In This Article:
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Adjusted EBITDA: $145 million, an improvement of $7 million over the prior year quarter.
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Adjusted EPS: $0.39, lower than the prior year due to a non-reoccurrence of a $48 million one-time tax benefit and $14 million higher interest expense.
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Adjusted Free Cash Flow: Net use of $62 million, slightly higher than the prior year due to higher interest expense.
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Polymers Volume Growth: Up 2.7%, driven by small containers and IPC demands.
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Integrated Solutions Volume Growth: Low double-digit growth in caps and enclosures, and paints linings and adhesives.
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Cost Optimization Savings: $5 million identified on a run rate basis, with expectations to achieve $15 million to $25 million by the end of fiscal 2025.
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Mill Closures Impact: Short-term EBITDA headwind of $3 million in fiscal '25, expected to be EBITDA positive by $8 million by 2027.
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2025 Guidance: Low-end guidance raised to $710 million for fiscal '25.
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Free Cash Flow Guidance: Raised by $20 million to $245 million for the full year.
Release Date: February 27, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Greif Inc (NYSE:GEF) announced a $100 million cost optimization initiative, which is expected to enhance profitability.
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The company has identified $5 million in savings on a run rate basis and expects to achieve $15 million to $25 million by the end of fiscal 2025.
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Greif Inc (NYSE:GEF) is focusing on high-growth markets such as agrochemicals, food and beverage, and pharmaceuticals, which are expected to drive future growth.
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The company plans to sell its timberland portfolio to reduce debt, which will improve its financial flexibility.
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Despite a challenging industrial economy, Greif Inc (NYSE:GEF) reported an adjusted EBITDA of $145 million for the quarter, an improvement over the prior year.
Negative Points
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The industrial economy remains uncertain, impacting demand in key sectors such as metals and bulk chemicals.
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Greif Inc (NYSE:GEF) is facing higher SG&A costs due to business reorganization and investments in long-term value creation.
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The closure of two facilities will result in a short-term EBITDA headwind of $3 million in fiscal 2025 due to closure costs.
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Adjusted free cash flow was a net use of $62 million, primarily due to higher interest expenses.
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North America continues to show the weakest demand sentiment compared to other regions, affecting overall performance.
Q & A Highlights
Q: Can you provide clarity on the first quarter results for the fiber segment, as it seemed below expectations despite price increases? A: Lawrence Hilsheimer, CFO, explained that the fiber segment performed in line with their expectations, slightly better even. The confusion arises from the allocation of SG&A costs, which are based on value add. As margins expand in the fiber business, it receives a larger portion of SG&A. This allocation method is consistent with their protocol, and while it may seem confusing, it is a standard practice.