Graphic Packaging Holding Company Q1 FY2026 earnings call

Robert Rebrook mentioned the 90-day review confirmed the foundation is strong, talented teams, and integrated asset base. They are focused on five near-term strategic priorities: disciplined organic growth and exceptional customer service, profitability improvements through cost initiatives etc., optimizing operations, generating free cash flow, and using it to pay down debt and return capital to shareholders. Chuck Lisher talked about sales, adjusted EBITDA, impact of weather, maintenance, cost savings, inflation, and guidance for Q2 and 2026. They reorganized commercial team, divested non-core assets in Croatia, took actions to streamline workforce, deployed AI for inventory and procurement, and have been recognized for sustainability.

Net sales were up 2% year-over-year to $2.2 billion. Volumes were up 1% compared to last year. Adjusted EBITDA was $232 million. Adjusted EBITDA margin was 10.8%, and adjusted EPS was 9 cents. Food and health and beauty were bright spots with higher packaging volumes from value products and consumption of everyday essentials. Health and Beauty delivered strong growth. Beverage business remained stable. Food service and household reflected ongoing consumer affordability trends. Innovation sales growth was $42 million in the quarter.

2026 adjusted EBITDA expected in range of $1.05 billion to $1.25 billion, unchanged from prior guidance. Adjusted free cash flow outlook remains $700 million to $800 million. Expect to pay down approximately $500 million of debt in 2026. Capital expenditures in 2026 are expected to be approximately $450 million. Q2 adjusted EBITDA expected to be in range of $230 million to $250 million.

Risks include factors identified in press release and SEC filings such as geopolitical uncertainty, inflation, competitive pricing, weather disruptions, and regulatory scrutiny on single-use plastics and foam packaging.

Q: On heat map on slide five and realigned commercial teams; A: Talked about food market trends and commercial team realignment.

Q: On EBITDA reconciliation and commodity costs; A: Explained special charges and inflation impact.

Q: On breakdown of guidance and incentive compensation; A: Included in original numbers.

Q: On pricing and SBS; A: Talked about paper board grades and supply-demand.

Q: On free cash flow and CapEx; A: Discussed inventory, Waco, and CapEx reduction.

Q: On Cupstock and customer activity; A: Talked about Cupstock input cost and customer discussions on supply assurance