Greif Inc. · NYSE:GEF
Greif — Q4 2023 Earnings Presentation
25 slides from Greif's earnings presentation, Dec 7, 2023
Slide 1: Fiscal Fourth Quarter and Full Year 2023 Earnings Conference Call
Fiscal Fourth Quarter and Full Year 2023 Earnings Conference Call December 7, 2023
Slide 2: Safe Harbor
Safe Harbor December 7, 2023 P.2
Slide 3: Fiscal Year 2023 in Review
Fiscal Year 2023 in Review $5.2B $819M 1 15.7% 1 $481M 1 58.8% 1 $117M 1.7x - 2.2x Net Sales Adj. EBITDA Adj. EBITDA Margin Adj. Free Cash Flow Adj. FCF Conversion Cash Dividends Leverage Ratio2 Range (17.8%) YoY (10.8%) YoY +125 bps YoY (5.0%) YoY +350 bps YoY +7.5% per share YoY 2.0x – 2.5x Target
Slide 4: Fiscal Fourth Quarter 2023 Key Highlights
Fiscal Fourth Quarter 2023 Key Highlights Strong execution in Q4 2023 despite multiple continued headwinds ▪ Adj. EBITDA1 of $199.2M ▪ Adj. Free Cash Flow1 of $136.2M ▪ Adj. Class A EPS1 of $1.56/share Actively building for the future growth despite challenging short-term trends ▪ Weathered demand h
Slide 5: Global Industrial Packaging (GIP) Review
Global Industrial Packaging (GIP) Review FINANCIAL PERFORMANCE ($M) Q4 FY22 Q4 FY23 Net sales $824.9 $721.0 Gross profit $152.5 $154.4 Adjusted EBITDA1 $96.0 $104.2 Adjusted EBITDA % 11.6% 14.5% FQ4 ‘23 TAKEAWAYS ▪ Volumes remained historically weak throughout the quarter in most regions and end mar
Slide 6: Paper Packaging & Services (PPS) Review
Paper Packaging & Services (PPS) Review FINANCIAL PERFORMANCE ($M) Q4 FY22 Q4 FY23 Net sales $665.6 $581.6 Gross profit $155.6 $118.8 Adjusted EBITDA1 $120.8 $92.5 Adjusted EBITDA % 18.1% 15.9% FQ4 ‘23 TAKEAWAYS ▪ Lower mill volumes combined with rising price/cost pressure led to lower year-over-yea
Slide 7: FY 2024 Low-end Guidance and Assumptions
FY 2024 Low-end Guidance and Assumptions FISCAL 2024 LOW-END GUIDANCE KEY LOW-END ASSUMPTIONS FY 2024 Financial outlook ($M) Guidance ▪ Legacy GIP volumes (excluding M&A) flat year-over-year Adj. EBITDA1 $585m ▪ Marginal uplift in PPS volumes driven primarily by improving demand in containerboard ve
Slide 8: Pursuing Our Purpose, Vision and Build to Last Strategy
Pursuing Our Purpose, Vision and Build to Last Strategy OUR PURPOSE We create packaging solutions for life’s essentials OUR VISION Be the best performing customer service company in the world OUR STRATEGY MISSIONS CREATING DELIVERING PROTECTING ENSURING THRIVING COMMUNITIES LEGENDARY OUR FUTURE FINA
Slide 9: Evolving to Improve Business Operations and Value Creation
Evolving to Improve Business Operations and Value Creation Ongoing strategic initiatives under Build to Last set the stage for the future ▪ Greif is investing to build global scale and efficiency as we grow, with the dedicated centralization of Global Operations, Supply Chain, and Information Techno
Slide 10: Accelerating Our Growth through Targeted M&A
Accelerating Our Growth through Targeted M&A Growing our business through acquisitions to provide the most comprehensive suite of products offerings globally in high-performance jerrycans / small plastics 31 FACILITIES 18 COUNTRIES LEGEND Growing in the compelling jerrycan / Greif small plastics mar
Slide 11: Portfolio Transformation Underway for More Balanced Substrate Mix
Portfolio Transformation Underway for More Balanced 1,2 Substrate Mix FAV O R A B L E E N D 2022 2023+ M ARKET EXPOSURES GIP EBITDA by Agriculture Segment PPS Specialty Chemicals US EBITDA by EMEA Geography APAC & Other Americas Flavor & Fragrances Resin EBITDA by Steel Substrate Paper Pharma & Medi
Slide 12: Acquisitions Driving Improved Economics and FCF Conversion
1 Acquisitions Driving Improved Economics and FCF Conversion Strong free cash flow generation will enable ongoing deleveraging while continuing to grow the business FY21–22 Average 4.00x Target leverage ratio range 3.75x Compliance leverage ratio Illustrative compliance leverage ratio3 3.50x Adjuste
Slide 13: Greif Team is Executing Our Strategy and Performing Well in Dynamic Environment
Greif Team is Executing Our Strategy and Performing Well in Dynamic Environment Controlling what we can control to maximize financial performance under a challenging macro backdrop ▪ Aggressively managing costs and working capital to generate cash ▪ Investing in innovation and automation through Glo
Slide 14: Appendix
Fiscal Fourth Quarter and Full Year 2023 Earnings Conference Call Appendix December 7, 2023 P.14
Slide 15: Fiscal Q4'23 Sales Breakdown for Primary Products
Fiscal Q4’23 Sales Breakdown for Primary Products December 7, 2023 P.15
Slide 16: Balance Sheet and Cash Flows End Fiscal 2023 on Strong Footing
Balance Sheet and Cash Flows End Fiscal 2023 on Strong Footing BALANCE SHEET HIGHLIGHTS CASH FLOW HIGHLIGHTS FY22 FY23 Change FY22 FY23 Change Cash and cash equivalents $147m $181m $34m Cash flows from operations $658m $650m ($8m) Working capital as 9.3% 9.6% 0.3% Capital expenditures $176m $214m $3
Slide 17: IPACKCHEM Overview
1 IPACKCHEM Overview BUSINESS DESCRIPTION K E Y FAC T S 2 ▪ IPACKCHEM is a manufacturer of premium HDPE and PET-based blow- ~$235m ~65% ~$57m ~24% molded jerrycans, bottles and other packaging solutions and containers ▪ Specializes in solutions for the Agriculture, Specialty Chemicals, Flavors & FY2
Slide 18: Ensuring Financial Strength Through Disciplined Capital Allocation
Ensuring Financial Strength Through Disciplined Capital Allocation ▪ Fund critical maintenance and safety capex to protect the Maintenance Maintain a Strong business and ensure continuity of cash generation CAPEX Foundation ~40% ▪ Manage the balance sheet and debt levels appropriately through Debt t
Slide 19: GAAP to Non-GAAP Reconciliation: Net Income to Adjusted EBITDA
GAAP to Non-GAAP Reconciliation: Reconciliation of Net Income to Adjusted EBITDA Non-GAAP measures are intended to supplement and should be read together with our financial results. They should not be considered an alternative or substitute for, and should not be considered superior to, our reported
Slide 20: GAAP to Non-GAAP Reconciliation: Segment Operating Profit to Adjusted EBITDA
GAAP to Non-GAAP Reconciliation: Reconciliation of Segment Operating Profit to Adjusted EBITDA Non-GAAP measures are intended to supplement and should be read together with our financial results. They should not be considered an alternative or substitute for, and should not be considered superior to
Slide 21: GAAP to Non-GAAP Reconciliation: Net Income and Class A EPS
GAAP to Non-GAAP Reconciliation: Reconciliation of Net Income and Class A Earnings Per Share Excluding Adjustments Non-GAAP measures are intended to supplement and should be read together with our financial results. They should not be considered an alternative or substitute for, and should not be co
Slide 22: GAAP to Non-GAAP Reconciliation: Adjusted Free Cash Flow
GAAP to Non-GAAP Reconciliation: Reconciliation of Adjusted Free Cash Flow Non-GAAP measures are intended to supplement and should be read together with our financial results. They should not be considered an alternative or substitute for, and should not be considered superior to, our reported finan
Slide 23: GAAP to Non-GAAP Reconciliation: Net Debt
GAAP to Non-GAAP Reconciliation: Reconciliation of Net Debt Non-GAAP measures are intended to supplement and should be read together with our financial results. They should not be considered an alternative or substitute for, and should not be considered superior to, our reported financial results. A
Slide 24: GAAP to Non-GAAP Reconciliation: Compliance Leverage Ratio
GAAP to Non-GAAP Reconciliation: Reconciliation of Compliance Leverage Ratio Non-GAAP measures are intended to supplement and should be read together with our financial results. They should not be considered an alternative or substitute for, and should not be considered superior to, our reported fin
Slide 25: GAAP to Non-GAAP Reconciliation: 2024 Adjusted Free Cash Flow Guidance
GAAP to Non-GAAP Reconciliation: Reconciliation of 2024 Adjusted Free Cash Flow Guidance Non-GAAP measures are intended to supplement and should be read together with our financial results. They should not be considered an alternative or substitute for, and should not be considered superior to, our