Core Viewpoint - Greif, Inc. has announced the divestiture of its Containerboard business for $1.8 billion to Packaging Corporation of America, which aligns with its strategy to enhance capital efficiency and focus on growth priorities [2][4]. Financial Impact - The cash proceeds from the divestiture will be allocated to debt repayment, resulting in a pro-forma leverage ratio below 2.0x after closing, with further reductions expected from the planned divestiture of Greif's timberland business [3]. - This transaction is expected to unlock value-creation opportunities and enhance capital utilization, reducing recurring capital needs [8]. Strategic Rationale - The sale is part of Greif's "Build to Last" strategy, aimed at sharpening the company's portfolio and advancing growth priorities [4]. - The remaining material solutions will maintain leadership positions to drive margin expansion and cash flow generation [4]. Conference Call - Greif will host an investor call on July 1, 2025, to discuss the rationale for the divestment and its impact on proforma business operations [5].

Group 1 - Shore Bancshares, Inc. (SHBI) has a Zacks Rank 1 and its current year earnings estimate increased by 7.1% over the last 60 days [1] - Shore's shares gained 15.1% over the last three months, outperforming the S&P 500's 10% advance [1] - Worthington Enterprises, Inc. (WOR) has a Zacks Rank 1 with a current year earnings estimate increase of 16.2% over the last 60 days [2] - Worthington's shares gained 27.4% over the last three months, significantly outperforming the S&P 500's 10% advance [2] - Greif, Inc. (GEF) holds a Zacks Rank 1 and its current year earnings estimate increased by 6.9% over the last 60 days [3] - Greif's shares gained 18% over the last three months, also outperforming the S&P 500's 10% advance [3] - All three companies possess strong momentum characteristics, with Shore and Worthington having Momentum Scores of A, while Greif has a Momentum Score of B [1][2][3]

Group 1 - Greif (GEF) has a Zacks Rank of 2 (Buy), indicating a positive earnings outlook, while Packaging Corp. (PKG) has a Zacks Rank of 4 (Sell) [3] - The Zacks Rank system favors stocks with strong earnings estimate revisions, which is a key factor for value investors [2][3] - GEF has a forward P/E ratio of 16.16, compared to PKG's forward P/E of 18.56, suggesting GEF may be undervalued [5] Group 2 - GEF's PEG ratio is 1.64, indicating a better valuation relative to its expected earnings growth compared to PKG's PEG ratio of 2.51 [5] - GEF has a P/B ratio of 1.39, significantly lower than PKG's P/B of 3.77, further supporting GEF's valuation advantage [6] - Based on various valuation metrics, GEF holds a Value grade of A, while PKG has a Value grade of C, indicating GEF is the superior value option [6]

Consumer Discretionary Sector Overview - The consumer discretionary sector typically thrives during strong economic conditions, characterized by low interest rates and robust job growth [1] - Recent employment data indicates a decline in job additions, with only 139,000 jobs added in May 2025 compared to 272,000 in May 2024, suggesting potential challenges for the sector [2] - The Consumer Discretionary Select Sector SPDR Fund (XLY) is down over 2% year-to-date, contrasting with a 3% increase in the broader S&P 500 [3] Greif Inc. Performance - Greif Inc. has a 12-month stock price forecast of $74.17, indicating a 14.15% upside potential based on 7 analyst ratings, with a current price of $64.97 [3] - The company has a strong dividend yield of 3.36% and a payout ratio of 60.85%, reflecting its stability over nearly 140 years in business [4] - Greif's earnings per share (EPS) of $1.19 exceeded analyst expectations by 11 cents, with quarterly revenue showing a year-over-year increase of just over 1% [5] - The company is targeting $25 million in savings for the current fiscal year and $100 million by the end of fiscal 2027 through cost optimization efforts [6] - Greif's operational structure mitigates tariff impacts by selling products close to manufacturing locations, enhancing its competitive position [7] O-I Glass Inc. Performance - O-I Glass has a 12-month stock price forecast of $15.88, representing a 16.56% upside based on 8 analyst ratings, with a current price of $13.62 [9] - The company benefits from increasing demand for glass containers as consumers shift away from plastics, positioning it well for future growth [9] - O-I's Fit to Win program has successfully improved operational efficiency, contributing $61 million in benefits and leading to an adjusted EPS of 40 cents, surpassing analyst predictions by 22 cents [10] - Future projections indicate adjusted earnings for 2025 could surge up to 85% above 2024 levels, with strong analyst support reflected in six Buy ratings [11] Silgan Holdings Inc. Performance - Silgan Holdings has a 12-month stock price forecast of $63.11, indicating a 15.42% upside based on 9 analyst ratings, with a current price of $54.68 [12] - The company reported an 11% year-over-year revenue increase, with EPS of 82 cents exceeding expectations by 4 cents [13] - Despite strong performance, recent executive turnover introduces uncertainty, particularly in the U.S. metal containers business [14] - Analysts remain optimistic, with all nine ratings for Silgan shares classified as Buy [15]

[Greif Reports Fiscal Second Quarter 2025 Results](index=1&type=section&id=Greif%20Reports%20Fiscal%20Second%20Quarter%202025%20Results) [Fiscal Second Quarter 2025 Financial Highlights](index=1&type=section&id=Fiscal%20Second%20Quarter%202025%20Financial%20Highlights) Greif reported strong Q2 2025 results with adjusted net income up **42.8%** to **$68.7 million** and Adjusted EBITDA up **26.0%** to **$213.9 million**, improving liquidity and reducing leverage to **3.3x** Q2 2025 Key Financial Metrics (vs. Q2 2024) | Metric | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | Net Income | $47.3M | $44.4M | +6.5% | | Net Income (Adjusted) | $68.7M | $48.1M | +42.8% | | Diluted Class A EPS | $0.82 | $0.77 | +6.5% | | Diluted Class A EPS (Adjusted) | $1.19 | $0.83 | +43.4% | | Adjusted EBITDA | $213.9M | $169.7M | +26.0% | | Net Cash from Operating Activities | $136.4M | $87.5M | +$48.9M | | Adjusted Free Cash Flow | $109.6M | $59.0M | +$50.6M | | Total Debt | $2,775.2M | $2,916.1M | -$140.9M | | Leverage Ratio | 3.3x | 3.4x | -0.1x | [Strategic Actions and Announcements](index=1&type=section&id=Strategic%20Actions%20and%20Announcements) Greif is executing its 'Build to Last' strategy, achieving **$10.0 million** in cost savings and progressing with timberland sale for debt reduction - The company is making progress on the sale of its timberland business and plans to use the proceeds for further debt reduction[6](index=6&type=chunk) - The cost optimization program is ahead of schedule, with **$10.0 million** in run-rate savings achieved, targeting **$15.0 million to $25.0 million** by end of fiscal 2025[6](index=6&type=chunk) - CEO Ole Rosgaard highlighted Greif's strong quarter, balancing financial execution with strategic progress, demonstrating resilience and positioning for future value creation[5](index=5&type=chunk) [Segment Performance](index=3&type=section&id=Fiscal%20Second%20Quarter%202025%20Segment%20Results) [Customized Polymer Solutions](index=3&type=section&id=Customized%20Polymer%20Solutions) Customized Polymer Solutions saw significant growth, with net sales up **$43.7 million** to **$329.3 million** and Adjusted EBITDA up **$18.5 million** to **$53.4 million**, driven by acquisitions Customized Polymer Solutions Q2 2025 Performance (vs. Q2 2024) | Metric | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | Net Sales | $329.3M | $285.6M | +15.3% | | Gross Profit | $76.7M | $55.5M | +38.2% | | Operating Profit | $25.8M | $6.3M | +309.5% | | Adjusted EBITDA | $53.4M | $34.9M | +53.0% | - Net sales growth was primarily due to **$38.8 million** in contributions from recent acquisitions[10](index=10&type=chunk) [Durable Metal Solutions](index=3&type=section&id=Durable%20Metal%20Solutions) Durable Metal Solutions experienced a decline, with net sales down **$34.8 million** to **$378.9 million**, due to lower volumes and selling prices, impacting profitability Durable Metal Solutions Q2 2025 Performance (vs. Q2 2024) | Metric | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | Net Sales | $378.9M | $413.7M | -8.4% | | Gross Profit | $82.9M | $89.3M | -7.2% | | Operating Profit | $54.1M | $56.5M | -4.2% | | Adjusted EBITDA | $63.7M | $64.5M | -1.2% | - The decrease in net sales was primarily driven by lower volumes (**$18.6 million**) and lower average selling prices (**$12.3 million**)[12](index=12&type=chunk) [Sustainable Fiber Solutions](index=3&type=section&id=Sustainable%20Fiber%20Solutions) Sustainable Fiber Solutions achieved strong profit growth, with Adjusted EBITDA up **$30.0 million** to **$79.5 million**, driven by higher prices despite lower volumes Sustainable Fiber Solutions Q2 2025 Performance (vs. Q2 2024) | Metric | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | Net Sales | $599.1M | $580.1M | +3.3% | | Gross Profit | $132.7M | $93.7M | +41.6% | | Operating Profit | $25.9M | $18.9M | +37.0% | | Adjusted EBITDA | $79.5M | $49.5M | +60.6% | - Net sales increased primarily due to **$29.0 million** from higher published prices, partially offset by a **$9.1 million** impact from lower volumes[14](index=14&type=chunk) [Integrated Solutions](index=3&type=section&id=Integrated%20Solutions) Integrated Solutions' performance declined, with net sales down **$13.2 million** to **$78.4 million**, primarily due to the Delta Petroleum Company divestiture Integrated Solutions Q2 2025 Performance (vs. Q2 2024) | Metric | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | Net Sales | $78.4M | $91.6M | -14.4% | | Gross Profit | $27.2M | $31.6M | -13.9% | | Operating Profit | $12.8M | $16.4M | -22.0% | | Adjusted EBITDA | $17.3M | $20.8M | -16.8% | - The decrease in net sales was primarily due to a **$15.2 million** impact from the Delta Divestiture[17](index=17&type=chunk) [Financial Summaries & Outlook](index=4&type=section&id=Financial%20Summaries%20%26%20Outlook) [Tax Summary](index=4&type=section&id=Tax%20Summary) Greif's Q2 2025 income tax rate was **35.5%** (adjusted **32.8%**), with full-year fiscal 2025 projected between **27.0%** and **32.0%** - The income tax rate for Q2 2025 was **35.5%**, and the tax rate excluding adjustments was **32.8%**[20](index=20&type=chunk) - For fiscal year 2025, the expected tax rate (including and excluding adjustments) is projected to be between **27.0%** and **32.0%**[20](index=20&type=chunk) [Dividend Summary](index=4&type=section&id=Dividend%20Summary) Greif's Board declared quarterly cash dividends for Class A and Class B Common Stock, payable July 1, 2025, to shareholders of record June 17, 2025 Quarterly Dividend Declaration | Stock Class | Dividend per Share | | :--- | :--- | | Class A Common Stock | $0.54 | | Class B Common Stock | $0.81 | [Company Outlook](index=5&type=section&id=Company%20Outlook) Despite industrial contraction, Greif raised its fiscal year 2025 low-end guidance for Adjusted EBITDA to **$725 million** and Adjusted Free Cash Flow to **$280 million** due to strong Q2 performance - The company has not identified any compelling demand inflection on the horizon after a multi-year period of industrial contraction[22](index=22&type=chunk) Raised Fiscal 2025 Low-End Guidance | Metric (in millions) | Guidance Estimate | | :--- | :--- | | Adjusted EBITDA | $725 | | Adjusted free cash flow | $280 | [Financial Statements](index=7&type=section&id=Financial%20Statements) [Condensed Consolidated Statements of Income](index=7&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20INCOME) Greif's Q2 2025 net sales increased to **$1,385.7 million**, with gross profit at **$319.5 million** and net income at **$47.3 million** (**$0.82** per diluted Class A share) Income Statement Summary (Three Months Ended April 30) | (in millions) | 2025 | 2024 | | :--- | :--- | :--- | | Net sales | $1,385.7 | $1,371.0 | | Gross profit | $319.5 | $270.1 | | Operating profit | $118.6 | $98.1 | | Net income attributable to Greif, Inc. | $47.3 | $44.4 | [Condensed Consolidated Balance Sheets](index=8&type=section&id=CONDENSED%20CONSOLIDATED%20BALANCE%20SHEETS) As of April 30, 2025, Greif's total assets were **$6,754.4 million**, with total liabilities of **$4,448.2 million** and long-term debt at **$2,290.9 million** Balance Sheet Summary | (in millions) | April 30, 2025 | October 31, 2024 | | :--- | :--- | :--- | | Total current assets | $1,754.4 | $1,549.4 | | Total assets | $6,754.4 | $6,647.6 | | Long-term debt | $2,290.9 | $2,626.2 | | Total liabilities | $4,448.2 | $4,400.2 | | Total equity | $2,175.0 | $2,117.5 | [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20CASH%20FLOWS) Net cash from operating activities significantly increased to **$136.4 million** in Q2 2025, with cash and cash equivalents rising by **$51.6 million** during the quarter Cash Flow Summary (Three Months Ended April 30) | (in millions) | 2025 | 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $136.4 | $87.5 | | Net cash used in investing activities | $(12.7) | $(609.0) | | Net cash (used in) provided by financing activities | $(116.2) | $548.8 | | Net increase in cash and cash equivalents | $51.6 | $16.7 | | Cash and cash equivalents, end of period | $252.7 | $196.0 | [GAAP to Non-GAAP Reconciliations](index=11&type=section&id=GAAP%20TO%20NON-GAAP%20RECONCILIATION) [Consolidated Adjusted EBITDA Reconciliation](index=11&type=section&id=CONSOLIDATED%20ADJUSTED%20EBITDA) Greif reconciled GAAP Net Income to Adjusted EBITDA, which reached **$213.9 million** in Q2 2025, up from **$169.7 million** in the prior year Adjusted EBITDA Reconciliation (Three Months Ended April 30) | (in millions) | 2025 | 2024 | | :--- | :--- | :--- | | Net income | $54.5 | $52.0 | | Plus: Interest, Taxes, D&A, etc. | $130.9 | $105.9 | | Plus: Restructuring, Impairment, and other charges | $28.5 | $5.8 | | **Adjusted EBITDA** | **$213.9** | **$169.7** | [Net Income and EPS Before Adjustments Reconciliation](index=15&type=section&id=NET%20INCOME%2C%20CLASS%20A%20EARNINGS%20PER%20SHARE%20AND%20TAX%20RATE%20BEFORE%20ADJUSTMENTS) Greif's Q2 2025 GAAP net income of **$47.3 million** (**$0.82** per share) adjusted to **$68.7 million** (**$1.19** per share) after excluding specific costs Adjusted Net Income & EPS Reconciliation (Three Months Ended April 30) | (in millions, except per share) | 2025 | 2024 | | :--- | :--- | :--- | | Net Income Attributable to Greif, Inc. (GAAP) | $47.3 | $44.4 | | Diluted Class A EPS (GAAP) | $0.82 | $0.77 | | Total Adjustments | $21.4 | $3.7 | | **Net Income Attributable to Greif, Inc. (Adjusted)** | **$68.7** | **$48.1** | | **Diluted Class A EPS (Adjusted)** | **$1.19** | **$0.83** | [Adjusted Free Cash Flow Reconciliation](index=14&type=section&id=ADJUSTED%20FREE%20CASH%20FLOW) Adjusted Free Cash Flow for Q2 2025 significantly increased to **$109.6 million** from **$59.0 million** in the prior year, driven by strong operating cash flow Adjusted Free Cash Flow Reconciliation (Three Months Ended April 30) | (in millions) | 2025 | 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $136.4 | $87.5 | | Less: Purchases of properties, plants and equipment | $(30.0) | $(41.0) | | Free cash flow | $106.4 | $46.5 | | Plus: Specific cash costs (acquisition, ERP, etc.) | $3.2 | $12.5 | | **Adjusted free cash flow** | **$109.6** | **$59.0** | [Net Debt and Leverage Ratio Reconciliation](index=16&type=section&id=NET%20DEBT%20and%20LEVERAGE%20RATIO) Greif's net debt decreased by **$197.6 million** to **$2,522.5 million**, improving the leverage ratio to **3.3x** as of April 30, 2025 Net Debt Calculation | (in millions) | April 30, 2025 | April 30, 2024 | | :--- | :--- | :--- | | Total debt | $2,775.2 | $2,916.1 | | Less: Cash and cash equivalents | $(252.7) | $(196.0) | | **Net debt** | **$2,522.5** | **$2,720.1** | - The leverage ratio improved to **3.3x** as of April 30, 2025, down from **3.4x** as of April 30, 2024[49](index=49&type=chunk) [Projected 2025 Guidance Reconciliation](index=18&type=section&id=PROJECTED%202025%20GUIDANCE%20RECONCILIATION) Greif projects fiscal 2025 low-end Adjusted Free Cash Flow guidance at **$280.0 million**, based on **$431.0 million** in operating cash flow Fiscal 2025 Low-End Adjusted Free Cash Flow Guidance Reconciliation | (in millions) | Estimate | | :--- | :--- | | Net cash provided by operating activities | $431.0 | | Less: Cash paid for purchases of properties, plants and equipment | $(171.0) | | Free cash flow | $260.0 | | Plus: Cash paid for acquisition, ERP, and other costs | $20.0 | | **Adjusted free cash flow** | **$280.0** |

Core Insights - Greif's international operations are crucial for assessing its financial resilience and growth prospects, given the interconnected nature of the global economy [2][3] Revenue Performance - The total revenue for Greif in the quarter ended April 2025 was $1.39 billion, reflecting a year-over-year increase of 1.1% [4] - Revenue from Asia Pacific and Other Americas was $153.8 million, accounting for 11.10% of total revenue, which was a decline of 10.23% compared to the expected $171.32 million [5] - Revenue from Europe, Middle East, and Africa reached $370.1 million, representing 26.71% of total revenue, exceeding expectations by 1.42% [6] Future Projections - Analysts project Greif's total revenue for the current fiscal quarter to be $1.5 billion, indicating a 3.4% increase from the same quarter last year, with expected contributions of 12.3% from Asia Pacific and Other Americas and 26.2% from Europe, Middle East, and Africa [7] - For the full year, total revenue is anticipated to be $5.22 billion, a decline of 4.2% from the previous year, with revenue contributions expected to be 12.2% from Asia Pacific and Other Americas and 25.8% from Europe, Middle East, and Africa [8] Market Context - The reliance on global markets presents both opportunities and challenges for Greif, making the analysis of international revenue trends essential for forecasting future performance [9][10] - Greif's stock has increased by 21.2% over the past month, outperforming the S&P 500's increase of 7.2% during the same period [13]

Core Insights - Greif's stock surged nearly 16% following a strong earnings report for Q2 of fiscal 2025, outperforming the S&P 500 index which fell by 0.5% [1] - The company reported net sales of approximately $1.39 billion, a 1% increase year-over-year, and GAAP net income rose by 0.5% to $54.5 million, or $1.22 per share [2] - Analysts had higher revenue expectations at $1.42 billion but underestimated profitability, anticipating only $1.12 per share in net income [4] Financial Performance - Greif's management provided guidance for the fiscal year, raising the low end of its non-GAAP EBITDA projection to $725 million and adjusted free cash flow to $280 million, both of which are improvements over fiscal 2024 results of $694 million and just under $190 million respectively [5] Business Strategy - The CEO emphasized a steady approach to business, highlighting resilience supported by strategic portfolio moves and operational discipline, positioning Greif for future success and value creation [5] - Greif is characterized as a dependable operator, known for producing consistent results and maintaining a relatively high-yield dividend, making it an attractive stock for investors [6][7]

Financial Performance - Net income for the three months ended April 30, 2025, was $54.5 million, compared to $52.0 million for the same period in 2024, representing a 4.8% increase[9]. - Comprehensive income attributable to Greif, Inc. for the three months ended April 30, 2025, was $123.2 million, up from $44.1 million in 2024, indicating a significant increase of 179.5%[9]. - Net cash provided by operating activities for the six months ended April 30, 2025, was $105.6 million, compared to $92.0 million for the same period in 2024, an increase of 14.9%[13]. - The net income for the three months ended April 30, 2025, was $47.3 million, compared to $55.9 million for the six months ended April 30, 2025, indicating a decrease of about 15.4%[14]. - Comprehensive income for the three months ended April 30, 2025, was $123.2 million, while for the six months ended April 30, 2025, it was $102.3 million, showing a significant increase in comprehensive income[14]. - The total operating profit for the six months ended April 30, 2025, was $178.5 million, compared to $167.0 million for the same period in 2024, representing a growth of 6.5%[100][102]. Assets and Equity - Total assets as of April 30, 2025, were $6,754.4 million, compared to $6,647.6 million as of October 31, 2024, reflecting a growth of 1.6%[11]. - The total shareholders' equity increased to $2,175.0 million as of April 30, 2025, from $2,117.5 million as of October 31, 2024, representing a growth of 2.7%[12]. - As of April 30, 2025, Greif, Inc. reported a total equity of $2,175.0 million, an increase from $2,117.5 million as of October 31, 2024, reflecting a growth of approximately 2.7%[14]. - The company reported a total of $2,476.4 million in retained earnings as of April 30, 2025, reflecting a stable earnings retention strategy[14]. Debt and Financing - Long-term debt decreased to $2,290.9 million as of April 30, 2025, down from $2,626.2 million as of October 31, 2024, a reduction of 12.7%[12]. - As of April 30, 2025, the outstanding balance under the 2022 and 2023 Credit Agreements was $2,392.3 million, with a current portion of $95.8 million and a long-term portion of $2,296.5 million[55]. - The weighted average interest rate for borrowings under the 2022 and 2023 Credit Agreements was 5.88% for the six months ended April 30, 2025, while the actual interest rate was 6.06%[55]. - The Company entered into a $300.0 million Incremental Term Loan A-4 Agreement on March 25, 2024, with quarterly principal installments starting April 30, 2024, and maturing on March 1, 2027[51]. Foreign Currency and Comprehensive Income - The company reported a foreign currency translation gain of $118.0 million for the three months ended April 30, 2025, compared to a loss of $29.2 million in 2024[9]. - The foreign currency translation contributed $117.3 million to other comprehensive income for the three months ended April 30, 2025[14]. - The accumulated other comprehensive income (loss) showed a loss of $308.7 million as of April 30, 2025, compared to a loss of $355.1 million as of October 31, 2024, indicating an improvement[14]. Dividends and Stock - Dividends paid to Greif, Inc. shareholders amounted to $31.4 million, with a dividend per Class A share of $0.54 and Class B share of $0.81[14]. - The total common stock increased from 47,437 thousand shares to 47,461 thousand shares, reflecting a slight increase in shares outstanding[14]. - The treasury stock decreased from $279.0 million to $276.8 million, indicating a reduction in the company's repurchased shares[14]. Acquisitions and Restructuring - The Company acquired Ipackchem Group SAS for a total purchase price of $582.1 million, incurring transaction costs of $8.9 million[29]. - As of April 30, 2025, the fair value of identifiable net assets acquired from Ipackchem was $301.1 million, with goodwill recognized at $281.0 million[32]. - The Company recorded restructuring charges of $11.2 million for the three months ended April 30, 2025, compared to $(6.8) million for the same period in 2024[43]. - The restructuring activities in 2025 focus on optimizing operations to align with long-term profitable earnings growth[42]. Operational Efficiency and Future Growth - The company plans to continue its market expansion and product development strategies to enhance future growth prospects[9]. - Greif, Inc. is transitioning to a material solution-based structure to enhance operational efficiency and capitalize on growth opportunities, which may impact future financial reporting[21]. - The company is in the process of determining the potential impact of recently issued accounting standards on its financial position and results of operations[24][27].

Core Insights - Greif, Inc. (GEF) reported adjusted earnings per share (EPS) of $1.19 for Q2 fiscal 2025, exceeding the Zacks Consensus Estimate of $1.08, marking a year-over-year increase of 43.4% [1][10] - Total revenues increased by 1.1% year over year to $1.39 billion, although this fell short of the Zacks Consensus Estimate of $1.43 billion [2][10] - The gross margin improved to 23.1%, up from 19.7% in the prior year, with gross profit rising 18.3% to $319.5 million [2][10] Financial Performance - Selling, general and administrative expenses rose to $173 million from $167 million in the prior year [3] - Adjusted EBITDA increased by 26% year over year to $214 million, with an adjusted EBITDA margin of 15.4%, compared to 12.4% in the previous year [3][10] - Cash and cash equivalents at the end of Q2 fiscal 2025 were $253 million, up from $198 million at the end of fiscal 2024, with cash generated from operating activities totaling $136 million compared to $87.5 million in the prior year [9] Segment Performance - Customized Polymer Solutions segment revenues were $329 million, up from $286 million year over year, with adjusted EBITDA of $53 million, exceeding estimates [5] - Durable Metal Solutions segment revenues decreased by 8.4% year over year to $379 million, with adjusted EBITDA of $63.7 million, slightly lower than the previous year [6] - Sustainable Fiber Solutions segment revenues grew by 3.3% year over year to $599 million, with adjusted EBITDA rising to $79.5 million from $49.5 million in the prior year [7] - Integrated Solutions segment revenues fell to $78 million from $92 million year over year, with adjusted EBITDA of $17.3 million compared to $20.8 million in the previous year [8] Outlook - Greif raised its fiscal 2025 adjusted EBITDA low-end forecast to $725 million from $710 million [10][12] - The company expects the low end of fiscal 2025 adjusted free cash flow to be $280 million [12] Dividend Announcement - Greif's board announced a quarterly cash dividend of 54 cents per share for Class A Common Stock and 81 cents per share for Class B Common Stock, payable on July 1, 2025 [11] Stock Performance - Greif's shares have declined by 9.5% over the past year, compared to an 8.4% decline in the industry [13]

Financial Data and Key Metrics Changes - For Q2 2025, adjusted EBITDA increased by $44 million year over year to $214 million, with an adjusted EBITDA margin up 300 basis points to 15.4% [19] - Adjusted free cash flow was $110 million, up from $59 million in Q2 2024, and adjusted EPS rose to $1.19 from $0.83 [19] - The company raised its low-end fiscal 2025 guidance for adjusted EBITDA to at least $725 million, up from $710 million, and adjusted free cash flow guidance increased to $280 million from $245 million [24][25] Business Line Data and Key Metrics Changes - Customized Polymer Solutions segment saw adjusted EBITDA increase by $19 million year over year to $53 million, driven by volume growth and favorable product mix [21] - Sustainable Fiber Solutions posted $80 million of adjusted EBITDA, up from $50 million in the prior year, with EBITDA margins improving to 13.3% from 8.5% [22] - Integrated Solutions delivered $17 million in adjusted EBITDA, showing slight growth year over year despite a heavier mix of recycled fiber [23] Market Data and Key Metrics Changes - Polymer Solutions volumes improved year over year, particularly in agrochemicals, food and beverage, pharma, and flavors and fragrances, while metals were down 5% due to softer industrial demands [13][14] - Demand remained stable across all regions outside North America, where softness persisted due to greater exposure to industrial end markets [15] Company Strategy and Development Direction - The company is focused on its "Build to Last" strategy, emphasizing cost optimization and operational efficiency [6][10] - A strategic decision was made to close the LA paperboard mill, removing 72,000 tons of capacity to streamline operations [11][12] - The company aims to achieve $1 billion in EBITDA and $500 million in free cash flow by 2027, with a commitment to operational excellence and customer-centric growth [29] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the business model despite macroeconomic volatility, noting that ongoing cost optimization efforts are yielding positive results [6][10] - The sentiment among customers remains unchanged, with concerns about housing sales and industrial demand impacting future expectations [31] - Management highlighted that the maximum direct cost exposure from tariffs is less than $10 million annually, with current impacts being even lower due to mitigation actions [17][32] Other Important Information - The company achieved $10 million in run rate savings towards its full-year commitment of $15 million to $25 million in cost optimization [10] - The company has been recognized as one of Newsweek's top 100 most loved workplaces for three consecutive years, reflecting strong colleague engagement [7][8] Q&A Session Summary Question: What are the conversations with customers regarding end market demand? - Management noted that customer sentiment remains unchanged, with housing sales at a low and auto builds down, impacting chemical customers [31] Question: What is the near-term impact of raw material inflation on EBITDA margins? - Management indicated that the maximum worst-case impact from tariffs is around $10 million, but current impacts are much lower [32] Question: What is driving the elevated SG&A expenses? - Elevated SG&A is attributed to increased incentives due to performance, the full quarter impact of IPAC Chem, and currency impacts [38] Question: What is the expected impact of URB pricing increases on EBITDA? - A $10 per ton change in URB pricing is expected to generate about $530,000 a month in additional EBITDA [45] Question: How does the company plan to manage operations post-closure of facilities? - The closures are expected to result in a positive annual EBITDA impact of $10 million, with a focus on optimizing production and inventory management [62]