Graphic Packaging Holding Company (GPK) on Monday released further details on its support function restructuring and production optimization initiatives, and lowered its full-year core earnings and profit outlook due to ongoing production curtailments. Adjusted EBITDA is now expected to be ...

Core Insights - Robbert Rietbroek has been appointed as the new CEO of Graphic Packaging, bringing over 25 years of global leadership experience in the consumer products sector [2][4][5] - The Board expresses confidence in Rietbroek's ability to drive organic growth and achieve the company's Vision 2030 goals, following the successful tenure of former CEO Mike Doss [2][3] - Rietbroek's previous roles include CEO of Primo Brands Corporation and Primo Water Corporation, where he led significant growth and operational improvements [4][5] Company Overview - Graphic Packaging is a leader in consumer packaging, focusing on renewable and recycled materials, and aims to reduce the environmental footprint of its products [7] - The company operates a global network of design and manufacturing facilities, serving well-known brands across various sectors including food and beverage [7] Leadership Transition - Mike Doss, the former CEO, is credited with transforming Graphic Packaging into an industry leader and has laid a strong foundation for future growth [2][3] - Doss emphasized the importance of the transition timing, expressing confidence in Rietbroek's leadership to build on the company's achievements [2][3] Future Outlook - The company has provided updated guidance for full-year 2025 and reaffirmed its confidence in achieving free cash flow targets for 2026 [3]

ATLANTA, Dec. 8, 2025 /PRNewswire/ -- Graphic Packaging Holding Company (NYSE: GPK) ("Graphic Packaging" or the "Company"), a global leader in sustainable consumer packaging, today announced additional details on its support function and production optimization plans.  As disclosed on the Company's third quarter 2025 earnings conference call, Graphic Packaging has undertaken a review of support functions and corporate expenses and now expects savings of approximately $60 million in staffing and other cost ...

Company Overview - Graphic Packaging Holding Company is a leading provider of fiber-based packaging solutions with a global footprint and a diverse portfolio tailored to the food, beverage, and consumer goods sectors [6] - The company generates revenue primarily through the manufacture and sale of paperboard and packaging products, as well as the design and servicing of specialized packaging machinery [9] - As of the latest report, the company has a market capitalization of $4.7 billion and revenue of $8.6 billion over the trailing twelve months (TTM) [4] Recent Developments - Atlantic Investment Management initiated a new position in Graphic Packaging, acquiring 645,584 shares valued at approximately $12.6 million as of September 30 [2][10] - This new position represents 7.3% of Atlantic's $174.1 million in reportable assets [3] - The company's stock price was $15.90, reflecting a 47% decline over the past year, contrasting with the S&P 500's increase of about 12.5% during the same period [3] Financial Performance - In the third quarter, Graphic Packaging's net sales dipped 1% to $2.2 billion, while adjusted EBITDA fell to $383 million from $433 million a year earlier, attributed to weaker Americas volume and inflationary costs [11] - Despite the decline, management highlighted strong innovation traction and early production ahead of schedule at its new Waco recycled paperboard facility, which is expected to become the world's most efficient producer once fully ramped [11] - The company returned $39 million to shareholders through buybacks in the quarter and reduced its net share count by 2.3% year-to-date [11] Strategic Focus - Graphic Packaging maintains a competitive edge by focusing on sustainability and advanced barrier technologies, addressing evolving customer needs for environmentally responsible and high-performance packaging [7] - The company is completing a multiyear transformation aimed at improving cash returns and balance-sheet strength, which may present an attractive entry point for value-focused investors [10][12]

Core Insights - The materials sector is experiencing a trend of oversold stocks, presenting potential buying opportunities for undervalued companies [1] Group 1: Oversold Stocks - TriMas Corp (NASDAQ:TRS) has an RSI of 29.9, with a stock price decline of approximately 17% over the past month, closing at $31.77 [7] - Packaging Corp of America (NYSE:PKG) has an RSI of 29.1, with an 8% stock price drop over the past month, closing at $191.68 [7] - Graphic Packaging Holding Co (NYSE:GPK) has an RSI of 28.5, with a 14% decline in stock price over the past month, closing at $15.17 [7] Group 2: Company Performance - TriMas Corp increased its share repurchase authorization to $150 million, indicating confidence despite recent stock price declines [7] - Packaging Corp of America reported downbeat quarterly earnings, with CEO Mark W. Kowlzan noting cautious ordering patterns and low export containerboard sales volume [7] - Graphic Packaging Holding reported strong third-quarter results but cut its FY25 adjusted EPS guidance below estimates, with CEO Michael Doss highlighting effective execution amid sluggish consumer volumes [7]

Core Insights - The materials sector is experiencing a trend of oversold stocks, presenting potential buying opportunities for undervalued companies [1] - The Relative Strength Index (RSI) is a key indicator used to identify oversold conditions, with a value below 30 indicating potential buying opportunities [1] Company Summaries - **TriMas Corp (NASDAQ:TRS)**: Recently increased share repurchase authorization to $150 million. The stock has fallen approximately 17% over the past month, with a 52-week low of $19.33. Current RSI value is 29.9, and shares closed at $31.77, down 1.1% [7] - **Packaging Corp of America (NYSE:PKG)**: Reported disappointing quarterly earnings, with a stock decline of around 8% in the past month and a 52-week low of $172.72. The current RSI value is 29.1, and shares closed at $191.68, down 1.4% [7] - **Graphic Packaging Holding Co (NYSE:GPK)**: Despite reporting strong third-quarter results, the stock has decreased about 14% over the past month, reaching a 52-week low of $14.90. The current RSI value is 28.5, and shares closed at $15.17, down 0.9% [7]

Core Insights - Graphic Packaging Holding Company (NYSE:GPK) experienced a significant stock price increase of 8.88% to close at $17.05, breaking a five-day losing streak, as investors reacted positively to its maintained revenue guidance for the full year despite a disappointing third-quarter earnings report [1][3]. Financial Performance - The company's net income for the third quarter decreased by 14% to $142 million, down from $165 million in the same period last year [2]. - Net sales also saw a slight decline of 1%, totaling $2.19 billion compared to $2.2 billion year-on-year [2]. Guidance and Outlook - Graphic Packaging reaffirmed its full-year net sales guidance for 2025, projecting between $8.4 billion and $8.6 billion, but adjusted its outlook for adjusted EBITDA to a range of $1.40 billion to $1.45 billion and adjusted EPS to between $1.80 and $2 [3]. - The revisions in guidance were attributed to year-to-date performance, adjustments to match production with orders (approximately $15 million), and a broader range of potential outcomes for the fourth quarter due to high volume and market uncertainty [4]. Operational Developments - The company announced the early commencement of commercial operations at its new recycled paperboard manufacturing facility in Waco, Texas, with full production expected within the next 12 to 18 months [5]. - The Waco facility is projected to be the world's most efficient producer of recycled paperboard, offering the highest quality outside of its Kalamazoo, Michigan facility, marking a significant step in the company's Vision 2025 transformation [6].

Financial Performance - Net Sales for Q3 2025 decreased by $26 million, or 1%, to $2,190 million from $2,216 million in Q3 2024, primarily due to lower pricing and volumes in the Americas [138]. - Income from Operations for Q3 2025 decreased by $44 million, or 16%, to $234 million from $278 million in Q3 2024, attributed to lower packaging prices and commodity inflation [139]. - Net Income for Q3 2025 was $142 million, compared to $165 million in Q3 2024, reflecting a decrease of $23 million [137]. - For the first nine months of 2025, Net Sales decreased by $198 million, or 3%, to $6,514 million from $6,712 million in the same period of 2024, impacted by the Augusta Divestiture and reduced paperboard volumes [143]. - Income from Operations for the first nine months of 2025 decreased by $232 million, or 26%, to $648 million from $880 million in the same period of 2024, due to the Augusta Divestiture and commodity inflation [144]. - Total net sales for the third quarter of 2025 were $2,190 million, a decrease of 1.2% compared to $2,216 million in the same period of 2024 [153]. - Income from operations for the third quarter of 2025 was $234 million, down 15.8% from $278 million in the third quarter of 2024 [153]. - The company reported net income of $315 million for the first nine months of 2025, with net sales amounting to $4,994 million [170]. Cash Flow and Investments - For the first nine months of 2025, net cash provided by operating activities was $320 million, a decrease from $351 million in the same period of 2024 [164]. - Net cash used in investing activities for the first nine months of 2025 totaled $736 million, significantly higher than $102 million in the same period of 2024 [165]. - Capital spending for the first nine months of 2025 was $808 million, driven by the construction of a new recycled paperboard manufacturing facility in Waco, Texas [165]. - The company completed a $100 million tax-exempt green bond transaction in May 2025, with net proceeds of $99 million used for facility construction [166]. Debt and Interest Expenses - Interest Expense, Net for Q3 2025 was $53 million, down from $58 million in Q3 2024, primarily due to increased capitalized interest related to the Waco project [140]. - Interest Expense, Net for the first nine months of 2025 was $157 million, compared to $177 million in the same period of 2024, also due to increased capitalized interest [145]. - As of September 30, 2025, the Company maintained a maximum Consolidated Total Leverage Ratio of 3.76 to 1.00, compliant with the covenant limit of less than 4.25 to 1.00 [181]. - The Company reported a minimum Consolidated Interest Expense Ratio of 6.93 to 1.00 as of September 30, 2025, exceeding the required minimum of 3.00 to 1.00 [182]. - The Company had active interest rate swap agreements with a combined notional amount of $500 million, expiring on May 1, 2027, to manage interest rate risk [190]. Operational Highlights - Innovation sales growth contributed $52 million in Q3 2025, driven by sustainable consumer packaging solutions [138]. - The Company is focusing on developing innovative packaging products and expanding market share while reducing costs through operational improvements [135]. - The company experienced a decrease in income from operations due to lower pricing and higher commodity costs, partially offset by cost savings and productivity improvements [155]. - Net sales in the Americas Paperboard Packaging segment decreased due to lower pricing and packaging sales, while the International Paperboard Packaging segment saw an increase driven by innovation and higher volumes [154][156]. Receivables and Payables - Receivables sold and derecognized for the nine months ended September 30, 2025, were $2,725 million, compared to $2,687 million in 2024, representing an increase of 1.4% [176]. - The Company sold receivables related to supply chain financing arrangements amounting to $828 million for the nine months ended September 30, 2025, up from $793 million in 2024, reflecting a growth of 4.4% [177]. - Fees associated with the sale of receivables for the nine months ended September 30, 2025, were $43 million, down from $49 million in 2024, indicating a decrease of 12.2% [178]. - Accounts Payable included $32 million to suppliers participating in the supplier finance program as of September 30, 2025, compared to $30 million at December 31, 2024 [179]. - The deferred purchase price at September 30, 2025, was $47 million, an increase from $35 million in 2024 [176]. - Pledged receivables at September 30, 2025, were $140 million, down from $171 million in 2024, indicating a decrease of 18.1% [176]. Asset Valuation - The Europe reporting unit's fair value exceeded its carrying value by 24%, with goodwill totaling $534 million as of September 30, 2025 [187].

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%. Adjusted EPS was $0.58 [5][22][24] - Year-on-year volumes were down 2%, but the company outperformed most markets served [10][12] Business Line Data and Key Metrics Changes - The innovation platform contributed approximately $52 million in sales, representing about 2% of total sales [35] - The company reported a modest deceleration in packaging sales, down approximately 2% year-over-year, excluding the effect of foreign exchange [14] Market Data and Key Metrics Changes - The grocery volumes showed pressure, with upper-income consumers spending differently while lower-income consumers cut back due to rising food prices [9][10] - Food and household products remained steady, while beverage and food service markets were weaker [13][18] Company Strategy and Development Direction - The Waco facility is a critical investment aimed at enhancing the company's competitive advantage in recycled paperboard, expected to ramp up production over 12-18 months [8][9] - The company is transitioning from Vision 2025 to Vision 2030, focusing on free cash flow generation [5][28] Management's Comments on Operating Environment and Future Outlook - Management acknowledged challenges in the consumer packaging environment but expressed confidence in the company's ability to improve margins as demand normalizes [23][24] - The company plans to focus on cost control and inventory reduction to navigate the current market dynamics [24][25] Other Important Information - The company repurchased approximately 6.8 million shares year-to-date, reducing shares outstanding by 2.3% in 2025 [23] - A $400 million delayed draw term loan was secured to manage upcoming bond maturities, providing financial flexibility [27] Q&A Session Summary Question: Did the end markets track expectations in Q3? - Management clarified that there was no share loss; customer purchasing patterns affected volumetric performance, with the company outperforming overall market trends [35][36] Question: Confidence in Waco's EBITDA contribution for next year? - Management expressed high confidence in Waco delivering the expected $80 million EBITDA contribution, with adjustments based on market volumes [37][38] Question: Opportunities for productivity improvement? - Management highlighted various levers to improve efficiency, including capital expenditure reduction and inventory management [44][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 volume growth [50][51] Question: Impact of competitive price pressure on SBS and CUK? - Management confirmed 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-$75 million are primarily operating costs incurred during the facility's ramp-up, with a portion expected to carry into 2026 [80][83]

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]