Greif Reports Second Quarter 2023 Results

Second Quarter Financial Highlights include (all results compared to the second quarter of 2022 unless otherwise noted):
Net income of $111.2 million or $1.90 per diluted Class A share decreased compared to net income of $125.1 million or $2.09 per diluted Class A share. Net income, excluding the impact of adjustments(1), of $103.8 million or $1.77 per diluted Class A share decreased compared to net income, excluding the impact of adjustments, of $144.9 million or $2.41 per diluted Class A share.
Adjusted EBITDA(2) of $228.6 million decreased by $22.4 million compared to Adjusted EBITDA of $251.0 million.
Net cash provided by operating activities increased by $71.6 million to $210.8 million. Adjusted free cash flow(3) increased by $70.7 million to a source of $185.5 million.
Total debt of $2,289.2 million increased by $189.3 million primarily due to funds needed for the Centurion Container LLC (“Centurion”) and Lee Container acquisitions completed in fiscal Q2 2023 and Q1 2023, respectively, partially offset by the funds received from the Tama, IA mill divestiture in Q1 2023. Net debt(4) increased by $139.5 million to $2,130.7 million. Our leverage ratio(5) increased to 2.25x from 2.11x sequentially, which is within our targeted leverage ratio range of 2.0x – 2.5x, and increased from 2.12x in the prior year quarter.

Strategic Actions and Announcements
On March 31, 2023, we completed the previously announced transaction increasing our ownership stake in Centurion from approximately 10% to 80% in an all-cash transaction for $145.0 million. The one-month of contribution from Centurion is reported within the second quarter 2023 Global Industrial Packaging segment results, and our revised guidance includes the expected contribution from Centurion for the remainder of the year.

CEO Commentary
“The past three months have truly showcased the remarkable effectiveness of our Build to Last strategy,” commented Ole Rosgaard, President and Chief Executive Officer of Greif. “Despite operating in an environment of ongoing demand uncertainties, our teams have remained agile and resolutely focused on delivering exceptional value to our shareholders. They have successfully implemented cost rationalization measures within our system, driving robust cash flow generation and achieving the highest-ever second-quarter free cash flow in our company’s history. Additionally, we have achieved the second-highest second-quarter EBITDA, surpassing all quarters except the historic Q2 2022 comparative against which this quarter’s performance is measured. I am immensely proud of our teams, who continue to demonstrate unwavering dedication, motivation, and excellence in their work.”
details at: https://investor.greif.com/news-releases/news-release-details/greif-reports-second-quarter-2023-results

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