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GI

GREIF, INC (GEF)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 2025 delivered resilient operational performance: revenue $1.135B, adjusted EBITDA $160.7M, and adjusted EPS $1.03, with strong adjusted free cash flow of $170.7M; consolidated gross profit rose to $257.3M despite mixed demand .
  • Versus S&P Global consensus, revenue modestly beat while EPS and EBITDA missed: revenue $1.135B vs $1.113B*, EPS $1.03 vs $1.205*, and EBITDA $142.6M vs $170.0M*; the variance reflects mix and non-GAAP adjustments amid segment softness and cost actions [GetEstimates]*.
  • Guidance was raised intra-quarter for the 11-month FY2025: Combined Adjusted EBITDA $725–$735M and adjusted FCF $305–$315M; after closing the containerboard sale (Sept 2), continuing-ops guidance was rebased to Adjusted EBITDA $507–$517M and adjusted FCF $290–$300M .
  • Strategic catalysts: portfolio reshaping (containerboard sale closed, timberlands sale signed), accelerated cost optimization ($20M run-rate), dividend increase to $0.56/$0.84; management highlighted operating leverage as volumes recover and capital deployment optionality at sub-1.2x pro forma leverage .

What Went Well and What Went Wrong

What Went Well

  • Adjusted EPS up 11.6% YoY to $1.03 and adjusted EBITDA up 2.4% YoY to $160.7M; combined adjusted EBITDA up 11% YoY to $220.9M including discontinued operations .
  • Strong cash generation: net cash from operating activities $199.9M; adjusted free cash flow $170.7M, up ~$136M YoY; leverage ratio reduced to 3.1x (from 3.6x) .
  • Management quote underscoring execution and cash discipline: “our strong $171 million of adjusted free cash flow generation… ramping up our cost optimization, and executing on portfolio changes” .

What Went Wrong

  • GAAP diluted EPS declined YoY due to prior-year gains (Delta Petroleum divestiture); Class A diluted EPS from continuing ops fell to $0.67 from $1.34; GAAP net income decreased to $39.3M from $78.0M .
  • Segment softness: Durable Metal volumes -5.8%; Sustainable Fiber volumes -7.6%; Integrated Solutions gross margin down 160 bps due to mix/OCC costs; IBCs weakness offset by small polymer growth .
  • EBITDA/EPS missed S&P consensus despite revenue beat, reflecting volume/mix headwinds and restructuring costs; EBITDA actual (S&P basis) $142.6M vs $170.0M* and EPS $1.03 vs $1.205* [GetEstimates]*.

Financial Results

Consolidated Performance (chronologically ordered: older → newer)

MetricQ3 2024Q1 2025Q2 2025Q3 2025
Revenue ($USD Millions)$1,164.9 $1,265.8 $1,385.7 $1,134.7
Gross Profit ($USD Millions)$244.9 $245.5 $319.5 $257.3
Adjusted EBITDA ($USD Millions)$157.0 $145.1 $213.9 $160.7
Diluted EPS – Continuing Ops (Class A) ($)$1.34 $0.15 $0.82 $0.67
Adjusted EPS (Non-GAAP, Class A) ($)$0.92 $0.39 $1.19 $1.03

Q3 2025 Actual vs S&P Global Consensus

MetricConsensusActualSurprise
Revenue ($USD Millions)$1,113.4*$1,134.7 +$21.3M (beat)*
Primary EPS ($)$1.205*$1.03 -$0.18 (miss)*
EBITDA ($USD Millions)$170.0*$142.6*-$27.4M (miss)*

Values retrieved from S&P Global.*

Segment Breakdown (Q3 2024 → Q3 2025)

SegmentNet Sales Q3 2024 ($MM)Net Sales Q3 2025 ($MM)Adj. EBITDA Q3 2024 ($MM)Adj. EBITDA Q3 2025 ($MM)
Customized Polymer Solutions$314.7 $339.8 $40.5 $39.4
Durable Metal Solutions$424.1 $399.8 $45.6 $47.7
Sustainable Fiber Solutions$325.6 $308.0 $57.1 $65.5
Integrated Solutions$100.5 $87.1 $13.8 $8.1

KPIs and Operating Drivers

KPIQ3 2025 YoY ChangeNotes
Customized Polymer volumes+2.2% Low double-digit growth in small containers; offset by mid-single-digit declines in IBCs and large drums .
Durable Metal volumes-5.8% Softness in North America (low double-digit) and EMEA (low single-digit); strategy focuses on value over volume .
Sustainable Fiber volumes-7.6% URB mills >90% capacity; converting mixed; gross margin up 360 bps on better published price/cost .
Integrated Solutions volumes+2.6% Gross margin down 160 bps due to product mix; OCC drove margin squeeze .
Net cash provided by operating activities$199.9M Adjusted FCF $170.7M .
Leverage ratio3.1x (TTM Credit Agreement basis) Down from 3.6x; adjusted net debt $2,382.2M .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Combined Adjusted EBITDAFY2025 (11 months, incl. discontinued ops)$725M low-end (Q2) $725–$735M (Q3) Raised from low-end to range
Adjusted Free Cash FlowFY2025 (incl. discontinued ops)$280M low-end (Q2) $305–$315M (Q3) Raised
Adjusted EBITDA (Continuing Ops)FY2025 (post-close)N/A$507–$517M (rebased after containerboard sale) Rebased (excludes ~$50M expected Q4 containerboard EBITDA)
Adjusted Free Cash FlowFY2025 (post-close)N/A$290–$300M (adjusted for lack of Sept containerboard cash) Rebased
Effective Tax RateFY202527–32% (Q2) 27–32% (Q3) Maintained
Dividend (Quarterly)Q3 2025$0.54 (Class A), $0.81 (Class B) $0.56 (Class A), $0.84 (Class B) Raised

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1 & Q2)Current Period (Q3)Trend
Portfolio transformationQ1: planned timberlands sale; plant closures (Austell GA, Fitchburg MA) . Q2: continued progress on timberlands sale; improved price/cost in Fiber .Containerboard sale expected to close end of Aug (closed Sept 2); timberlands closing planned Oct 1 for tax optimization .Accelerating; transactions executed/near completion.
Cost optimizationQ1: $13M run-rate achieved . Q2: $10M run-rate achieved; target $15–$25M exit FY25 .$20M run-rate achieved; SG&A reductions a key driver of guidance raise .Ahead of plan; SG&A savings flowing through.
Demand environmentQ1/Q2: multi-year industrial contraction; cautious volumes .Metals and fiber end markets remain soft; polymers targeted end markets outperform (Agrochemicals, Pharma, F&F, Food & Bev) .Mixed; targeted polymers resilient, industrial softness persists.
Tariffs/macroLimited impact historically .Tariff impacts “well below $10M”; local sourcing mitigates risk .Neutral; minimal direct impact.
OCC/recycling (Integrated Solutions)Not highlighted in prior quarters.OCC cost pressures drove margin squeeze; secure OCC supply viewed strategically .Near-term headwind; strategic supply advantage maintained.
Capital allocation & leverageQ1: leverage 3.63x; debt up due to Ipackchem . Q2: leverage 3.3x .Pro forma leverage expected <1.2x after transactions; ability to do $1–3B deals while returning to target 2–2.5x quickly .More optionality; capacity for tuck-ins and larger deals.

Management Commentary

  • CEO: “Greif continued to execute this quarter, as evidenced in particular by our strong $171 million of adjusted free cash flow generation… ramping up our cost optimization, and executing on portfolio changes…” .
  • CFO on quarterly drivers: “Adjusted EBITDA dollars increased $4 million, while EBITDA margins increased 70 basis points, driven by improved price/cost in our Fiber, Polymers and Integrated segments…” .
  • CEO on strategic focus: “We continue to accelerate our portfolio transformation and cost optimization… divestment of our containerboard business… and timberland divestment… will put our leverage ratio below 1.2x” .
  • CFO on guidance mechanics: “Our revised 11-month guidance midpoint of $730 million of EBITDA… raised $5 million… free cash flow midpoint… raised $30 million… primarily from better SG&A and lower expected CapEx timing” .

Q&A Highlights

  • Guidance raise attribution: Increase primarily from SG&A cost reductions; no containerboard impact embedded in the raise (pre-close) .
  • Metals & pricing: Steel indices relatively flat; no significant index changes anticipated entering next quarter .
  • Polymers performance: Strength in Food & Bev and Agrochemicals; IBCs down, offset by double-digit growth in small polymer products .
  • Capital allocation post-divestitures: Target free cash flow conversion ~50%; ~$120M interest savings next year if no acquisitions; prioritization across dividends, maintenance, debt paydown, organic growth .
  • M&A pipeline: Active across caps/closures and polymers (≥18% EBITDA margin and ≥50% FCF conversion targets); capacity to do $1–3B deals while returning to leverage target quickly .
  • Integrated Solutions margin: OCC was “the big driver” of margin squeeze; secure supply viewed strategically .

Estimates Context

  • For Q3 2025, S&P Global consensus vs actual: revenue beat, EPS and EBITDA missed. Revenue $1.135B vs $1.113B*, EPS $1.03 vs $1.205*, EBITDA $142.6M vs $170.0M* [GetEstimates]* .
  • Implications: Street likely revises near-term EBITDA/EPS lower for continuing operations given lingering volume softness and restructuring costs, while acknowledging cash generation and SG&A progress .

Values retrieved from S&P Global.*

Key Takeaways for Investors

  • Portfolio transformation is the narrative: containerboard sale closed and timberlands sale signed, sharpening focus on higher-margin polymers/caps and integrated fiber positions; expect improved durability of earnings and capital efficiency .
  • Cash generation is a differentiator: $199.9M CFO and $170.7M adjusted FCF in Q3; leverage improved to 3.1x pre-close and expected <1.2x post transactions, expanding deployment optionality .
  • Near-term EPS/EBITDA pressure vs Street reflects industrial softness and restructuring; SG&A and price/cost are partially offsetting; monitoring volumes into FY2026 is key [GetEstimates]*.
  • Segment mix matters: Durable Metals prioritizes value over volume; Sustainable Fiber benefiting from published price/cost; Polymers’ targeted end markets continue to outperform .
  • Guidance reset post divestiture clarifies continuing-ops baseline; watch for FY2026 framework incorporating cost run-rate ($50–$60M exiting next year) and organic investments .
  • Dividend increase underscores capital return discipline amid transformation; consider for income-oriented mandates .
  • Trading lens: near-term catalysts include FY2025 continuing-ops delivery vs rebased guidance, inorganic moves in caps/closures, and volume inflection in polymers/fiber; risk is prolonged industrial softness dampening operating leverage .

Additional Relevant Press Releases (Q3 2025 context)

  • Dividend increase ($0.56 / $0.84), payable Oct 1; signals confidence and capital return continuity .
  • Closure of Merced, CA facility as part of $100M cost program (43 positions affected); supports SG&A/network optimization targets .
  • Timberlands sale agreement ($462M) expected Oct 1 close for tax optimization; contributes to deleveraging and capital redeployment .
  • Containerboard sale completed Sept 2; guidance rebased to continuing ops with Adjusted EBITDA $507–$517M and adjusted FCF $290–$300M .

Notes on non-GAAP: Adjusted EPS and Adjusted EBITDA exclude acquisition/integration, restructuring, impairments, gains/losses on asset and business disposals, and other costs; reconciliations provided in company schedules .