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 full-year 2026 capital expenditures, free cash flow ("FCF") and Adj. Cash Flow, 2026 Net Sales, volumes, Adjusted EBITDA, Adjusted EPS, capital spending, interest expense, cash taxes, working capital and pension expense, effective tax rate, and depreciation and amortization, year-end 2026 Net Leverage, and post ...

Core Insights - Graphic Packaging Holding Company reported a decline in Q3 results due to reduced prices and volumes, with net income falling to $142 million from $165 million year-on-year [1] - Adjusted net income also decreased to $172 million compared to $194 million a year earlier, and earnings per diluted share dropped to $0.48 from $0.55 [1][2] Financial Performance - Quarterly net sales decreased by 1% year-on-year to $2.19 billion from $2.22 billion, influenced by lower pricing and demand in the Americas, partially offset by moderate international growth and a favorable foreign exchange impact of $24 million [2] - EBITDA fell by 13% to $361 million from $417 million, with adjusted EBITDA at $383 million, down from $433 million in the prior-year quarter [2][3] - The adjusted EBITDA margin narrowed to 17.5% from 19.5% a year ago [3] Debt and Capital Expenditure - Total debt increased to $5.94 billion from $5.21 billion at the end of 2024 [3] - Capital expenditure was $267 million, compared to $313 million in the same quarter of 2024 [3] Shareholder Returns - In the first nine months of 2025, the company returned $248 million to shareholders through dividends and share buybacks, including the repurchase of approximately 1.8 million shares for $39 million in Q3 [3] Year-to-Date Performance and Outlook - For the nine months ended September 30, net income totaled $373 million, down from $520 million a year earlier, with adjusted EBITDA at $1.08 billion compared to $1.28 billion a year ago [4] - The company expects full-year net sales between $8.4 billion and $8.6 billion, adjusted EBITDA of $1.40 billion to $1.45 billion, and adjusted earnings per share in the range of $1.80 to $2.00 [4] - The outlook reflects year-to-date performance and efforts to align production with orders, with noted high volume and market uncertainty due to weakened consumer confidence [5] Future Production and Efficiency - The company anticipates reaching full production in 12 to 18 months, with the Waco facility expected to become the world's most efficient producer of recycled paperboard [6]

Financial Data and Key Metrics Changes - Graphic Packaging's sales for Q3 2025 were $2.2 billion, with adjusted EBITDA of $383 million and an adjusted EBITDA margin of 17.5% [5][10] - Adjusted EPS for the quarter was reported at $0.58 [5] - Year-on-year volume was down 2%, but the company outperformed most markets served [10][14] Business Line Data and Key Metrics Changes - The innovation platform contributed approximately $52 million, roughly 2% of sales, helping to outperform challenges in volumetric performance [35] - Food and household products remained steady, while beverage and food service showed weakness [13][18] - Health and beauty, primarily a European business, continued to perform solidly [13] Market Data and Key Metrics Changes - The consumer market has bifurcated, with upper-income consumers spending differently and lower-income consumers cutting back due to rising food prices [9][10] - Grocery volumes have been impacted, with CPG customers timing purchases to manage cash, leading to less predictable order flows [10][14] - The recycled and unbleached packaging markets are in good balance, but there is unusual competitive pressure from bleached packaging producers [10][11] Company Strategy and Development Direction - The Waco facility is a critical investment that enhances supply chain efficiency and reduces waste, expected to provide a competitive advantage for decades [7][8] - The company is transitioning from Vision 2025 to Vision 2030, focusing on free cash flow generation [5][8] - Graphic Packaging aims to leverage its innovation capabilities to open new markets and maintain a strong position in the packaging industry [19][22] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the Waco facility's ramp-up, expecting it to contribute $80 million to EBITDA in 2026 [37][90] - The company is focused on controlling costs and inventory to protect margins amid a challenging consumer packaging environment [24][25] - Management acknowledged the unpredictability of demand but emphasized the strength of their business model and competitive advantages [28][29] Other Important Information - The company repurchased approximately 6.8 million shares year-to-date, reducing shares outstanding by 2.3% in 2025 [23] - Capital spending is expected to decline significantly to approximately 5% of sales, which will drive cash flow inflection [27][28] Q&A Session Summary Question: Did the end markets track as expected in Q3? - Management clarified that there was no share loss; customer purchasing patterns affected volumetric performance, with innovation helping to outperform challenges [35][36] Question: Confidence in Waco's EBITDA contribution for next year? - Management expressed high confidence in Waco's ramp-up delivering the expected $80 million contribution [37] Question: Opportunities for productivity improvement? - Management highlighted the focus on controlling costs and optimizing operations to enhance productivity and efficiency [41][46] Question: Trends in the food service market? - Management noted that fast casual dining is under pressure, while quick service restaurants are performing better, with innovation expected to drive growth [50][51] Question: Impact of competitive price pressure on SBS and CUK? - Management stated that they have not lost market share and emphasized the cost advantages of coated recycled paperboard over bleached alternatives [60][61] Question: Clarification on Waco's start-up costs? - Management indicated that the start-up costs of $65 million-$75 million are primarily operating costs incurred during the ramp-up phase, with a portion expected to carry into 2026 [67][80]