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 ...

Graphic Packaging (GPK) came out with quarterly earnings of $0.29 per share, missing the Zacks Consensus Estimate of $0.34 per share. This compares to earnings of $0.59 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of -15.33%. A quarter ago, it was expected that this packaging company would post earnings of $0.54 per share when it actually produced earnings of $0.58, delivering a surprise of +7.41%.Over the last four quarters, ...

Financial Performance - 2025 net sales were $8.6 billion, a decrease of 2% from $8.8 billion in 2024[1] - 2025 net income was $444 million, down from $658 million in 2024, representing a decline of 32.5%[3] - Fourth quarter 2025 net sales were $2.1 billion, essentially flat compared to $2.1 billion in the same quarter last year[5] - Fourth quarter 2025 adjusted net income was $85 million, or $0.29 per diluted share, compared to $179 million, or $0.59 per diluted share in the same quarter of 2024[2] - Full-year 2025 adjusted EBITDA was $1.395 billion, down 17% from $1.682 billion in 2024[8] - Adjusted EBITDA for the twelve months ended December 31, 2025, was $1,395 million, down 17.1% from $1,682 million in 2024[28] - The company reported a decrease in EBITDA to $1,342 million in 2025 from $1,677 million in 2024, reflecting a decline of 19.9%[28] - The adjusted earnings per share (diluted) for 2025 was $1.80, down from $2.49 in 2024[28] Future Guidance - The company expects 2026 net sales to be between $8.4 billion and $8.6 billion, with adjusted EBITDA guidance of $1.05 billion to $1.25 billion[13] Capital Expenditures - Capital expenditures for full-year 2025 were $935 million, a decrease from $1.203 billion in the prior year[11] - Capital spending for 2025 was $935 million, a reduction of 22.2% from $1,203 million in 2024[30] Shareholder Returns - The company returned approximately $281 million to shareholders in 2025 through dividends and share repurchases[12] Debt and Leverage - Total debt for full-year 2025 was $5.592 billion, an increase from $5.209 billion in 2024[9] - The net leverage ratio increased to 3.8 in 2025 from 3.0 in 2024, indicating a higher level of debt relative to adjusted EBITDA[30] - The company reported a net debt of $5,331 million in 2025, an increase from $5,052 million in 2024[30] Cash Flow - Net cash provided by operating activities increased to $854 million in 2025, compared to $840 million in 2024[30] - Adjusted net cash provided by operating activities was $1,104 million in 2025, compared to $1,176 million in 2024[30] - The company had a net cash increase of $104 million in 2025, compared to a decrease of $5 million in 2024[24] Project Updates - The Waco, Texas greenfield recycled paperboard manufacturing facility project is substantially complete, with total projected costs of approximately $1.67 billion[11]

Core Insights - Graphic Packaging Holding Company reported a decrease in net sales and net income for the year 2025 compared to 2024, with net sales at $8.6 billion and net income at $444 million [1][3] - The company is focusing on operational excellence, customer service, cost structure improvement, and generating substantial free cash flow to strengthen its balance sheet and return capital to shareholders [4] Financial Performance - **Net Sales**: Fourth quarter 2025 net sales were $2,103 million, slightly up from $2,095 million in the same quarter of 2024. Full-year 2025 net sales decreased by 2% to $8,617 million from $8,807 million in 2024 [5][6] - **Net Income**: Fourth quarter net income was $71 million, or $0.24 per diluted share, down from $138 million, or $0.46 per diluted share in the same quarter of 2024. Full-year net income was $444 million, or $1.48 per diluted share, compared to $658 million, or $2.16 per diluted share in 2024 [2][3] - **EBITDA**: Fourth quarter EBITDA decreased by 19% to $305 million from $376 million in the same quarter of 2024. Full-year EBITDA decreased by 20% to $1,342 million from $1,677 million in 2024 [7][8] Operational Highlights - **Capital Expenditures**: Capital expenditures in the fourth quarter of 2025 were $127 million, down from $310 million in the same quarter of 2024. Full-year capital expenditures were $935 million, compared to $1,203 million in 2024 [10] - **Debt Levels**: Total debt for full-year 2025 was $5,592 million, an increase from $5,209 million in 2024. The net debt was $5,331 million, up from $5,052 million in 2024, resulting in a net leverage ratio of 3.8x compared to 3.0x in 2024 [9] Future Guidance - The company expects 2026 net sales to be between $8.4 billion and $8.6 billion, with adjusted EBITDA projected between $1.05 billion and $1.25 billion. The anticipated adjusted free cash flow for 2026 is between $700 million and $800 million [12][13]

Core Viewpoint - Glancy Prongay & Murray LLP is investigating potential claims against the board of directors of Graphic Packaging Holding Company for possible breaches of fiduciary duties to shareholders [1] Group 1 - The investigation is focused on whether the board acted in the best interests of shareholders [1] - The law firm is inviting shareholders of Graphic Packaging to participate in the investigation [1]

Core Viewpoint - The Law Offices of Howard G. Smith is investigating potential claims against the board of directors of Graphic Packaging Holding Company regarding possible breaches of fiduciary duties to shareholders [1]. Group 1: Investigation Details - A shareholder owning 4.2% of Graphic Packaging's stock issued a letter in December 2025, following the announcement of Robbert E. Rietbroek as the new CEO, replacing Michael Doss [3]. - The investigation focuses on whether the board of directors grossly mismanaged the company and breached its fiduciary duties in connection with the CEO transition and the subsequent departure of the Executive Vice President and General Counsel [3]. Group 2: Participation Information - Shareholders who held Graphic Packaging shares purchased before December 2025 are encouraged to contact the Law Offices of Howard G. Smith to discuss their legal rights and potential participation in the investigation [2][4].

Core Viewpoint - The Law Offices of Frank R. Cruz is investigating potential claims against the board of directors of Graphic Packaging Holding Company regarding possible breaches of fiduciary duties to shareholders [1][2]. Group 1: Investigation Details - A shareholder owning 4.2% of Graphic Packaging's stock issued a letter in December 2025, responding to the announcement of Robbert E. Rietbroek as the new CEO, replacing Michael Doss [2]. - Following the CEO transition, the Company's Executive Vice President and General Counsel also departed from their roles, raising concerns about the board's management and fiduciary responsibilities [2]. Group 2: Shareholder Engagement - Shareholders who purchased Graphic Packaging shares before December 2025 are encouraged to discuss their rights and interests regarding the investigation with the Law Offices of Frank R. Cruz [4].

Company Overview - Graphic Packaging Holding Company is a leading provider of fiber-based packaging solutions, focusing on sustainable and innovative packaging for food, beverage, and consumer goods sectors [6] - The company has a market capitalization of $4.51 billion and reported revenue of $8.61 billion with a net income of $511 million for the trailing twelve months [4] Recent Developments - On January 16, Howard Capital Management Group sold its entire holding of 1,069,223 shares in Graphic Packaging, with an estimated transaction value of $20.92 million [2] - Following this transaction, Graphic Packaging comprised 1.32% of the fund's reportable 13F assets [3] Financial Performance - As of January 16, shares of Graphic Packaging were priced at $15.28, reflecting a decline of 43.51% over the past year, significantly underperforming the S&P 500 by approximately 60 percentage points [3] - In the third quarter, packaging volumes decreased by 2% year over year, with sales slipping 1% to $2.19 billion, and adjusted EBITDA fell 11% year over year due to pricing pressure and cost inflation [7] Market Position and Strategy - Graphic Packaging offers a diverse range of products including coated paperboard, folding cartons, cups, lids, and food containers, and also provides packaging machinery and support services [8] - The company serves a wide array of clients including consumer packaged goods companies, quick-service restaurants, and foodservice providers across multiple regions [8] Operational Challenges - The company is experiencing increased net leverage, which climbed to 3.9 times adjusted EBITDA from 3.0 times at the end of the previous year, attributed to heavy capital spending on long-term projects [9] - The current operational environment shows that consumer demand has stalled, leading to compressed margins and increased balance sheet risk [9]

Core Viewpoint - Three stocks have been added to the Zacks Rank 5 (Strong Sell) List, indicating a negative outlook for these companies based on revised earnings estimates Group 1: Company Summaries - Vera Bradley, Inc. (VRA) is an apparel and accessories company with a current year earnings estimate revised downward by 39.6% over the last 60 days [1] - Graphic Packaging Holding Company (GPK) is a packaging products company with a current year earnings estimate revised downward by 2.1% over the last 60 days [1] - Koninklijke Philips N.V. (PHG) is a health technology company with a current year earnings estimate revised downward by 2.6% over the last 60 days [2]

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