Greif Q1 Earnings Call Highlights

Core Insights - Greif reported fiscal first-quarter 2026 results that met expectations despite ongoing softness in industrial demand, highlighting margin improvements driven by structural cost actions and increased shareholder returns through share repurchases [3][6][18] Financial Performance - Adjusted EBITDA increased by 24% year-over-year, with the adjusted EBITDA margin improving by 260 basis points to 12.3%, attributed to better price-cost dynamics and structural cost optimization [2][6] - The company reaffirmed the low end of its fiscal 2026 guidance, projecting $630 million in adjusted EBITDA and $315 million in adjusted free cash flow, with an expected free cash flow conversion of approximately 50% [5][6] Capital Allocation - Greif's capital allocation strategy prioritizes shareholder returns and balance-sheet strength, with leverage at approximately 1.2x. The company completed $130 million of a $150 million buyback and approved an additional $300 million repurchase authorization [4][18] - The company aims to repurchase up to 2% of shares outstanding annually, subject to board approval and balanced against other capital needs [18] Segment Performance - In Customized Polymer Solutions, demand was flat overall, with slight increases in intermediate bulk container volumes and declines in small and large containers. The company expects improvements in small containers in the second quarter due to agricultural seasonality [8] - Durable Metal Solutions faced pressure due to softness across regions, particularly among chemical customers, while Sustainable Fiber Solutions saw declining converting volumes amid North American industrial softness [10][12] Cost Optimization - Greif achieved run-rate cost optimization savings of $65 million, with a fiscal year-end target of $80–$90 million, primarily through SG&A actions [13] - Management emphasized that the cost optimization efforts are structural rather than cyclical, contributing to improved profitability despite volume headwinds [2][6] Market Outlook - The company noted that customer conversations indicate continued muted demand conditions, but it is actively pursuing commercial opportunities and transforming its commercial organization [14] - Greif's SiOx barrier technology is operational on its first machine in France, with additional machines planned for deployment, although the financial impact in fiscal 2026 is not expected to be significant [19][20]