Graphic Packaging Company (NYSE:GPK) Q4 2025 Earnings call February 03, 2026 10:00 AM ET Company ParticipantsCharles D. Lischer - SVP and Interim Chief Financial OfficerMark W. Connelly - SVP of Investor Strategy and DevelopmentRobbert Rietbroek - President and CEOConference Call ParticipantsArun Viswanathan - Managing Director and Lead Equity Research AnalystGabe Hajde - Director and Senior Equity Research AnalystGhansham Panjabi - Senior Research AnalystLewis Merrick - AnalystMark Weintraub - Senior Resea ...

Financial Data and Key Metrics Changes - In Q4 2025, net sales were $2.1 billion, flat year-over-year, with volumes and pricing down slightly less than 1%, offset by a $40 million foreign exchange benefit [26] - For the full year 2025, net sales were $8.6 billion, down approximately 2%, with adjusted EBITDA around $1.4 billion, reflecting pressures from competitive pricing and softer packaging volumes [27][28] - Adjusted EPS for the full year was $1.80, with a net leverage of 3.8x due to EBITDA headwinds and share repurchases [28] Business Line Data and Key Metrics Changes - The company is experiencing pressure on adjusted EBITDA due to competitive pricing and reduced packaging volumes, which together reduced adjusted EBITDA by approximately $40 million compared to the previous year [26] - The adjusted divestiture accounted for $150 million of the $190 million decrease in net sales for the full year [27] Market Data and Key Metrics Changes - The external environment remains challenged, with overcapacity in commodity bleached paperboard markets impacting finished packaging prices [10] - Demand trends for consumer staples are uneven due to affordability and macroeconomic uncertainty, with expectations of improvement in the future [10] Company Strategy and Development Direction - The company is focused on enhancing profitability through cost actions and operational efficiencies, reducing inventory, and prioritizing free cash flow generation [13][19] - A comprehensive operational and business review is underway to optimize the company's footprint and resources [10][12] - The growth strategy emphasizes disciplined organic growth, customer-centric approaches, and innovation to drive market share [20][22] Management's Comments on Operating Environment and Future Outlook - Management acknowledges the challenges in the current macroeconomic environment but emphasizes a focus on controllable factors to create lasting value [11] - The company expects to generate adjusted free cash flow between $700 million and $800 million in 2026, driven by reduced capital spending and inventory optimization [14][19] - Management is optimistic about restoring top-line growth and improving margins as market conditions normalize [15][50] Other Important Information - Total capital spend for 2025 was $935 million, higher than targeted, with expectations to drop to approximately $450 million in 2026 [18][19] - The company aims to achieve an investment-grade credit rating by 2030 as part of its Vision 2030 commitments [15][23] Q&A Session Summary Question: How will the new CEO's approach differ from previous strategies? - The new CEO emphasizes a focus on cost reduction, productivity, and operational excellence while maintaining strong customer relationships [41][42] Question: What are the plans for inventory reduction? - The company plans to reduce inventory from 20% to 15% of sales, focusing on recycled, bleached, and cup stock, while ensuring customer service remains unaffected [45][46] Question: How does the pricing dynamic in paperboard affect the industry? - The CEO notes that the bleached paperboard market is oversupplied, impacting pricing and returns, while recycled and unbleached markets are in better balance [48][49] Question: What factors will determine core versus non-core assets? - The company will focus on durable competitive advantages and synergies, particularly in its North America and Europe food and beverage business, while reviewing smaller businesses for potential divestiture [57][59] Question: What is the company's stance on dividends? - The immediate priority is debt paydown, with no commitment to change the dividend policy for 2026, but future growth in dividends is expected as leverage decreases [60]

Graphic Packaging Company (NYSE:GPK) Q4 2025 Earnings call February 03, 2026 10:00 AM ET Speaker1Good day, everyone, and welcome to the Graphic Packaging Holding Company fourth quarter and full year 2025 conference call. At this time, all participants are placed on a listen-only mode, and we will open the floor for your questions and comments after the presentation. It is now my pleasure to hand the floor over to your host, Mark Connelly. Sir, the floor is yours.Speaker0Good morning. We have with us today R ...