Financial Data and Key Metrics Changes - In Q1 2025, Graphic Packaging reported sales of $2.1 billion, adjusted EBITDA of $365 million, and margins of 17.2%, which were significantly below expectations due to weaker volumes and input cost inflation [7][30][31] - Adjusted EPS for the quarter was $0.51, reflecting the challenging operating environment [7] Business Line Data and Key Metrics Changes - The Americas business experienced a volume decline of approximately 1%, while the international business saw a growth of about 3% [10][30] - Innovation sales growth was reported at $44 million for the quarter, indicating a positive contribution from new product categories [13] Market Data and Key Metrics Changes - Overall sales were flat year-over-year, with food representing approximately 38% of packaging sales, showing uneven results across product categories [17] - Beverage packaging sales, which account for about 25% of overall sales, saw a decline after two years of strong performance, attributed to slowing beer consumption trends [19] Company Strategy and Development Direction - The company is transitioning from Vision 2025 to Vision 2030, focusing on reinvestment and returning capital to shareholders, with a new $1.5 billion share repurchase authorization approved by the Board [9][36] - The Waco recycled paperboard investment is on track for a fourth-quarter startup, expected to generate substantial cash flow in the coming years [8][36] Management's Comments on Operating Environment and Future Outlook - Management noted that consumer confidence has significantly declined in the U.S. and other markets, leading to a stretched consumer base and reduced spending [10][24] - The company has adjusted its guidance for 2025, now expecting a volume decline of 2% as a base case, reflecting the challenging backdrop for CPG and QSR customers [34][35] Other Important Information - Input cost inflation was significant in Q1 2025, with expectations for continued inflation in the coming quarters [31][34] - The company plans to implement a $40 price increase on recycled and unbleached paperboard grades effective May 15, 2025, to help recover margins [11][31] Q&A Session Summary Question: Trends in volume and affordability issues - Management acknowledged that affordability is a key issue affecting volumes, with consumers buying fewer items due to economic pressures [46][48] Question: Guidance assumptions for price-cost dynamics - The company expects to see a positive price contribution late in 2025, with efforts to recover inflation costs rolling into 2026 [52][95] Question: Supply-demand balance and potential industry actions - Management indicated that they will take rolling market-related downtime to align supply with demand, and noted recent closures by competitors that could help balance the market [58][60] Question: Revised guidance implications - The lower guidance reflects a combination of inflation impacts and volume declines, with a focus on matching supply and demand [84][92] Question: Long-term cash flow trajectory - Management remains confident in the long-term cash flow trajectory, expecting a significant reduction in CapEx in the coming years [100]

Financial Data and Key Metrics Changes - In Q1 2025, Graphic Packaging reported sales of $2.1 billion, adjusted EBITDA of $365 million, and margins of 17.2%, with adjusted EPS at $0.51, all significantly below expectations due to weaker volumes and input cost inflation [5][27][28] - Adjusted EBITDA was impacted by a $34 million headwind from price, volume, and mix, while input cost inflation amounted to $21 million [29] Business Line Data and Key Metrics Changes - The Americas business experienced a volume decline of approximately 1%, while the non-integrated international business saw a volume increase of about 3% [27] - Innovation sales growth was reported at $44 million for the quarter, driven by new contributions in various product categories [11] Market Data and Key Metrics Changes - Volumes in the Americas were disappointing, down about 1%, while international markets showed slight growth but began to pull back due to economic uncertainty [8][9] - The food market represented approximately 38% of packaging sales, with mixed results across product categories, while beverage sales, accounting for about 25% of overall packaging sales, saw its first decline after two years of strong performance [14][16] Company Strategy and Development Direction - The company is transitioning from Vision 2025 to Vision 2030, focusing on reinvestment and returning capital to stockholders, with a new $1.5 billion share repurchase authorization approved by the Board [7][34] - The Waco recycled paperboard investment is on track for a fourth-quarter startup, with expectations of generating substantial excess cash over the next several years [5][8] Management Comments on Operating Environment and Future Outlook - Management noted that consumer confidence has significantly declined, impacting volumes across markets, and a 2% volume decline is now the base case for 2025 [22][32] - Input cost inflation is expected to continue, with price increases announced to help recover margins [29][30] Other Important Information - The company plans to maintain capital spending in the $700 million range for 2025, with expectations of generating innovation sales growth of at least 2% [33][34] - The company is committed to improving its environmental footprint and enhancing its competitive advantage through innovation [25] Q&A Session Summary Question: Trends in volume decline and affordability issues - Management acknowledged that affordability is a key factor affecting volumes, with customers experiencing volume declines of approximately 3% to 4% [45][46] Question: Guidance assumptions for price-cost dynamics - Management expects to see a positive price contribution late in 2025, with efforts to recover inflation through pricing actions [52][53] Question: Supply-demand balance and potential industry actions - Management indicated that they will take rolling market-related downtime to match supply with demand, and noted recent closures by competitors that could help balance the market [61][62] Question: Revised guidance and EBITDA margin expectations - Management clarified that the revised guidance reflects a temporary impact from inflation, with a path back to previous margin levels expected through pricing recovery and the Waco project [94][95]

May 1, 2025 © 2025 Graphic Packaging Holding Company Forward-Looking Statements CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS Any statements of the Company's expectations in these slides, including, but not limited to, statements regarding the timing of the completion and startup of the Waco, Texas facility, the timing of the closure of the Middletown, Ohio recycled paperboard manufacturing facility, Innovation Sales Growth in 2025, inflation, decreases in consumer spending and growth in mass re ...