Matt Roberts

Matt Roberts asked for the sales and EBITDA contribution of the recently announced divestments, the line of sight for the remaining $900 million in non-core assets, and any potential impact on leverage or timing.

Answer

Michael Casamento, CFO of Amcor, clarified that one divestment was a small European plant with sales less than $20 million and minimal earnings impact, while the other was an equity-accounted joint venture. He stated that the proceeds of $100 million would be used to pay down debt and that Amcor continues to work on other non-core businesses, including North American beverage.

Matt Roberts inquired about the sales and EBITDA contribution of the recently announced divestments, the remaining $900 million in non-core assets, how the multiples compared to prior expectations, and the line of sight for the remaining divestments, including potential impacts on leverage or timing.

Answer

CFO Michael Casamento clarified that one divestment was a small European plant with sales under $20 million, and the other was an equity-accounted joint venture, both contributing to the $100 million in proceeds used for debt reduction. He noted that the company continues to focus on other non-core businesses, including North American beverage.

Matt Roberts asked about the drag from competitive price pressure on SBS and CUK versus CRB in Q4, its expected duration, and whether Graphic Packaging could sell incremental SBS/CUK at the expense of CRB given the price spread. He also inquired about changes in sales mix by paper types, expected shifts in 2026, and how Waco's tons would impact the mix. He followed up by asking about flexibility in CapEx for next year, specifically if growth projects could be deferred to bring the 5% of sales target lower.

Answer

Mike Doss (President and CEO, Graphic Packaging) clarified that there was no share loss due to SBS/CUK competition, emphasizing that CRB is significantly cheaper to produce than SBS, making substitution unprofitable. He stated that the pressure was on package price, not paperboard, and expressed confidence in protecting and growing share with high-quality, low-cost CRB. He noted that CapEx requirements for virgin paperboard are four times that of recycled. Regarding CapEx flexibility, he confirmed they are looking at all options and will provide a clearer view for 2026, but reiterated confidence in the $350 million year-on-year inflection.

Matt Roberts asked about the impact and expected duration of competitive price pressure from SBS and CUK on CRB in Q4, inquiring if Graphic Packaging could leverage incremental SBS/CUK sales and how its sales mix by paper type might change in this environment, including the layering of Waco's tons in 2026. He also asked about flexibility in CapEx for next year and potential deferral of growth projects.

Answer

President and CEO Mike Doss stated that Graphic Packaging has not lost share, emphasizing that SBS is significantly more expensive to produce than CRB. He noted that the competitive pressure primarily affected package pricing rather than paperboard levels, and expressed confidence in protecting and growing share with high-quality, low-cost CRB from their platform, including Waco. He added that they are looking at all CapEx options and are confident in a $350 million inflection.

Matt Roberts asked for a breakdown of Dispensing and Specialty Closures' revenue mix exposure to personal and home care products, the expected decline in these markets, and the drivers behind 15% fragrance growth. He also inquired about the potential growth contribution from healthcare and pharma in 2026 and an update on Vayner's trailing 12-month revenue/EBITDA and synergy achievement, clarifying if personal/home care impacts were isolated to legacy products.

Answer

Adam Greenlee, President and CEO, Silgan Holdings, stated that personal care and home care volumes were expected to decline by a mid-single-digit percentage in Q4. He attributed fragrance growth to winning new product launches and innovation in the premium segment, deferring 2026 healthcare/pharma specifics. Bob Lewis, EVP of Corporate Development and Administration, Silgan Holdings, noted personal care/home care margins are average for dispensing. Greenlee confirmed personal care/home care impacts were in legacy Silgan business, not Vayner, and that $20 million of $25 million synergies have been delivered, with Vayner's portfolio performing well post-integration.

Matt Roberts inquired about the financial and operational impact of a customer bankruptcy on the Metal Containers segment, including the potential revenue loss and long-term outlook for 2026. He also sought clarification on the revised EBIT guidance for the Dispensing and Specialty Closures segment and the performance of legacy dispensing volumes versus the newly acquired Vayner business.

Answer

President & CEO Adam Greenlee explained that the company mitigated financial risk from the bankruptcy filing but expects a $10M EBIT impact in 2025 due to the customer shifting volume to co-packers Silgan doesn't supply. He noted Silgan's competitively advantaged on-site facilities and readiness to right-size capacity if needed. SVP & CFO Kim Ulmer clarified the DSC EBIT guidance revision was solely due to a $10M headwind from hot-fill beverage closures, not other performance issues. Greenlee added that legacy dispensing growth remains strong, and the Vayner integration is uncovering new commercial synergies, particularly in the high-end fragrance and beauty markets.

Matt Roberts inquired about the reasons behind the projected softer North America growth in 2026, described as a 'transition year,' despite innovation in the energy portfolio. He also asked for an update on potential capacity additions in Europe, specifically regarding timing, volume outlook, and any implications for 2026 CapEx.

Answer

Oliver Graham (CEO) explained that North America's softer 2026 outlook is due to contract resets and specific footprint situations, such as changes in customer filling locations and competitor plant proximity, but anticipates good growth in 2027. For Europe, he confirmed the market remains tight, especially for certain sizes, and there's no change to the timing of needing new capacity, with projects planned for Q4/Q1 to address specialty size constraints.

Matt Roberts questioned the reasons behind the projected 'transition year' for North America's 2026 growth, especially given innovation in the energy portfolio. He also asked if Europe's volume outlook had changed the timing for potential capacity additions, particularly in Southern Europe, and about 2026 CapEx.

Answer

CEO Oliver Graham explained that 2026 softness in North America was due to contract resets and specific footprint situations, where customers moved to closer plants. He affirmed no change to Europe's capacity timing, noting the market remains tight, especially for certain sizes, and that new capacity would be built with flexibility.

Matt Roberts asked about inventory build expectations for Q4 2025, areas of the portfolio Crown Holdings might lean into or diversify away from in 2026 due to innovation or competition, and whether the strong European volume trend was broad-based across Continental Europe or specific to Southern Europe. He also inquired about the impact of expanded tourism season on European seasonality and plans for addressing 2026 debt maturities.

Answer

President and CEO Tim Donahue expressed no intention to lean away from any part of the portfolio, but highlighted mindfulness of inflation, particularly from higher delivered aluminum prices, and its potential impact on consumers and demand in North America. He confirmed that the strong European growth was broad-based across their Continental European portfolio and that tourism's impact is primarily seasonal from May to September, not extending significantly into October. SVP and CFO Kevin Clothier stated that cash on the balance sheet is sufficient to settle 2026 notes, and interest expense for next year is expected to be largely in line with this year.

Matt Roberts questioned the 2026 outlook, including expectations for inventory build in Q4, and whether the company plans to lean into new innovation areas or diversify away from competitive pockets. He also asked about the broadness of Continental European growth and the impact of tourism seasonality. Finally, he inquired about plans for 2026 debt maturities and the interest expense outlook.

Answer

President and CEO Tim Donahue expressed no plans to diversify away from any segments, but highlighted concerns about higher delivered aluminum prices and potential inflationary impacts on North American demand. He confirmed broad-based growth in Continental Europe and noted tourism's seasonal impact (May-September). SVP and CFO Kevin Clothier stated that cash on the balance sheet would cover 2026 debt maturities, with interest expense expected to be largely in line with 2025.

Matt Roberts of Raymond James Financial asked about the upper leverage range Greif would consider for a potential deal and the appetite for a transformative acquisition. He also requested color on the remaining Fiber business post-divestiture and the cause of margin variance in the Integrated Solutions segment.

Answer

EVP & CFO Larry Hilsheimer stated that while the company targets 2-2.5x leverage, it would exceed that for the right strategic deal, given its ability to deleverage quickly. He noted no transformative deals are currently on the market. Both Hilsheimer and President, CEO & Director Ole Rosgaard emphasized Greif's strong market leadership in the remaining Fiber businesses. Hilsheimer attributed the Integrated Solutions margin pressure to higher OCC costs impacting the recycled fiber business.

Matt Roberts of Raymond James Financial asked about the strategy for free cash flow and share repurchases for the remainder of 2025, noting the stock's valuation. He also questioned at what point the company might pivot to M&A to drive growth if Intelligent Label rollouts continue to be slower than expected.

Answer

SVP & CFO Greg Lovins affirmed the continuation of their disciplined capital allocation strategy, including share buybacks, and stated the balance sheet has ample capacity for organic investments, dividends, and M&A. He noted they are actively pursuing M&A across all high-value categories. President & CEO Deon Stander added that the current leverage ratio of 2.3x provides flexibility and that the M&A pipeline remains robust.

Matt Roberts of Raymond James Financial questioned the capital allocation strategy, focusing on the high level of share repurchases, the 2025 free cash flow outlook, and at what point the company might pivot to M&A for growth if Intelligent Labels (IL) rollouts remain slow.

Answer

SVP & CFO Greg Lovins reiterated the company's disciplined capital allocation strategy, confirming that share buybacks continued in Q2. He emphasized the balance sheet provides capacity for organic investment, dividends, buybacks, and M&A. President & CEO Deon Stander added that with a leverage ratio of 2.3, the company has the flexibility to pursue strategic M&A opportunities from its robust pipeline when they align with strategy and market conditions are favorable.

Matt Roberts from Raymond James Financial inquired about the company's strategy for free cash flow and share repurchases, given the near-record buyback levels. He also asked at what point the company might pivot to inorganic growth if Intelligent Labels (IL) growth continues to be slower than expected.

Answer

SVP & CFO Greg Lovins affirmed the continuation of their disciplined capital allocation strategy, including share buybacks, while the stock price remains attractive. He emphasized that the strong balance sheet provides capacity for organic investments, dividends, buybacks, and M&A. President & CEO Deon Stander added that with a leverage ratio of 2.3x and a robust M&A pipeline, the company has the flexibility to act on strategic opportunities.

Asked for clarification on the April volume trends, checking for potential distortions and seeking confirmation on Q3 consensus expectations. Also inquired about the cash proceeds from recent divestitures and the nature of future portfolio optimization transactions.

Answer

Industrial categories that had a bigger headwind from destocking last year will provide a nice tailwind in H2. The expected $80 million H2 improvement over H1 will be spread slightly more to Q4, which is in line with the analyst's numbers. The proceeds from the two divestitures in the quarter were very similar to the purchase price for F&S Tool. Future opportunities are expected to be cash transactions.