announced 3 months ago.
Given our strong free cash flow projection for the year with a conversion ratio of 50%. We fully anticipate remaining, well, below a leverage of 2 times.
Our strong free cash flow generation and balance sheet strength allows us to fund value. Creative organic growth including growth capex in our existing or in our existing operations and higher return in markets.
As we drive growth externally, we are also accelerating internal transformation.
Our run rate cost optimization is now at 65 million which reflects primarily sgna actions taken early in fiscal 2026 which will benefit Eva for the majority of the year as contemplated in our original guidance.
Ole Rosgaard: Our run rate cost optimization is now at $65 million, which reflects primarily SG&A actions taken early in fiscal 2026, which will benefit EBITDA for the majority of the year, as contemplated in our original guidance. As a reminder, our fiscal 2026 year-end run rate commitment is $80 to 90 million. We are confident in the progress we are making, and we believe we are demonstrating our ability to manage the present while continuing to shape the future. Please turn to slide 4. Our end market performance reflects the reality of broader economic conditions remaining soft. In Customized Polymer Solutions, demand was essentially flat overall. IBC volumes were up low singles, small containers down low singles, and large containers down mid-single digits due to continued industrial softness.
Our run rate cost optimization is now at $65 million, which reflects primarily SG&A actions taken early in fiscal 2026, which will benefit EBITDA for the majority of the year, as contemplated in our original guidance. As a reminder, our fiscal 2026 year-end run rate commitment is $80 to 90 million. We are confident in the progress we are making, and we believe we are demonstrating our ability to manage the present while continuing to shape the future. Please turn to slide 4. Our end market performance reflects the reality of broader economic conditions remaining soft. In Customized Polymer Solutions, demand was essentially flat overall. IBC volumes were up low singles, small containers down low singles, and large containers down mid-single digits due to continued industrial softness.
As a reminder, our fiscal 2026 year end. Run rate commitment is 80 to 90 million.
We are confident in the progress we're making and we believe, we are demonstrating our ability to manage the present while continuing to shape the future.
Please turn to slide 4.
Our in market performance, reflects the reality of broader economic conditions, remaining soft.
And customized polymer Solutions demand was essentially flat overall.
IBC volumes were up low singles, small containers Dow down, low singles and last containers down mid single digits due to continued industrial softness.
Ole Rosgaard: This is consistent with our expectations heading into the year, and we expect small containers to sequentially improve into Q2 as ag seasonality picks up. Durable Metals Solutions remained under pressure with softness across regions, especially with chemical customers. We continue to focus this business on cost discipline and cash generation. Sustainable Fiber Solutions saw volume declines in converting due to North America industrial softness, but the mills ran at solid operating rates throughout the quarter. Innovative Closure Solutions volumes declined high singles from both metal and polymer closure demands, driven by the industrial softness I just spoke on. Importantly, total sales, which reflect sales both direct to third parties, and sold through our polymers and metals businesses, were approximately flat due to strong price mix, with volume down only mid-singles. This shows that our highest-performing products remained the most resilient in the quarter.
This is consistent with our expectations heading into the year, and we expect small containers to sequentially improve into Q2 as ag seasonality picks up. Durable Metals Solutions remained under pressure with softness across regions, especially with chemical customers. We continue to focus this business on cost discipline and cash generation. Sustainable Fiber Solutions saw volume declines in converting due to North America industrial softness, but the mills ran at solid operating rates throughout the quarter. Innovative Closure Solutions volumes declined high singles from both metal and polymer closure demands, driven by the industrial softness I just spoke on. Importantly, total sales, which reflect sales both direct to third parties, and sold through our polymers and metals businesses, were approximately flat due to strong price mix, with volume down only mid-singles. This shows that our highest-performing products remained the most resilient in the quarter.
Chewable Metal Solutions remained under pressure with softness across regions especially with chemical customers.
We continue to focus this business on cost discipline and cash generation.
Sustainable fiber Solutions saw volume declines in converting due to North America industrial softness but the Mills ran at solid operating rates throughout the quarter.
Innovative close closure Solutions, volumes, declines, High singles, from both from both metal and polymer closure demands driven by the industrial softness. I just spoke on
importantly, total sales, which reflects sales both direct to third parties and sold through our polymers. And metals businesses were approximately flat due to strong price, mix with volume down. Only with singles,
This shows that our highest performing products remained the most resilient in the quarter.
Overall.
Q1 performance was consistent with our expectations, and reflects, our ability to improve margins through disciplines execution, even in a muted industrial environments.
Ole Rosgaard: Overall, Q1 performance was consistent with our expectations and reflects our ability to improve margins through disciplined execution, even in a muted industrial environment. With that context, I'll turn it over to Larry to walk through the financials on slide 5.
Overall, Q1 performance was consistent with our expectations and reflects our ability to improve margins through disciplined execution, even in a muted industrial environment. With that context, I'll turn it over to Larry to walk through the financials on slide 5.
With that context, I'll turn it over to Larry to walk through the financials on slide 5. Thank you ollie and hello everyone. Majesty IA for the quarter, increased 24% and margins improved. 260 basis points to 12.3% reflecting improved price cost and a significant benefit of structural cost optimization.
Lawrence Hilsheimer: Thank you, Ole, and hello, everyone. Adjusted EBITDA for the quarter increased 24%, and margins improved 260 basis points to 12.3%, reflecting improved price cost and the significant benefit of structural cost optimization. While Q1 adjusted free cash flow was lower year-over-year, this is primarily due to the inclusion in the prior year of cash flow from recently divested businesses. Excluding that impact, the core cash engine in continuing operations improved year-over-year, supported by EBITDA growth, lower interest expense following deleveraging, and reduced maintenance capital post our containerboard sale. As we discussed last quarter, Q1 is seasonally the lowest quarter for free cash flow, and we have full confidence in our full year low-end adjusted free cash flow guidance of $315 million and approximate 50% conversion expectation.
Larry Hilsheimer: Thank you, Ole, and hello, everyone. Adjusted EBITDA for the quarter increased 24%, and margins improved 260 basis points to 12.3%, reflecting improved price cost and the significant benefit of structural cost optimization. While Q1 adjusted free cash flow was lower year-over-year, this is primarily due to the inclusion in the prior year of cash flow from recently divested businesses. Excluding that impact, the core cash engine in continuing operations improved year-over-year, supported by EBITDA growth, lower interest expense following deleveraging, and reduced maintenance capital post our containerboard sale. As we discussed last quarter, Q1 is seasonally the lowest quarter for free cash flow, and we have full confidence in our full year low-end adjusted free cash flow guidance of $315 million and approximate 50% conversion expectation.
While q1 adjusted free cash flow was lower year-over-year. This is primarily due to the inclusion in the prior year of cash flow from Recently invested businesses
excluding that impact the core cache engine and continuing operations improved year-over-year supported by IBA growth lower interest expense following the leveraging and reduced maintenance Capital post our container board sale
As we discussed last quarter, q1 is seasonally the lowest quarter for free cash flow and we have full confidence in our full year. Low-end, adjusted free cash flow. Guidance of 315 million in approximate 50% conversion expectation.
Our earnings strength showed in our earnings per share, results of 140% year-over-year. Driven by higher, even on lower interest expense, despite year-over-year increased tax expense.
Please turn to slide 6.
Lawrence Hilsheimer: Our earnings strength showed in our earnings per share results up 140% year-over-year, driven by higher EBITDA, lower interest expense, despite year-over-year increased tax expense. Please turn to slide 6. In customized polymers, gross profit was down on approximately flat volumes due to primarily product mix despite cost optimization gains. Durable metals gross profit was slightly up and improved year-over-year, primarily from structural cost optimization. Fiber sales were impacted by the demand softness we anticipated and discussed during our Q4 call. Margins, however, expanded year-over-year, driven by cost discipline and favorable year-over-year pricing and OCC costs. Innovative closure sales is presented as total sales to properly reflect the margin profile, as gross profit reflects profitability of both direct external sales and external sales sold through the metals or polymers businesses.
Our earnings strength showed in our earnings per share results up 140% year-over-year, driven by higher EBITDA, lower interest expense, despite year-over-year increased tax expense. Please turn to slide 6. In customized polymers, gross profit was down on approximately flat volumes due to primarily product mix despite cost optimization gains. Durable metals gross profit was slightly up and improved year-over-year, primarily from structural cost optimization. Fiber sales were impacted by the demand softness we anticipated and discussed during our Q4 call. Margins, however, expanded year-over-year, driven by cost discipline and favorable year-over-year pricing and OCC costs. Innovative closure sales is presented as total sales to properly reflect the margin profile, as gross profit reflects profitability of both direct external sales and external sales sold through the metals or polymers businesses.
In customized polymers, gross profit was down in a price on approximately flat volumes due to primarily product mix despite cost optimization gains.
Durable Metals. Gross profit was slightly up and improved year-over-year primarily from structural cost optimization.
Cyber sales were impacted by the demand softness, we anticipated and discussed during our Q4, call margins. However, expanded year-over-year driven by cost discipline and favorable year-over-year pricing, and OC costs.
Innovative closure sales is presented as total sales to properly, reflect the margin profile as gross profit. Reflects profitability of both direct, external sales, and external sales. So sold through the metals or polymers businesses, net sales does not include the external sales sold through the metals and polymers businesses.
Total sales were roughly flat year-over-year, but gross profit was up due to strong myths and continued benefits from our cost optimization.
Please turn to slide 7.
Lawrence Hilsheimer: Net sales does not include the external sales sold through the metals and polymers businesses. Total sales were roughly flat year-over-year, but gross profit was up due to strong mix and continued benefits from our cost optimization. Please turn to slide 7. We are reaffirming our low-end 2026 guidance of $630 million in adjusted EBITDA and $315 million in adjusted free cash flow. As discussed in Q4, this guidance reflects significant structural cost optimization, year-over-year price cost changes in fiber, as reflected in RISI as of our Q4 call, and net flat volumes for the full year. Our Q1 results came in largely consistent with our guidance expectations. Price and raw material costs were slightly better than planned, volumes and manufacturing costs slightly behind, and SG&A in line.
Net sales does not include the external sales sold through the metals and polymers businesses. Total sales were roughly flat year-over-year, but gross profit was up due to strong mix and continued benefits from our cost optimization. Please turn to slide 7. We are reaffirming our low-end 2026 guidance of $630 million in adjusted EBITDA and $315 million in adjusted free cash flow. As discussed in Q4, this guidance reflects significant structural cost optimization, year-over-year price cost changes in fiber, as reflected in RISI as of our Q4 call, and net flat volumes for the full year. Our Q1 results came in largely consistent with our guidance expectations. Price and raw material costs were slightly better than planned, volumes and manufacturing costs slightly behind, and SG&A in line.
We are reaffirming our low-end 2026. Guidance of 630 million in adjusted Ava, and 315 million in adjusted free, cash flow.
As discussed. In Q4 this guidance, reflects significant, structural cost optimization year-over-year price cost changes in fiber as reflected in Risky as of our Q4 call and net flat volumes for the full year. Our q1 results came in largely consistent with our guidance expectations.
Price, and raw material costs. Were slightly better than planned volumes and Manufacturing costs slightly behind in sgna and life. No individual bucket change was material and the net impact of all these elements was consistent to our expectation. Giving us confidence in reaffirming guidance.
Please turn to slide 8.
Lawrence Hilsheimer: No individual bucket changed with material, and the net impact of all these elements was consistent to our expectation, giving us confidence in reaffirming guidance. Please turn to slide 8. Our capital allocation framework remains focused on pursuing margin-accretive organic growth and delivering high return on invested capital. Our leverage is historically low, and our maintenance CapEx needs are significantly reduced from last year, both of which free up capacity to pursue high return organic growth investments. We intend to continue to increase our dividend over time and have nearly completed the $150 million share repurchase program we announced last quarter. We continue to believe our stock is still one of the most compelling value propositions we can invest in, and as such, in December, our board approved a new $300 million share repurchase authorization.
No individual bucket changed with material, and the net impact of all these elements was consistent to our expectation, giving us confidence in reaffirming guidance. Please turn to slide 8. Our capital allocation framework remains focused on pursuing margin-accretive organic growth and delivering high return on invested capital. Our leverage is historically low, and our maintenance CapEx needs are significantly reduced from last year, both of which free up capacity to pursue high return organic growth investments. We intend to continue to increase our dividend over time and have nearly completed the $150 million share repurchase program we announced last quarter. We continue to believe our stock is still one of the most compelling value propositions we can invest in, and as such, in December, our board approved a new $300 million share repurchase authorization.
Both of which free up capacity to pursue High return organic growth Investments.
We intend to continue to increase our dividend over time and have completed. Nearly completed the 150 million. Share repurchase program, we announced last quarter.
We continue to believe our stock is still 1 of the most compelling value. Propositions, we can invest in, and as such in December, our board approved, a new $300 million, share repurchase, authorization. We will execute on this new authorization in a disciplined manner, incorporating repurchases, as part of our ongoing and balanced Capital allocation with a goal to repurchase up to 2% of our shares outstanding annually.
As Allie mentioned, we can achieve these goals while still remaining well below our 2 times Leverage.
Lawrence Hilsheimer: We will execute on this new authorization in a disciplined manner, incorporating repurchases as part of our ongoing and balanced capital allocation, with a goal to repurchase up to 2% of our shares outstanding annually. As Ole mentioned, we can achieve these goals while still remaining well below our 2x leverage. That balance sheet strength and our strong free cash flow generation allow us to accelerate organic investment, funding gross CapEx within our existing operations and higher return, higher return end markets, even in a muted macro environment. Please turn to slide 9 for closing remarks from Ole.
We will execute on this new authorization in a disciplined manner, incorporating repurchases as part of our ongoing and balanced capital allocation, with a goal to repurchase up to 2% of our shares outstanding annually. As Ole mentioned, we can achieve these goals while still remaining well below our 2x leverage. That balance sheet strength and our strong free cash flow generation allow us to accelerate organic investment, funding gross CapEx within our existing operations and higher return, higher return end markets, even in a muted macro environment. Please turn to slide 9 for closing remarks from Ole.
That balance sheet strength and our strong free cash flow generation. Allow us to accelerate organic investment funding growth, capex within our existing operations and higher return, higher return and markets. Even in a muted macro environment. Please turn to slide 9 for closing remarks from a leaf. Thanks Larry. As we look ahead, we remain grounded in the realities of a still cautious demand environment, but we are not standing still
Ole Rosgaard: Thanks, Larry. As we look ahead, we remain grounded in the realities of a still cautious demand environment, but we're not standing still. We're executing on cost, on capital, and on strategy. The work we've done to transform Greif is not cyclical, it's structural, and it shows how we perform, how we invest, and how we allocate capital. My sincere thanks to our colleagues all around the world for driving this transformation with me. We remain focused on managing the present while also building the next, next era of durable value creation for Greif. Thank you for your support. Operator, please open the lines for questions.
Ole Rosgaard: Thanks, Larry. As we look ahead, we remain grounded in the realities of a still cautious demand environment, but we're not standing still. We're executing on cost, on capital, and on strategy. The work we've done to transform Greif is not cyclical, it's structural, and it shows how we perform, how we invest, and how we allocate capital. My sincere thanks to our colleagues all around the world for driving this transformation with me. We remain focused on managing the present while also building the next, next era of durable value creation for Greif. Thank you for your support. Operator, please open the lines for questions.
We executing on cost on Capitol and on strategy the work we've done to transform growth is not cyclical its structural and it shows how we perform how we invest and how we allocate capital.
My sincere, thanks to our colleagues all around the world for driving this transformation with me.
We remain focused on managing the presence while also building the next next era of durable, value creation for growth.
Thank you for your support, operator. Please open the lines for questions. Certainly. As a reminder, to ask a question, you will need to press star 1, 1 on your telephone and wait for your name to be announced to withdraw your question. Please, press star, 1 1 1, again please, stand by while we compile our Q&A roster,
And our first question will be coming from Gabe. Haiti of Wells Fargo Securities LLC, your line is opening day.
Operator: Certainly. As a reminder, to ask a question, you will need to press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one one again. Please stand by while we compile our Q&A roster. Our first question will be coming from Gabe Hajde of Wells Fargo Securities LLC. Your line is open, Gabe.
Operator: Certainly. As a reminder, to ask a question, you will need to press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one one again. Please stand by while we compile our Q&A roster. Our first question will be coming from Gabe Hajde of Wells Fargo Securities LLC. Your line is open, Gabe.
Uh, only Larry, Phil, good morning. Thanks for taking the question.
Um,
Gabe Hajde: ... Ole, Larry, Bill, good morning. Thanks for taking the question. I wanted to ask, I mean, you guys have been operating sort of in this muted environment now for three years and have done a really good job of kind of hitting the low-end guidance and even moving it up a little bit. I'm curious, Larry, you kind of talked about some costs coming in a little bit better, and that gives you confidence in the full year. But the volume performance here in fiscal Q1 was maybe a little bit even below what we were expecting. So was there anything, I guess, as the quarter progressed from a inventory management standpoint from your customers, that jumps out at you?
Gabe Hajde: ... Ole, Larry, Bill, good morning. Thanks for taking the question. I wanted to ask, I mean, you guys have been operating sort of in this muted environment now for three years and have done a really good job of kind of hitting the low-end guidance and even moving it up a little bit. I'm curious, Larry, you kind of talked about some costs coming in a little bit better, and that gives you confidence in the full year. But the volume performance here in fiscal Q1 was maybe a little bit even below what we were expecting. So was there anything, I guess, as the quarter progressed from a inventory management standpoint from your customers, that jumps out at you?
I I wanted to ask, I mean, you guys have been operating sort of in this uh new environment now for for 3 years and has done a really good job of kind of hitting the low-end guidance and even uh moving it up a little bit, I'm curious. Uh Larry you kind of talked about some costs um coming in a little bit better.
And um that that gives you confidence in in the full year but the volume uh performance here in fiscal q1 was maybe a little bit even below what we were expecting so was there anything I guess? Um as a quarter progressed from a Inventory management standpoint from your customers. Um
That that jumps out at you and then just, you know, being a little bit more back and waited. I'm curious. If you can talk about Trends in, in, in the fiscal Q2, um, such that it kind of implies a pretty good ramp into the back half of the year.
On the volume side.
Gabe Hajde: And then just, you know, being a little bit more back-end weighted, I'm curious if you can talk about trends in the fiscal Q2, such that it kind of implies a pretty good ramp into the back half of the year on the volume side.
And then just, you know, being a little bit more back-end weighted, I'm curious if you can talk about trends in the fiscal Q2, such that it kind of implies a pretty good ramp into the back half of the year on the volume side.
Ole Rosgaard: Yeah, thanks, Gabe. I mean, I have to say that, I mean, demand conditions, they remain muted, and in particular across fiber and steel. And that's like reflecting the continued pressure in both industrial and chemical end markets. In some of our end segments, you will see some seasonality in there, which will, you know, which will pick up, mean that it'll pick up, you know, during the Q2. But importantly, the environment really is not changing. The last week I visited about eight customers, in various parts of the world, and the message is really the same. It... Conditions are still muted, but importantly, that doesn't mean we're standing still, as you quite rightly pointed out.
Ole Rosgaard: Yeah, thanks, Gabe. I mean, I have to say that, I mean, demand conditions, they remain muted, and in particular across fiber and steel. And that's like reflecting the continued pressure in both industrial and chemical end markets. In some of our end segments, you will see some seasonality in there, which will, you know, which will pick up, mean that it'll pick up, you know, during the Q2. But importantly, the environment really is not changing. The last week I visited about eight customers, in various parts of the world, and the message is really the same. It... Conditions are still muted, but importantly, that doesn't mean we're standing still, as you quite rightly pointed out.
I mean, I I have to say that I mean, demand conditions, they remain muted, uh, and in particular across fiber and steel. Um, and that's like reflecting the, the continued pressure in, in both in industrial and chemical end markets, uh, in some of our in segments, you, you will see some seasonality in there. Uh, which will, you know, which will pick up mean that it'll pick up. You know, during the Q2 butts importantly, um, the environment really is is not changing. Um, the last the last week I visited about 8 customers, um, in various parts of the world and and the message is really the same. Uh, it, it conditions are still muted, um, but importantly, that doesn't mean we standing still as you quite rightly pointed out. Um, our
Ole Rosgaard: Our commercial teams are executing with intent, and we are really transforming our commercial team to hunters from farmers. We're deploying capital for organic growth. We're adding capacity in spots where we can see we can sell that capacity. So, we are, you know, being extremely aggressive in the market in that respect.
Our commercial teams are executing with intent, and we are really transforming our commercial team to hunters from farmers. We're deploying capital for organic growth. We're adding capacity in spots where we can see we can sell that capacity. So, we are, you know, being extremely aggressive in the market in that respect.
Commercial teams are executing with intent. And we are, uh, really Transforming Our commercial team to hunters from Farmers. We are deploying capital for organic growth. We we're adding capacity in sports where we can see. We can sell that capacity. So, uh, we are, you know, being extremely aggressive, uh, in in the market in that respect. But yeah, 1 Thing, the sub supplement weren't all he said, is we have seen um uh volume uh trajectory in our small Plastics um, start due to in a very positive way. Yeah.
Lawrence Hilsheimer: Yeah.
Larry Hilsheimer: Yeah.
Ole Rosgaard: Go on.
Ole Rosgaard: Go on.
Lawrence Hilsheimer: One thing to supplement what Ole said is, we have seen a volume trajectory in our small plastics start Q2 in a very positive way.
Larry Hilsheimer: One thing to supplement what Ole said is, we have seen a volume trajectory in our small plastics start Q2 in a very positive way.
Um, I know you guys obviously have the, the recycling operations, it seems like, uh, expectations are still for pretty flat here in the first called half of of 26, anything that you point out for us there.
Ole Rosgaard: Yeah. Yeah.
Ole Rosgaard: Yeah. Yeah.
Gabe Hajde: Okay. And then, I guess on the OCC front, any insights there? I know you guys obviously have the recycling operations. It seems like expectations are still for pretty flat here in the first, call it, half of 2026. Anything that you'd point out for us there?
Gabe Hajde: Okay. And then, I guess on the OCC front, any insights there? I know you guys obviously have the recycling operations. It seems like expectations are still for pretty flat here in the first, call it, half of 2026. Anything that you'd point out for us there?
I just agree with that. Um yeah we that's our feeling as well Gabe.
Okay, and and capex. You've called out a couple of growth projects. It sounds like it's mostly small format Plastics. Um, any particular geography or area um that you want to call it for us.
Lawrence Hilsheimer: I just agree with that. Yeah, that's our feeling as well, Gabe.
Larry Hilsheimer: I just agree with that. Yeah, that's our feeling as well, Gabe.
Gabe Hajde: Okay. And, and CapEx, you've called out a couple of growth projects. It, it sounds like it's mostly small format plastics. Any particular geography or area that you would want to call out for us?
Gabe Hajde: Okay. And, and CapEx, you've called out a couple of growth projects. It, it sounds like it's mostly small format plastics. Any particular geography or area that you would want to call out for us?
Ole Rosgaard: I mean, it's certainly in various regions. We have, in Europe, we are deploying additional capacity where we have, like, really, really good business cases on it. We have, like, in, in Africa, we, we, where I've just been, we have the, like, the whole mining sector in Southern Africa is, I won't call it it's exploding, but it's, it's so- it's picking up, significantly due to the run on precious metals. And a lot of, a lot of the products we manufacture in that part of the world actually goes into, into mines. So, so regionally, you know, when we add capacity in this respect, we, we get the, ROIC on it, almost immediately.
Ole Rosgaard: I mean, it's certainly in various regions. We have, in Europe, we are deploying additional capacity where we have, like, really, really good business cases on it. We have, like, in, in Africa, we, we, where I've just been, we have the, like, the whole mining sector in Southern Africa is, I won't call it it's exploding, but it's, it's so- it's picking up, significantly due to the run on precious metals. And a lot of, a lot of the products we manufacture in that part of the world actually goes into, into mines. So, so regionally, you know, when we add capacity in this respect, we, we get the, ROIC on it, almost immediately.
Additional capacity where we have like really, really good business cases on it. We have like, in, um, in in Africa. We we, well, I've just been, uh, we have like, the whole mining sector in southern Africa, is, I won't call it this exploding, but it's, it's so it's picking up, uh, significantly due to the run on precious metals and a lot of, um, uh, a lot of the products we manufacture in that part of the world actually goes into into mind. So, so that. So originally, you know, when we had capacity in this respect, we we get the, uh, roic on its almost immediately.
Um, we have added capacity, you know, in India, and last year, we did it in Singapore as well, uh, for specific customers, where we end up with long-term contracts. So, I'm confident that, uh, we will see. We will see that continue.
and the opportunities are certainly that
thank you.
Thank you. Our next question.
Ole Rosgaard: We have added capacity, you know, in India, and last year we did it in Singapore as well, for specific customers where we end up with long-term contracts. So I'm confident that we will see, we will see that continue, and the opportunities are certainly there.
We have added capacity, you know, in India, and last year we did it in Singapore as well, for specific customers where we end up with long-term contracts. So I'm confident that we will see, we will see that continue, and the opportunities are certainly there.
Will be coming from George tapos of Bank of America security. Thank you, your line is open.
Everyone, good morning, thanks for the details. Um,
Gabe Hajde: Thank you.
Gabe Hajde: Thank you.
Operator: Thank you. Our next question will be coming from George Staphos of Bank of America Securities. Your line is open.
Operator: Thank you. Our next question will be coming from George Staphos of Bank of America Securities. Your line is open.
George Staphos: Hi, everyone. Good morning. Thanks for the details. On the topic of volume, I was hoping you might be able to give us a bit more color in terms of what you're seeing with metal. You know, recognizing, as you said, maybe things were a little bit weaker, but not terribly out of line. Where are you seeing some strength, if at all, within the end markets, within metal, where are things perhaps weaker? And I remember, Larry and Ole, you had been expecting some pickup to be helpful in housing, if it were to occur, relative to these bits in your business overall. Any thoughts on what you're seeing out of your markets that are exposed to housing at this juncture?
George Staphos: Hi, everyone. Good morning. Thanks for the details. On the topic of volume, I was hoping you might be able to give us a bit more color in terms of what you're seeing with metal. You know, recognizing, as you said, maybe things were a little bit weaker, but not terribly out of line. Where are you seeing some strength, if at all, within the end markets, within metal, where are things perhaps weaker? And I remember, Larry and Ole, you had been expecting some pickup to be helpful in housing, if it were to occur, relative to these bits in your business overall. Any thoughts on what you're seeing out of your markets that are exposed to housing at this juncture?
on the topic of volume, I was hoping you might be able to give us a bit more color in terms of what you're seeing with metal. You know, recognizing as you said, maybe things were a little bit weaker but not terribly out of line. Where are you seeing some strength if at all, within the end, markets within metal where things, perhaps weaker. And I remember Larry and holy you had been expecting some pickup to be helpful in housing if it were to occur relative to these businesses in your business overall. Any, any thoughts on what you're seeing out of your your markets that are exposed to housing at this juncture?
Um, I'll I'll make a comment first. And then, Larry has done some research on housing, so he'll follow up on that. Um, obviously for our medal, the biggest segment that the end segment is chemicals and chemicals. Uh, chemicals. But 1 of their large segments is is housing. Uh, we have not seen any any pick up there.
Ole Rosgaard: I'll make a comment first, and then Larry has done some research on housing, so he'll follow up on that. Obviously, for our metal, the biggest segment that the end segment is chemicals, and chemicals, one of their large segments is housing. We have not seen any pickup there, and, you know, demand remains muted, as I said. And it, it's all, you know, when housing picks up and when we see an improvement there, we will see an improvement. The mining aspect I mentioned earlier,
Ole Rosgaard: I'll make a comment first, and then Larry has done some research on housing, so he'll follow up on that. Obviously, for our metal, the biggest segment that the end segment is chemicals, and chemicals, one of their large segments is housing. We have not seen any pickup there, and, you know, demand remains muted, as I said. And it, it's all, you know, when housing picks up and when we see an improvement there, we will see an improvement. The mining aspect I mentioned earlier,
George Staphos: Yeah
George Staphos: Yeah
Ole Rosgaard: ... could be, could be an important one, because when you do mining, then you don't bring anything out of mine. So all the equipment you have in a mine needs a lot of lube all the time, and that's brought into mines in metal containers. And you leave those metal containers in the mines in disused shafts that become landfills. You don't bring it up. You can't bring polymer products in a mine, because if it catches fire, then you know, you have toxic fumes. But as I said, you know, the metals, we're managing that for cash. So, Larry, comment on the housing side.
Ole Rosgaard: ... could be, could be an important one, because when you do mining, then you don't bring anything out of mine. So all the equipment you have in a mine needs a lot of lube all the time, and that's brought into mines in metal containers. And you leave those metal containers in the mines in disused shafts that become landfills. You don't bring it up. You can't bring polymer products in a mine, because if it catches fire, then you know, you have toxic fumes. But as I said, you know, the metals, we're managing that for cash. So, Larry, comment on the housing side.
Uh, and you know, demand remains muted as I said. Um, and it, it's all, you know, when housing picks up and when we see an improvement there, we will see an improvement. The the mining aspect I mentioned earlier, um, could be, could be an important 1. Because, uh, when you do mining, then you don't bring anything out of mine. So, all the equipment you have in the mine, uh, needs a lot of loop, uh, all the time. And that's brought into Minds in metal containers. And you leave those metal containers in, uh, in the mines. Uh, in this used shafts that come from landfills, you don't bring it up, uh, you can't bring Polymer Products in the mine. Because if, if it catches fire, then, you know, you have toxic fumes. Um, but as I said, you know,
Lawrence Hilsheimer: Yeah, George, it's interesting. There have been a couple headlines in the last couple of months of resale of existing homes ticking up a bit. I think in, like November, it might have been 5%. You know, it's nice to see the headline. It's, it's interesting to get a little bit underneath it. I think we've shared before that existing home sales are at 1995 levels. What's more, I guess, I'll call it interesting, and I, I, I look at it as interesting because I think it truly is an upside, because I do believe it'll turn at some point. Existing home sales today are actually on a population-adjusted basis at the levels of 1982. 1982 had 16% mortgage rates, and we were in a recession. And so, you know, they are really decimated.
Larry Hilsheimer: Yeah, George, it's interesting. There have been a couple headlines in the last couple of months of resale of existing homes ticking up a bit. I think in, like November, it might have been 5%. You know, it's nice to see the headline. It's, it's interesting to get a little bit underneath it. I think we've shared before that existing home sales are at 1995 levels. What's more, I guess, I'll call it interesting, and I, I, I look at it as interesting because I think it truly is an upside, because I do believe it'll turn at some point. Existing home sales today are actually on a population-adjusted basis at the levels of 1982. 1982 had 16% mortgage rates, and we were in a recession. And so, you know, they are really decimated.
The metals we managing that for cash. Uh so but Larry could comment on how the housing size. Yeah, George is. Interesting, there have been a couple headlines in the last couple of months of of resale of existing homes and it's taking up a bit I think and um, like November might have been 5%, uh yeah, it's nice to see the headline. It's it's interesting to get a little bit underneath it. I think we've shared before that existing home, sales are at 1995 levels. What's more, I guess? Uh, I'll call it interesting and I, I, I look at it as interesting because I think it truly is an upside because I do believe it'll turn at some point existing home sales today are
Actually on a population adjusted basis at the levels of 1982.
1982 had 16% mortgage rates and we were in a recession.
Lawrence Hilsheimer: And as we've said before, when people go to sell an existing home, they spend money to fix it up, you know, do all this. The new person moves in, tears out what everybody else fixed up, buys new appliances, paints, buys new furniture. So it really is a big driver for the chemicals industry and us, but it is not there yet. I guess the positive I take of it is, it's become a real issue for the current administration. You know, you can see, you know, Trump talking about you know, not allowing corporate investment in housing. You also see some discussion of portable mortgages, which is an interesting concept that's been in the UK for quite some time.
And as we've said before, when people go to sell an existing home, they spend money to fix it up, you know, do all this. The new person moves in, tears out what everybody else fixed up, buys new appliances, paints, buys new furniture. So it really is a big driver for the chemicals industry and us, but it is not there yet. I guess the positive I take of it is, it's become a real issue for the current administration. You know, you can see, you know, Trump talking about you know, not allowing corporate investment in housing. You also see some discussion of portable mortgages, which is an interesting concept that's been in the UK for quite some time.
You know, you can see you know, Trump talking about um you know, not allowing corporate investment in housing. You you also see some discussion of portable mortgages which is an interesting concept that's been in the UK for quite some time. So there's a lot of focus on it. Um uh but you know really gets down to what are the what's the resale prices? And what's the interest rates?
Okay, I appreciate that. Larry 2. Last ones I'll turn it over. I'll ask them together 1.
Lawrence Hilsheimer: There's a lot of focus on it, but you know, it really gets down to what's the resale prices and what's the interest rates?
There's a lot of focus on it, but you know, it really gets down to what's the resale prices and what's the interest rates?
George Staphos: Okay. I appreciate that. Larry, two last ones. I'll turn it over, and I'll ask them together. One, can you remind us where you think the price cost on fiber will sort of anniversary? Right now, things are good. Is that a second-half issue, or should you be running relatively positively throughout the year? And then, margins in polymers were a little bit weaker than we were expecting. I know gross margin wasn't down as much. EBITDA was down a bit more than we were expecting. What was driving that, and what are the implications going forward? Thank you, guys, and good luck on the floor.
George Staphos: Okay. I appreciate that. Larry, two last ones. I'll turn it over, and I'll ask them together. One, can you remind us where you think the price cost on fiber will sort of anniversary? Right now, things are good. Is that a second-half issue, or should you be running relatively positively throughout the year? And then, margins in polymers were a little bit weaker than we were expecting. I know gross margin wasn't down as much. EBITDA was down a bit more than we were expecting. What was driving that, and what are the implications going forward? Thank you, guys, and good luck on the floor.
Can you remind us where you think the price cost on fiber will sort of anniversary right now? Things are good. Is that a second half issue? Where should you be running relatively positively throughout the year and then margins in Palmer's were a little bit weaker than we were expecting. I know. Gross margin was wasn't down as much, but I was down a bit more than we were expecting. What was driving that? Or what are the implications going forward? Thank you guys and good luck in the course. Yeah, I'll I'll take the um, the yes. Is the answer? On the the fiber question it'll be like, later part of the second half of the year that that'll annualize.
Lawrence Hilsheimer: Yeah, I'll take the... Yes is the answer on the fiber question. It'll be later part of the second half of the year that that'll annualize. On the polymer side, it really is just a mix issue, you know, so we were down somewhat, and we expect this on our small plastics, and our large plastic drums, which are, you know, better margin products than the IBCs, where volumes were up a bit, and medium. So it really was just a mix issue, George, not anything on the cost or the price side.
Larry Hilsheimer: Yeah, I'll take the... Yes is the answer on the fiber question. It'll be later part of the second half of the year that that'll annualize. On the polymer side, it really is just a mix issue, you know, so we were down somewhat, and we expect this on our small plastics, and our large plastic drums, which are, you know, better margin products than the IBCs, where volumes were up a bit, and medium. So it really was just a mix issue, George, not anything on the cost or the price side.
Um, on on the, uh, polymer side, it really is just a mix issue, you know? So we we were down somewhat, um, and we expect this on our, uh, small polymers, um, and our large plastic drums, which are, you know, better margin products than the ibcs. I'm where volumes were
Ole Rosgaard: But George, just to elaborate on that, so polymer gross profit margins, they were slightly lower year-over-year in Q1, primarily driven by the mix and manufacturing costs, as Larry pointed out. Volumes were also lower in small plastics and large plastics, and they are among our higher margin polymer products. And overall, that reduced contribution from those products that had a short-term impact on margins. And then lastly, manufacturing-
Ole Rosgaard: But George, just to elaborate on that, so polymer gross profit margins, they were slightly lower year-over-year in Q1, primarily driven by the mix and manufacturing costs, as Larry pointed out. Volumes were also lower in small plastics and large plastics, and they are among our higher margin polymer products. And overall, that reduced contribution from those products that had a short-term impact on margins. And then lastly, manufacturing-
Up a bit and medium so it really was just a mix issue. Um George not anything um on on the cost or the price item. Look George just elaborate on that. So polymer gross profit margins. There were slight lower uh year-over-year in q1 primarily driven by the mix and Manufacturing cost. As as Larry pointed out volumes were also lower in small Plastics and large Plastics and they are among our uh, higher margin Polymer Products and overall that reduced contribution from those uh products uh that had a short-term impact on margins and then lastly um matter of fact 1 is connected manufacturing costs across our Network were higher. We actively addressing manufacturing costs and we expect that to improve as the year progresses.
Operator: Line one disconnected.
Operator: Line one disconnected.
Ole Rosgaard: Manufacturing costs across our network were higher. We're actively addressing manufacturing costs, and we expect that to improve, as the year progresses.
Ole Rosgaard: Manufacturing costs across our network were higher. We're actively addressing manufacturing costs, and we expect that to improve, as the year progresses.
It just seemed like to keep it margin. Delta was worse than the gross margin Delta. So um anyway I'll I'll turn it over if you had any thoughts on that. We take them. Otherwise good luck in the quart.
Operator: Our opera-
Operator: Our opera-
George Staphos: It just seemed like the EBITDA margin delta was worse than the gross margin delta. So, anyway, I'll turn it over. If you had any thoughts on that, we'd take them. Otherwise, good luck in the quarter.
George Staphos: It just seemed like the EBITDA margin delta was worse than the gross margin delta. So, anyway, I'll turn it over. If you had any thoughts on that, we'd take them. Otherwise, good luck in the quarter.
No, yeah yeah yeah. George is back to, you know, the issue that we've talked about and why we moved to gross profit, it gets to be the allocation issue. Um yeah of you know over again costs is what the driver on the eve of differences.
Thank you guys.
Ole Rosgaard: Oh, okay.
Ole Rosgaard: Oh, okay.
And our next question will be coming from Mike roxland of truist, Securities, your line is open mic.
Lawrence Hilsheimer: No. Yeah. Yeah, George, it's back to, you know, the issue that we've talked about and why we moved to gross profit. It gets to be the allocation issue.
Larry Hilsheimer: No. Yeah. Yeah, George, it's back to, you know, the issue that we've talked about and why we moved to gross profit. It gets to be the allocation issue.
George Staphos: Yeah
George Staphos: Yeah
Lawrence Hilsheimer: ... you know, overhead costs is what the driver on the EBITDA difference is.
Larry Hilsheimer: ... you know, overhead costs is what the driver on the EBITDA difference is.
George Staphos: Got it. Thank you, guys.
George Staphos: Got it. Thank you, guys.
Ole Rosgaard: Thanks.
Ole Rosgaard: Thanks.
Operator: Our next question will be coming from Michael Roxland of Truist Securities. Your line is open, Mike.
Operator: Our next question will be coming from Michael Roxland of Truist Securities. Your line is open, Mike.
Michael Roxland: Thank you, Ole, Larry, Bill, and Dan, for taking my questions. Just wanted to follow up quickly on volumes. Obviously declined about 5% in Q1. The EBITDA guide assumes, you know, flat, maybe slightly up volumes, for the year. What gives you confidence that volumes are going to improve? And if volumes do remain weak, and this was, you know, when I say weak, maybe flat, down, slow, single digits, what does that imply for your EBITDA guide for the year?
Michael Roxland: Thank you, Ole, Larry, Bill, and Dan, for taking my questions. Just wanted to follow up quickly on volumes. Obviously declined about 5% in Q1. The EBITDA guide assumes, you know, flat, maybe slightly up volumes, for the year. What gives you confidence that volumes are going to improve? And if volumes do remain weak, and this was, you know, when I say weak, maybe flat, down, slow, single digits, what does that imply for your EBITDA guide for the year?
Uh, thank you ollie, Larry Bill and Dan, for taking my questions. Um just wanted to follow up quickly on on, on volumes. Um obviously the client about 5% in in 1 Q, the Eva that guide assumes, you know, flat maybe slightly up volumes. Uh, for the year what gives you confidence that that volume's are going to improve? And if volumes do, remain weak, can just talk, you know, when I say weak maybe Flats down slow single digits. What does that imply for your ebit? Dog guide for the year.
Lawrence Hilsheimer: Yeah, you know, I'll hit the EBITDA guide for the year. I'd just repeat, we are extremely confident, and it's why we go with the low-end guidance. You know, there's various elements that go into that. But on the volume side, you know, we had expected Q1 to be low. You know, in some products, it was a little lower. As I said earlier, we're seeing a pickup in the small plastic volumes going now. And as Ole mentioned, and he'll add something here, too, but you know, we're very optimistic about our commercial team and the incentives that we put in place and the early things that we're seeing out of those efforts. But, Ole?
Larry Hilsheimer: Yeah, you know, I'll hit the EBITDA guide for the year. I'd just repeat, we are extremely confident, and it's why we go with the low-end guidance. You know, there's various elements that go into that. But on the volume side, you know, we had expected Q1 to be low. You know, in some products, it was a little lower. As I said earlier, we're seeing a pickup in the small plastic volumes going now. And as Ole mentioned, and he'll add something here, too, but you know, we're very optimistic about our commercial team and the incentives that we put in place and the early things that we're seeing out of those efforts. But, Ole?
Yeah, I, you know, I I have to even the guy for the year. I just repeat. We are extremely confident in our and it's why we go with the low-end guidance. We, you know, there's, there's um, various elements that go into that, but on the volume side, um, you know, we had expected q1 to be low. Um, you know, in some products there's a little lower. As I said earlier, we're seeing to pick up in the small, plastic volumes going now, and as only mentioned and he'll add something here too. But the, uh, you know, the we're very optimistic about our commercial, um, um, team and the incentives that we put in place in the early early things that we're seeing out of those efforts. But totally yeah. For for first, the bridge was never built on q1 year over year.
Ole Rosgaard: Yeah. First, the bridge was never built on Q1 year-over-year performance. It reflects how we expect volumes to progress and normalize across the year. And then, you know, as we've established, Q1 came in softer than last year, but nothing we saw changes our full year view. And importantly, as Larry says, our commercial teams, they remain extremely active. As I mentioned, we have done a lot of organizational changes in the company. We have transformed or are transforming our global commercial organization from farmers to hunters. We are changing, or have been changing the incentive program, for that. We are targeting CapEx, where we see organic growth opportunities, and we do that in a very disciplined way, where we targeting short-term gains.
Ole Rosgaard: Yeah. First, the bridge was never built on Q1 year-over-year performance. It reflects how we expect volumes to progress and normalize across the year. And then, you know, as we've established, Q1 came in softer than last year, but nothing we saw changes our full year view. And importantly, as Larry says, our commercial teams, they remain extremely active. As I mentioned, we have done a lot of organizational changes in the company. We have transformed or are transforming our global commercial organization from farmers to hunters. We are changing, or have been changing the incentive program, for that. We are targeting CapEx, where we see organic growth opportunities, and we do that in a very disciplined way, where we targeting short-term gains.
Has been changing the incentive program, uh, for that, we are targeting uh capex where we see uh organic growth opportunities. And we do that in a very disciplined way, uh, uh, where we targeting uh short-term, uh, gains. Um, and basically, we've already seen, you know, customer wins and share wallet gains with existing customers, which again, supports our confidence in um, volume progressing as the year unfolds.
Ole Rosgaard: Basically, we've already seen, you know, customer wins and share wallet gains with existing customers, which again, supports our confidence in volume progressing as the year unfolds.
Basically, we've already seen, you know, customer wins and share wallet gains with existing customers, which again, supports our confidence in volume progressing as the year unfolds.
That's very helpful guys. So basically what it comes down to is volumes, we're weaker in 1 Cube, but given some of the commercial activities that you're seeing, you think you those winds should should creep up or should should occur sometime in the back half that are allow you to, to achieve your volume guide for the year is, is that fair? Absolutely.
Michael Roxland: That's very helpful. So basically, what it comes down to is volumes were weaker in Q1, but given some of the commercial activities that you're seeing, you think those wins should creep up or should occur sometime in the back half, that'll allow you to achieve your volume guide for the year. Is that fair?
Michael Roxland: That's very helpful. So basically, what it comes down to is volumes were weaker in Q1, but given some of the commercial activities that you're seeing, you think those wins should creep up or should occur sometime in the back half, that'll allow you to achieve your volume guide for the year. Is that fair?
Perfect. Got it. Thank you. And this is 1, quick follow-up. Um, with the uh, you know, just following up on George's question regarding the price cost spread in in, in fiber. Um,
Lawrence Hilsheimer: Absolutely. That's fair, absolutely.
Larry Hilsheimer: Absolutely. That's fair, absolutely.
Michael Roxland: Perfect, got it. Thank you. And just one quick follow-up. With the, you know, just following up on George's question regarding the price cost spread in, in, in fiber. I thought that was gonna be more of, I thought you lap that in fiscal Q2, and if that's the case, I mean, what is, what is the company doing to address that, that headwind as you, as you, as you lap that?
Michael Roxland: Perfect, got it. Thank you. And just one quick follow-up. With the, you know, just following up on George's question regarding the price cost spread in, in, in fiber. I thought that was gonna be more of, I thought you lap that in fiscal Q2, and if that's the case, I mean, what is, what is the company doing to address that, that headwind as you, as you, as you lap that?
I thought that was going to be more of. I thought you laughed at in fiscal 2q. And if that's the case, and then this is what is, what is the company doing to address that that headwind as you as as you lap that
Yeah, I mean, you know you saw the, uh, the 40 40 dollars. A ton in herb was last May rolled in and June, and July and the OCC was through the last part of the year. So it's that second half of our year with more of it coming in the, in the uh in the in the last quarter, just because of the way, some of the contractual pass throughs work, that that's all it is, Michael.
Lawrence Hilsheimer: Yeah, I mean, you know, you saw the $40 a ton in URB was last May, rolled in in June and July, and the OCC was through the last part of the year. So it's that second half of our year, with more of it coming in the last quarter, just because of the way some of the contractual pass-throughs work. That's all it is, Michael.
Larry Hilsheimer: Yeah, I mean, you know, you saw the $40 a ton in URB was last May, rolled in in June and July, and the OCC was through the last part of the year. So it's that second half of our year, with more of it coming in the last quarter, just because of the way some of the contractual pass-throughs work. That's all it is, Michael.
Got it. Okay, perfect. And then 1 1 last question just um,
You mentioned. I think last quarter deploying uh a a very unique proprietary form of barrier technology. The only you said you guys are the only ones to have that wondering. If you could provide any more color around the technology, what it does, the competitive Advantage, it gives you and and have you received any orders on on that? We are using that technology.
Michael Roxland: Got it. Okay, perfect. And then one last question. Just, you mentioned, I think, last quarter, deploying a very unique proprietary form of barrier technology. Only you, you said you guys are the only ones to have that. Wondering if you could provide any more color around the technology, what it does, the competitive advantage it gives you, and have you received any orders on that, or using that technology?
Michael Roxland: Got it. Okay, perfect. And then one last question. Just, you mentioned, I think, last quarter, deploying a very unique proprietary form of barrier technology. Only you, you said you guys are the only ones to have that. Wondering if you could provide any more color around the technology, what it does, the competitive advantage it gives you, and have you received any orders on that, or using that technology?
Ole Rosgaard: Yeah, it's called a SiOx technology. We have received orders. We have the first machine is fully operational in France. We have three more machines in production that will be deployed during this year, and that will be followed by further machines. And so far, very good, actually.
Ole Rosgaard: Yeah, it's called a SiOx technology. We have received orders. We have the first machine is fully operational in France. We have three more machines in production that will be deployed during this year, and that will be followed by further machines. And so far, very good, actually.
Yeah, it's called The Scopes technology. We have received the orders. We, we have the the first machine is fully operational in France. We have 3 more machines uh in production, that will be deployed during this year and that will be followed by further machines and, uh, so far very good actually. Yeah. The financial impact for this year is not significant Michael, but we are very, very optimistic about this technology and its impact and we ran ramping it up.
Thank you and good luck in the quarter.
Lawrence Hilsheimer: Yeah, the financial impact for this year is not significant, Michael, but we are very, very optimistic about this technology and its impact, and we're ramping it up.
Larry Hilsheimer: Yeah, the financial impact for this year is not significant, Michael, but we are very, very optimistic about this technology and its impact, and we're ramping it up.
Michael Roxland: Thank you, and good luck in the quarter.
Michael Roxland: Thank you, and good luck in the quarter.
Lawrence Hilsheimer: Thanks, Mike.
Larry Hilsheimer: Thanks, Mike.
Operator: Our next question will be coming from Matt Roberts of Raymond James. Matt, your line is open.
Operator: Our next question will be coming from Matt Roberts of Raymond James. Matt, your line is open.
Matt Roberts: Hi, Ole, Larry, Bill, thank you for the time. I'm gonna start in fiber. I think you noted converting was down mid-single digits this quarter, which I believe is down from low single-digit decline seen last quarter. And on the operating rates, I believe you said last quarter was 90%, quarter before that, 95, and now solid. So I mean, where are operating rates trending now versus those prior two quarters, and does that support price that was previously taken? And in tubes and cores, I understand you're understandably lapping some paperboard supply cuts that were in 2025. When do we lap those? When should we expect tube and cores and fiber more generally to return to growth?
Matt Roberts: Hi, Ole, Larry, Bill, thank you for the time. I'm gonna start in fiber. I think you noted converting was down mid-single digits this quarter, which I believe is down from low single-digit decline seen last quarter. And on the operating rates, I believe you said last quarter was 90%, quarter before that, 95, and now solid. So I mean, where are operating rates trending now versus those prior two quarters, and does that support price that was previously taken? And in tubes and cores, I understand you're understandably lapping some paperboard supply cuts that were in 2025. When do we lap those? When should we expect tube and cores and fiber more generally to return to growth?
Hi only Larry Bill uh thank you for the time. Um we're gonna start in fiber, um I think you noted converting was down mid single digits this quarter which I believe is down from low, single digit, decline seen last quarter. Um, and on the operating rates, I believe you said last quarter was 90% quarter before that 95 and now solid. So I mean, we're operating rates trending, now versus those prior 2 quarters and does that support price that was previously taken and in 2 Vision Kors, I you understandably lapping some paper board Supply cuts that were in 2025. When do we lap those when should we expect tube and cores in fiber more generally to return to growth.
Yeah, so I mean, first of all, if you are emails, uh, they took about I think about 14,000 tons of economic downtime in q1. Uh but that, that was all due to converting softness.
Ole Rosgaard: Yeah. So I mean, first of all, the URB mills, they took about, I think about 14,000 tons of economic downtime in Q1, but that, that was all due to converting softness. And then converting saw similar MSD declines. And the largest driver is that basically the paper industry, where we supply cores for, SDS and CRB grades. We do expect fiber profitability to improve, sequentially. There's a lot of activities in the pipeline.
Ole Rosgaard: Yeah. So I mean, first of all, the URB mills, they took about, I think about 14,000 tons of economic downtime in Q1, but that, that was all due to converting softness. And then converting saw similar MSD declines. And the largest driver is that basically the paper industry, where we supply cores for, SDS and CRB grades. We do expect fiber profitability to improve, sequentially. There's a lot of activities in the pipeline.
Um and then converting Source similar MSD declines and the largest driver is that basically the paper industry where we Supply costs for SDS and crb grades um we do expect fiber profitability to improve uh sequentially. Uh there's a lot of uh activities in in the pipeline.
Matt Roberts: Thanks, Larry, that's helpful. On the price cost, I know, Larry, last quarter, you gave a bridge at the $30 million in price cost. I think 18 of that was in the URB price and lower OCC. It sounds like there aren't any changes in expectations from OCC or URB price, but any other impacts or puts and takes from non-materials impacts, whether that be energy or freight?
Matt Roberts: Thanks, Larry, that's helpful. On the price cost, I know, Larry, last quarter, you gave a bridge at the $30 million in price cost. I think 18 of that was in the URB price and lower OCC. It sounds like there aren't any changes in expectations from OCC or URB price, but any other impacts or puts and takes from non-materials impacts, whether that be energy or freight?
Thanks, that's helpful and um on the price cost. I know Larry. Last last score you gave a Bridget is 30 million in price cost. I think 18 of that was in the herb price in lower OCC. It sounds like there aren't any changes in expectations from OCC or herb price? Um but any other impacts or puts and takes from non-material impacts, whether that be energy or Freight
Lawrence Hilsheimer: No, I mean, it's, you know, there's a lot of things going on. I mean, obviously, Matt, I mean, you know, take like we're doing a really great job on our cost takeouts. I mean, you've probably read about healthcare cost inflation across all industries in the US, so you know, we're beating those inflation impacts and still delivering on what we have. But in terms of, you know, any differences relative to what we laid out in our Q4 guidance walk, there aren't any other than just, you know, getting down to, for example, we've now cut 10% of our headcount on the professional side. We're up to 220 headcount reductions. We continue to work that, and those are focused on our overall objective, but also overcoming inflationary challenges.
Larry Hilsheimer: No, I mean, it's, you know, there's a lot of things going on. I mean, obviously, Matt, I mean, you know, take like we're doing a really great job on our cost takeouts. I mean, you've probably read about healthcare cost inflation across all industries in the US, so you know, we're beating those inflation impacts and still delivering on what we have. But in terms of, you know, any differences relative to what we laid out in our Q4 guidance walk, there aren't any other than just, you know, getting down to, for example, we've now cut 10% of our headcount on the professional side. We're up to 220 headcount reductions. We continue to work that, and those are focused on our overall objective, but also overcoming inflationary challenges.
On what we have. But in terms of, you know, um any differences relative to what we laid out, um in in our Q4 guidance, walk there, there aren't any other than just um you know getting down to for example we've now cut 10% of our headcount on, on the on the professional side, we're up to 220 head headcount, reductions, we can continue to work that and and those are uh focused on our overall objective but also overcoming inflationary challenges.
Matt Roberts: That's very helpful, Larry. Thank you. And if I can get one last one in, just on the repurchases. I think, yeah, you said $130 million, the $150 million was exhausted during the quarter. Does that remaining $20 million, is that still outstanding or utilized quarter to date, or was it replaced by the $300 million? And on that $300 million, I know you're committed now to that 2% annual buyback. Should we expect any more in 2026, or is that more 2027, given you've already about doubled that target so far in 2026? Thank you.
Matt Roberts: That's very helpful, Larry. Thank you. And if I can get one last one in, just on the repurchases. I think, yeah, you said $130 million, the $150 million was exhausted during the quarter. Does that remaining $20 million, is that still outstanding or utilized quarter to date, or was it replaced by the $300 million? And on that $300 million, I know you're committed now to that 2% annual buyback. Should we expect any more in 2026, or is that more 2027, given you've already about doubled that target so far in 2026? Thank you.
Ole Rosgaard: ... Yeah, I'll do the first part. So we've done 130, and we still have 20 remaining. That will probably be concluded, you know, up through the summer here. The price of the B shares obviously helps that at the moment, so... And then what happens next, I'll leave for Larry to-
Ole Rosgaard: ... Yeah, I'll do the first part. So we've done 130, and we still have 20 remaining. That will probably be concluded, you know, up through the summer here. The price of the B shares obviously helps that at the moment, so... And then what happens next, I'll leave for Larry to-
That's very helpful there. Thank you. And if I could get 1 last 1 in, um, just on on the repurchases, um, I think. Yeah, you said 1:30, the 150 was exhausted during the quarter. Um, does that remaining 20? Is that still outstanding standing utilized quarter of the date? Or was it replaced by the 300 million and on that 300 million? I know you're committed now to that 2% annual buyback. Should we expect any more in 2026 or is that more 2027? Giving you've already about double that Target so far in 2016. Thank you. Yeah, I'll do the first part. Um, the so with on 130 and we still have a 20 remaining um, that that will probably be completed, you know, off to the summer here, the the price of of, of, of the BCS obviously helps that at the moment. So, um, and then what happens next? I'll, I'll leave Valeria to, yeah. I mean, this is so the the 300 million incremental to the 150, Matt, and you
Lawrence Hilsheimer: Yeah, I mean, so the $300 million is incremental to the $150 million, Matt. And yeah, Dan, I, our go-forward intention is to, you know, do roughly 2%. But, you know, we, we think our stock's a very good buy, and we could end up deciding to talk to our board about more than that, but we're committed to the 2%, you know, level going forward, and obviously subject to our board's approval.
Larry Hilsheimer: Yeah, I mean, so the $300 million is incremental to the $150 million, Matt. And yeah, Dan, I, our go-forward intention is to, you know, do roughly 2%. But, you know, we, we think our stock's a very good buy, and we could end up deciding to talk to our board about more than that, but we're committed to the 2%, you know, level going forward, and obviously subject to our board's approval.
Yeah, then I I I go forward intention is to, you know, do roughly 2% but you know we we think our stocks are very good buy and we could end up deciding to talk to our board about more than that, but we're committed to the 2%, you know, level going forward and um obviously subject to our board's approval.
Excellent. Thank you. All again for the time and taking the questions.
As a reminder to ask a question. Please press star 1, 1 on your telephone, and wait, for your name to be announced.
Our next question will be coming from Danielle Herman as the Dodie and Company. Your line is open.
Matt Roberts: Excellent. Thank you all again for the time and taking the questions.
Matt Roberts: Excellent. Thank you all again for the time and taking the questions.
Operator: As a reminder, to ask a question, please press star one one on your telephone and wait for your name to be announced. Our next question will be coming from Daniel Harriman of Sidoti & Company. Your line is open.
Operator: As a reminder, to ask a question, please press star one one on your telephone and wait for your name to be announced. Our next question will be coming from Daniel Harriman of Sidoti & Company. Your line is open.
Daniel Harriman: Hey, guys. Good morning. Thank you for taking my questions. I wanted to follow up on the prior share repurchase question, and you guys have been very clear in recent calls and your focus to deploy capital where you see the highest returns. So with the $130 million purchase in the recent quarter, I'm just curious, how should we think about the cadence of the $300 million authorization versus potential acquisitions as you guys look to reach some of your longer term EBITDA and free cash flow targets?
Daniel Harriman: Hey, guys. Good morning. Thank you for taking my questions. I wanted to follow up on the prior share repurchase question, and you guys have been very clear in recent calls and your focus to deploy capital where you see the highest returns. So with the $130 million purchase in the recent quarter, I'm just curious, how should we think about the cadence of the $300 million authorization versus potential acquisitions as you guys look to reach some of your longer term EBITDA and free cash flow targets?
Hey guys. Good morning. Thank you for taking my questions. I wanted to follow up on, on the prior. Um, share. We purchase question and you guys have been very clear in recent calls and your focus to deploy Capital where you see the highest returns. So with the 130 purchase and the recent quarter, I'm just curious. How should we think about the Cadence of the $300 million authorization versus potential Acquisitions? As you guys look to reach some of your longer term, Ava and free cash flow targets,
Yeah. Daniel, I mean, we'll we'll be, you know, flexing depending on, you know, what we see in terms of the markets and and you know, where our stock price is and what's going on in our, our m&a pipeline which, you know, uh, you know, we continue to have a robust pipeline of, you know, tuck in small tuck in deals. But our big focus is organic growth. But we're we're also
Lawrence Hilsheimer: Yeah, Daniel, I mean, we'll be, you know, flexing depending on, you know, what we see in terms of the markets and, you know, where our stock price is and what's going on in our M&A pipeline, which, you know, we continue to have a robust pipeline of, you know, tuck-in, small tuck-in deals, but our big focus is organic growth, but we're also active. So we'll just be reacting to, you know, where the market is and where we're at on capital deployment needs, internal and external.
Larry Hilsheimer: Yeah, Daniel, I mean, we'll be, you know, flexing depending on, you know, what we see in terms of the markets and, you know, where our stock price is and what's going on in our M&A pipeline, which, you know, we continue to have a robust pipeline of, you know, tuck-in, small tuck-in deals, but our big focus is organic growth, but we're also active. So we'll just be reacting to, you know, where the market is and where we're at on capital deployment needs, internal and external.
Active. Um, so we'll just be reacting to, you know, where where the market is, and where we're at, on Capital deployment needs, internal and external.
Ole Rosgaard: If I could just supplement that on, on deploying capital. Our focus is organic growth, no doubt about it. And as and when we see an M&A deal that can complement that, and it's a tuck-in, then and it fits our criteria, then we will approach that in a disciplined way. But our sole or not, our primary focus is organic growth.
Ole Rosgaard: If I could just supplement that on, on deploying capital. Our focus is organic growth, no doubt about it. And as and when we see an M&A deal that can complement that, and it's a tuck-in, then and it fits our criteria, then we will approach that in a disciplined way. But our sole or not, our primary focus is organic growth.
If I, if I could just supplement that on uh on deploying Capital, our focus is organic growth. Uh no doubt about it and as and when uh we see an m&a deal that can complement that and it's a talking then and it fits our criteria. Then we will approach that in a disciplined way. Um, but our
Soul or not. Our primary focus is organic growth.
All right, thanks guys. And congrats on your continued execution.
The conference back to ollie, rosgardia.
Thank you very much and thank you again, for your interest. And for your time and for your questions, today, gri has entered the fiscal 2026 with strong momentum.
Daniel Harriman: All right. Thanks, guys, and congrats on your continued execution.
Daniel Harriman: All right. Thanks, guys, and congrats on your continued execution.
Lawrence Hilsheimer: Thanks, Daniel.
Larry Hilsheimer: Thanks, Daniel.
Operator: I would now like to turn the conference back to Ole Rosgaard for closing remarks.
Operator: I would now like to turn the conference back to Ole Rosgaard for closing remarks.
Ole Rosgaard: Thank you very much, and thank you again for your interest, and for your time, and for your questions today. Greif has entered fiscal 2026 with strong momentum. Our 24% increase in EBITDA dollars, expanding EBITDA margins, and meaningful cost reduction, cost reductions demonstrate our ability to drive returns in a muted demand environments. We have also reduced leverage to 1.2 times, while reducing or returning approximately $130 million to shareholders through disciplined share repurchases, as discussed. This performance underscores the strength of our portfolio, the effectiveness of our operating model, and our ability to convert execution into results. Our strategy is working, and we are positioned to continue delivering durable earnings and cash flow improvements. Have a great rest of your day. Thank you.
Ole Rosgaard: Thank you very much, and thank you again for your interest, and for your time, and for your questions today. Greif has entered fiscal 2026 with strong momentum. Our 24% increase in EBITDA dollars, expanding EBITDA margins, and meaningful cost reduction, cost reductions demonstrate our ability to drive returns in a muted demand environments. We have also reduced leverage to 1.2 times, while reducing or returning approximately $130 million to shareholders through disciplined share repurchases, as discussed. This performance underscores the strength of our portfolio, the effectiveness of our operating model, and our ability to convert execution into results. Our strategy is working, and we are positioned to continue delivering durable earnings and cash flow improvements. Have a great rest of your day. Thank you.
Our 24% increase in even our dollars expanding, even our margins and meaningful cost, reduction, uh cost reductions demonstrate our ability to drive returns in the muted demand environments.
We we have also reduced leverage to 1.2 times while reducing or returning, approximately 130 million to shareholders through disciplined, share repurchases, as discussed.
This performance, underscores, the strength of our portfolio, the effectiveness of our operating model and our ability to convert execution into results. Our strategy is working and we are positioned to continue, delivering durable earnings, and cash flow improvements. Have a great rest of your day. Thank you.
Operator: This concludes today's program. Thank you for participating. You may now disconnect.
Operator: This concludes today's program. Thank you for participating. You may now disconnect.
