Graphic Packaging Holding Company · NYSE:GPK
Graphic Packaging — Q2 2024 Earnings Presentation
18 slides from Graphic Packaging's earnings presentation, Jul 30, 2024
Slide 1: Second Quarter 2024 Earnings
Second Quarter 2024 Earnings July 30, 2024 © 2024 Graphic Packaging Holding Company
Slide 2: Forward-Looking Statements
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 2024 Innovation Sales Growth, third quarter consumer purchasing and consumption trends, plastic use r
Slide 3: Second Quarter 2024 Highlights
Second Quarter 2024 Highlights Strategic Updates ▪ Divested Augusta bleached paperboard manufacturing facility ▪ Approximately 95% of sales from sustainable consumer packaging solutions post-divestiture ▪ Waco investment project on schedule; will extend cost and quality advantage across North Americ
Slide 4: Graphic Packaging's products are in the hands of tens of millions of consumers
Graphic Packaging’s products are in the hands of tens of millions of consumers multiple times a day Food Beverage Foodservice Household Health & Beauty 39% 22% 22% 13% 4% 4 Note: Percentages represent 2023 Sales Mix
Slide 5: Consumer Packaging Sales by Market
Consumer Packaging Sales by Market Foodservice outperforming sector, Beverage strong, Food improving1 2022 FY 2023 FY 2024 Q2 Q3 Q4 2022 Q1 Q2 Q3 Q4 2023 Q1 Q2 Food Beverage Foodservice Household Health & Beauty Total 5 1. YoY unadjusted; excludes Russia.
Slide 6: Seasonality, Experience, and Expectations
Seasonality, Experience, and Expectations Typical Second Quarter 2024 Experience Q1 Q2 Q3 Q4 Seasonality Food ▪ Volume flat, Europe leading recovery Beverage ▪ Branded promotional plans accelerating Foodservice ▪ Private label growth ahead of overall market Household ▪ Managing modest price headwind
Slide 7: High Engagement with Customers Across Five Innovation Platforms
High Engagement with Customers Across Five Innovation Platforms Addressable Market Opportunity $15 Billion $5.0B $4.0B $1.5B $2.5B $2.0B Trays & Bowls Cups & Containers Multi-Packs Paperboard Canisters Strength Packaging 7
Slide 8: Commercializing Innovation: PaperSeal Shape
Commercializing Innovation: PaperSeal™ Shape INNOVATION CUSTOMER LAUNCH ADDRESSABLE OPPORTUNITY PaperSeal™ Shape1 in a wide range First UK launch: Sainsbury’s popular ✚ $5.0B global tray and bowl market of shapes and sizes reduces plastic breaded chicken line, across 2,000+ opportunity by 72%+; ensu
Slide 9: Global Leader in Sustainable Consumer Packaging
Global Leader in Sustainable Consumer Packaging Innovation Culture Planet Results Build the leading Enable a safe, inclusive, Steadily and measurably Consistently execute for sustainability-focused customer-focused improve the environmental customers, shareholders consumer packaging culture footprin
Slide 10: Second Quarter 2024 Financials
Second Quarter 2024 Financials Sales ▪ Packaging sales ($73M), or (3%) ▪ Volume flat ($M excl EPS) Q2’24 Q2’23 ∆ YoY ▪ Price modestly lower (2%) Net Sales $2,237 $2,392 -6% ▪ Mix (1%) ▪ Impact of Augusta divestiture and related bleached paperboard sales ($83M) YoY, or (3%) Net Income $190 $150 +$40
Slide 11: Operations and Capital Investment Update
Operations and Capital Investment Update Bleached Paperboard Optimization ▪ Divestiture of Augusta, GA bleached paperboard manufacturing facility completed on May 1 st ▪ Texarkana, TX re-optimized to support internal consumer packaging needs Waco, TX Recycled Paperboard Investment ▪ Construction and
Slide 12: Return of Capital
Return of Capital Every use of capital compared against share repurchase $ and shares in millions except per share values Q2 ’24 Cash Dividends $30 + Share Repurchase $200 = Capital Returned to Stockholders $230 Share Repurchase Results: # of Shares Repurchased ~7.2 Average Price per Share $27.61 Re
Slide 13: Full-Year 2024 Outlook & Guidance
Full-Year 2024 Outlook & Guidance Expect positive full-year consumer packaging volume/mix growth ▪ 1H ’24: (~2%) ▪ 2H ’24: 3% - 4% On track to achieve $200M Innovation Sales Growth Expect full-year Adjusted EBITDA margins in the 19% to 20% range Adjusted EBITDA & Adjusted EPS Guidance unchanged ▪ 20
Slide 14: Vision 2030 Base Financial Model and Capital Allocation Priorities
Vision 2030 Base Financial Model and Capital Allocation Priorities Base Model: Annual Sales Annual Adj Annual Adj Normalized Capex Growth EBITDA Growth EPS Growth (% of sales) Low-Single Digits Mid-Single Digits High-Single Digits ~5% Base1: $8.8B Base1: $1.75B Base1: $2.74 After 2025 Capital Priori
Slide 15: Significant Cash Flow to Deploy for Value Creation
Significant Cash Flow to Deploy for Value Creation ~$5B+ Cash Flow (~$17/share) 2024-2030 Vision ~$2.5B Cash Flow (~$8/share) 2030 2024-2027 2029 2028 ~$1B Cash Flow ~$1B Cash Flow 2027 2nd incremental 2026 $80M Waco Incremental EBITDA 2025 $80M Waco ~$900M to ~$1B EBITDA Cash Flow CapEx Cycle Wind
Slide 16: Appendix
Appendix 16 16 © 2024 Graphic Packaging International, LLC.
Slide 17: Supplemental Guidance Information
Supplemental Guidance Information $ in millions 2024 Capital Spending ~$1,000 Interest Expense $225 - $240 Cash Interest $210 - $225 Cash Taxes, Working Capital, Pension ~$300 Effective Tax Rate ~25% Depreciation & Amortization $445 - $4551 Estimated Year-end Net Leverage ~2.7x 17 1. Excludes accele
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