Magnera Corp Q2 FY2026 earnings call

• Key themes: Earnings of $90 million adjusted EBITDA in line with expectations after weather-related factors, strong free cash flow enabling debt paydown, impact of winter storms and Middle East war on operations, and strategic investments. • Americas: North America impacted by winter storms, with plants shut down temporarily; South America showed early signs of improvement. • Rest of World: European wipes business had strength but offset by general market softness; progress on sustainability initiatives like reducing energy consumption and setting emission reduction targets. • Capital allocation: Paid $36 million of debt during the quarter, with $63 million repurchased in first half of fiscal 26, and $600 million available liquidity at quarter end.

Americas: Despite winter storm impacts, achieved volume growth in adult infrastructure categories; adjusted EBITDA declined by $6 million compared to prior year. Rest of World Division: Revenues declined year-over-year, but adjusted EBITDA increased by 19% to $32 million due to discipline cost management and synergy realization.

• Target range remains unchanged after incorporating March inflation. • Expect some headwinds in third quarter due to raw material inflation volatility, followed by recovery in quarter four. • Free cash flow range remains 90 to 110, and EBITDA target range 380 to 410.

• Macroeconomic uncertainty, including tempered demand in Europe. • Geopolitical conflicts causing higher operational costs and supply chain disruptions. • Volatility in raw material inflation magnitude and timing affecting earnings and cash flow.

Q: Gabe Hady with Wells Fargo asked about raw material pass-throughs, order patterns, etc.

A: Kurt and Jim discussed collaboration with customers on pricing, normal order bookings, and fulfilling orders impacted by storms.

Q: Kevin McCarthy with Vertical Research Partners inquired about pricing shift, EBITDA impact of winter storms, and free cash flow.

A: Kurt elaborated on monthly pricing shift reception, Jim updated on free cash flow moving parts.

Q: Roger Spitz with Bank of America asked about sales split by contract, general price change, and spot sales.

A: Answered on sales split and pricing mechanisms.

Q: Edward Bruckner with Barclays asked about non-contract pricing and capital allocation.

A: Explained non-contract pricing and capital allocation approach.

Q: Kevin McCarthy followed up on sequential margin progression and customer order patterns.

A: Talked about sequential margin trajectory and customer order behavior