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]

Core Insights - Greif, Inc. reported strong fiscal second quarter 2025 results, demonstrating resilience and strategic progress under its "Build to Last" strategy, with a focus on cost reductions and operational discipline [4][5][23]. Financial Highlights - Net income increased by 6.5% to $47.3 million, or $0.82 per diluted Class A share, compared to $44.4 million, or $0.77 per diluted Class A share in the prior year [5]. - Adjusted EBITDA rose by 26.0% to $213.9 million from $169.7 million [5]. - Net cash provided by operating activities increased by $48.9 million to $136.4 million [5]. - Total debt decreased by $140.9 million to $2,775.2 million, with net debt down by $197.6 million to $2,522.5 million [5]. Segment Performance - Customized Polymer Solutions saw net sales increase by $43.7 million to $329.3 million, primarily due to contributions from recent acquisitions [11]. - Durable Metal Solutions experienced a net sales decrease of $34.8 million to $378.9 million, attributed to lower volumes and selling prices [13]. - Sustainable Fiber Solutions reported a net sales increase of $19.0 million to $599.1 million, driven by higher containerboard and boxboard prices [16]. - Integrated Solutions faced a net sales decline of $13.2 million to $78.4 million, mainly due to the divestiture of Delta Petroleum Company [19]. Cost Optimization and Strategic Actions - The company achieved $10.0 million in run-rate savings from its cost optimization program and expects to reach $15.0 million to $25.0 million by the end of fiscal year 2025 [5]. - Greif is progressing on the sale of its timberland business, anticipating using the proceeds for further debt reduction [5]. Tax and Dividend Information - The income tax rate for the quarter was 35.5%, with an expected range of 27.0% to 32.0% for fiscal 2025 [21]. - The Board of Directors declared quarterly cash dividends of $0.54 per share of Class A Common Stock and $0.81 per share of Class B Common Stock, payable on July 1, 2025 [22]. Company Outlook - The company acknowledges a multi-year period of industrial contraction with no compelling demand inflection identified, but remains positioned for a potential recovery in the industrial economy [23]. - Fiscal 2025 low-end guidance for Adjusted EBITDA is raised to $725 million and for adjusted free cash flow to $280 million [24].