Richard Carlson

Richard Carlson asked about the fiscal year 2026 EBITDA guidance range, specifically inquiring about the underlying volume assumptions, mix, price, and the key drivers behind the expected EBITDA margin expansion.

Answer

Jim Till, CFO, explained that margin expansion is primarily driven by continued synergy realization, expecting 70-75% of remaining synergies next year, and Project CORE initiatives ramping up from Q1 with full realization in Q2-Q4. He noted that overall volumes are expected to be flattish with regional variations, which accounts for the wider guidance range. Curt Begle, CEO, added that the company will be lapping challenging South America comps in the first two quarters, offset by positive growth signals in the U.S. and a cautious outlook for Europe.

Richard Carlson asked about Magnera's capital expenditures (CapEx) running at 2-3% of sales, questioning how long this level is sustainable, if it adequately capitalizes the business, and requested a reminder of the multi-year CapEx projection.

Answer

CEO Curt Begley explained that post-combination, Magnera's facilities were found to be well-capitalized, contrary to some expectations. He highlighted an internal capital committee that reviews projects for ROIC, maintenance, and safety, ensuring no sacrifice in these critical areas. Growth projects often involve upgrading existing contemporary and niche assets rather than investing in new, expensive lines. The team has also optimized vendor alignment for spare parts and equipment. He stated that while the current CapEx level is sufficient, there will be a future pivot to larger growth investments and new lines as market conditions warrant, guided by Project CORE and prioritizing businesses with the greatest right to win.

Richard Carlson from Wells Fargo, on for Gabe Haiti, asked about the impact of scrap metal pricing on Ball's business.

Answer

CEO Daniel Fisher stated that the impact from scrap metal pricing is 'negligible' for Ball. He explained that most of their contracts are on a tolling basis, where the customer controls the metal. Fisher added that the company is more concerned about the broader demand-side impact of tariffs on the economy than about specific movements in the metal market.

Speaking for Gabe Haiti, Richard Carlson asked about the impact of scrap metal pricing on the business.

Answer

CEO Daniel Fisher explained that the impact is negligible because most contracts are tolling arrangements where the customer manages scrap. He added that the company is more concerned about the broader economic demand-side effects of tariffs than any specific movements in the metal market.

Richard Carlson, on for Gabe Hajde, asked about the impact of scrap metal pricing on the business.

Answer

Chairman & CEO Daniel Fisher stated that the impact from scrap metal pricing is 'negligible' because most contracts are tolling arrangements where the customer controls the metal. He added that the company is more concerned about the broader economic demand impact from tariffs than any isolated movements in the metal market.

Richard Carlson from Wells Fargo followed up on the conservative back-half guidance, asking about cost drivers and growth rate changes. He also inquired about energy drink market dynamics, potential CSD cannibalization, and any customer feedback on the 'MAHA movement' towards less artificial ingredients.

Answer

CEO Oliver Graham clarified the H2 guidance reflects appropriate caution after a very strong H1 in the Americas and an expected reversion to market growth rates in Brazil, with no new major cost items. He stated that both energy drinks and CSDs in cans are growing well with no signs of cannibalization. He also reported no specific customer concerns regarding the 'MAHA movement' impacting their business.

An analyst, on for Richard Carlson, asked if the timberland sale indicates a full M&A pipeline for capital redeployment. They also questioned the competitive landscape in polymers and metals, specifically whether smaller competitors are showing signs of stress.

Answer

CFO Lawrence Hilsheimer clarified that the primary purpose of the timberland sale is to pay down debt, although the company's M&A pipeline remains robust. CEO Ole Rosgaard addressed competition by stating Greif's strategy is to focus on 'value over volume.' He explained that while some competitors may chase volume with lower prices, Greif's superior service and quality often lead customers to return, and he is confident they have not lost market share.

Richard Carlson from Wells Fargo & Company sought clarification on the 2026 leverage target, asking about key factors beyond asset sales and synergies. He also inquired about the future direction of capital expenditures and whether they would trend towards maintenance levels.

Answer

CEO Howard Coker clarified that CapEx is now weighted more towards value-added growth projects, representing about 60% of the total. Interim CFO Jerry Cheatham affirmed the leverage target of 3.0x to 3.3x by the end of 2026, achievable through strong free cash flow and proceeds from the ThermoSafe divestiture. Cheatham added that CapEx is expected to remain in the 4.5% to 5.5% of sales range, with a continued focus on growth.