Loading...
Docoh

Greif (GEF)

Participants
Matt Eichmann Vice President, Investor Relations & Corporate Communications
Pete Watson Vice President and Chief Executive Officer
Larry Hilsheimer Chief Financial Officer
George Staphos BofA Securities
Gabe Hajde Wells Fargo
Mark Wilde BMO Capital Markets
Adam Josephson KeyBanc
Matt Krueger Robert W. Baird
Justin Bergner Gabelli
Call transcript
Due to licensing restrictions, you must log in to view earnings call transcripts.
Operator

Good day, and thank you for standing by. Welcome to the Greif’s Q2 2021 Earnings Call. At this time, all participants are in a listen-only mode. Please be advised that today's conference is being recorded. After the speakers’ presentation, there will be a question-and-answer session. Instructions]. [Operator like Eichmann. call now speaker to turn Matt today, to would over the your I ahead. go Please

Matt Eichmann

Thanks regarding encourage accordance information consider queue. a issues one call. questions Regulation the individual will and Please Vice to questions Disclosure, Greif's quarter yourself to today's In and from Eichmann. lot, with non-public one Chief Amy, before of joined limit to an you at we President because fiscal material Greif's you turn Welcome I'm Pete prohibited Officer; call. XXXX with on we're the second basis. and to to Financial important Chief end Please earnings returning X. Larry Pete Officer. follow-up question ask Fair take discussing you Slide conference by This Executive Matt good is Watson, morning, Hilsheimer, everyone. Larry and

today's As discussed. plans, related and beliefs involving a will differ reminder, from statements events. could during make forward-looking expectations results materially future call, to we Actual those

Additionally, the Slide we GAAP found to the on certain be over and measures, presentation. can metrics directly financial in to presentation non-GAAP most of now reconciliations I comparable today's Pete And turn will X. appendix be referencing

Pete Watson

We really you, Matt, and your good morning, interest in Thank Greif. appreciate everyone.

safely customer excel And In quarter, that generated at common to at of growth packaging global Greif communities our team customers' to purpose sure materials world. our volume substrates. the make the global vision the to and and binds second to in our Greif in us goods want purpose, Our we industrial serve is perform global efforts. package these to key I around motivates best. our year-over-year most I And our protect and with strong for thank of essential the all service, needs colleagues combined

in demand also corrugated robust feeder experienced and improvement network and in business. demand tube our sheet We significant our cores

solid cost recover and is pricing challenging, disciplined to price the inflation curve. our financial of and are This contractual executing leverage. increases and reduce remains we us stay strategic results inflation focus deliver decisions ahead While helping

Our year, the by XXXX $XXX year, and at grew flow generating half second With into reintroducing we adjusted per visibility of than A anticipate earnings the repaid prior versus are $X.XX million the annual guidance midpoint. quarter adjusted $XX of improved free back million share of debt. cash we the more and Class fiscal

continue in ranks annual to fourth we which our priorities. meaningful survey, colleague decile recently Finally, make the against completed us progress strategic engagement all manufacturers. top We of our

year. XXth substrates our progress our ESG report, year-over-year basis volumes ask per drum prices we've our down day capabilities by steel selling of quarterly respectively, volumes vision. diverse strongest volumes to Europe, displayed and prior roughly the and versus rose rigid drum X% raw peak decisions. volumes FIBC in strategic on prior growth the now basis FIBCs XX% plastic prior day I'd Packaging strong with product the IBCs per throughout a in portfolio pass-through most steel demand due and drum our versus IBC drum quarter around delivered benefited and digits rigid large by business published where a sustainability and industrial results. Industrial drums rigid by we basis, across improved annual Global our Demand reflecting year, were FIBCs on single-digits, Slide day second day from global per X. conditions stated addition, a a rose all The record. nearly rose IBC up you per X% steel America, pricing day Product on on Global to made which features while and a were and drum, enhanced and material a basis. were IBCs, North and mid-single-digit was mix, year while XX%, were Average where arrangements mid-single In In rigid fiber global on volumes basis global increased solid per versus to most APAC, IBCs customer turn by service trends. steel and line

across continue our We to improvement see key many end markets. of

in higher negatively experienced example, GIP's comparison markets better and not improved customers of segment impact conditions coatings and offset partially we chemical materials. material We due related specialty and the negative average were products actions to EBITDA while auto little supply sales million GIP attributed million keep a and of were higher And this quarter by solid. Paint tailwind. profit demand For markets rebuilding and stronger year-over-year. chain to from second please rose for chain remains and incentive raw for purposes, but and sales, higher benefited $XX.X indication inventory. drove a ongoing gross And higher year-over-year. tight, majeure also impacted and $X accruals selling The million rose in by force which FX where volumes construction any versus mind segment end end start to also roughly year easier business versus see sequentially an the carried due lubricant sourcing sales prices supply steel volumes, And segment. petrol grew expense, mainly in higher strong SG&A Coast stronger and tube $X to still sales have the customer sequentially constraints, demand. in by underlying and and higher sales comparison. bulk basically remain rose second Q $XX day had to prior businesses to year fiscal improved on performance over from drum Gulf demand in mid-double-digits that from is to quarter market year core to And sales IBC were quarter flat. to Packaging U.S. May our Global volumes that back Paper QX, sourcing please prior in rigid and starting stronger third one strong the our I a by filling GIP's and you April, indication that second XXXX, ask prior of both sheet to by notably our the higher turn in due conditions very up. early May, boxboard published basis panic low million per X. prices. a the the are opportunistic corrugated roughly and GIP in pick quarter. business benefits. benefited containerboard buying and adjusted Slide volumes due

grades CPG headwind. transport expenses due announced year SG&A $XX a year-over-year, demand non-RISI million contracts we recovered and will the accruals. million Packaging due with price included significant remained effect benefit million purposes, by sales Paper to to on million attributed the March, to type year, business. For higher increases the quarter increased strong demand quarter quarter. and $XX in from to recycled incentive adjusted primarily second Similar immediate primarily fully for our fiscal divested of robust. set EBITDA comparison $XX inflation. also roughly In converting boxboard in operations customer this third fell the cost increases And in prior prior all versus cost we response $XX.X a fiber new and of X, of implemented have to

than of litho sales, bulk durables, year versus were up packaging feeder X% the Volumes prior tube through quarter per the quarter. Specialty up auto Second the very strong. XX% for supply e-commerce sheet XX% and were accelerated as were and growth, more in and corrugated coatings, demand and system, our CorrChoice, the prior the beverage chain prior core day second food volumes year up quarter our remained versus laminate year. which quarter nearly includes business roughly versus

sustainability CorrChoice our up a tubes both for per demand double-digit and In our Packaging's market volumes addition to In outlining quarter help second assessment, published the achievements strategy. well the picked sequentially single-digit increase on In prior highlight Slide day in to I'd in from year ongoing continued I'd growth shape our reflects you this to to latest this materiality basis off double-digits our in core construction were now and demand start. strong XXXX segments, priorities. reflect embedded and textiles take made in into our we is also April, and X. that our like ask moment April. ESG efforts business. as a turn to versus to film Paper report and ESG a as up year-over-year to outcomes May, third quarter strong the business are end future we fiscal which flat a our versus to

gas improve We projects also greenhouse announced circularity. new advance to reduction recently target a our and continue product to

turn Larry now remainder to progress global over I familiar all we an the Greif's Officer, throughout enhance and our XXXX of Financial strategy. managers like engagement our I'd inclusive with our website more culture. already Finally, to to our visit to of you review to strong encourage further Chief leadership to all deploying sustainability become program Hilsheimer. are it

Larry Hilsheimer

Good Pete. Please everyone. morning, X to turn Slide performance. review Thank quarterly to financial you, our

excluding exchange, net impact due quarter the segments. sales, year foreign in versus primary XX% volumes our prices higher to and Second X selling stronger prior rose of business by

quarter X% year quarter. roughly prior versus fell the Second EBITDA adjusted by

to in dragged were demand to stay cost inflation in profits. of sales order higher, response transportation While we and increases implementing ahead In are product inflation, maintain profitability. especially strong on appropriate to OCC, and GIP, price in

an across we anticipated half second swung our the to versus expense on working $XX this substantially to respond roughly poor to million This $XX seek as year accruals company. last accrual rose to our appropriate of price increase year, and incentive results QX Packaging year robust second decrease quarter Paper increases being year-over-year diligently forecasted a as half, return which, prior We the roughly due implementing a due is over due budget. SG&A are profitability. to an million demand and in we has higher strong to segment change by accrual

second roughly and rate from settlements $X and expirations. audit benefit million onetime Our due of to XX%, tax reserve was adjustments provision quarter reflecting return statute releases non-GAAP to a

quarter earnings roughly per share. Second XX% rose adjusted $X.XX A by to per share Class

XXX million higher adjusted partially XX% capital capital Slide expenditures. the to year-over-year versus sales modeling free X improved to cash year, management, rose capital to slightly turn assumptions. Trailing review flow by XX-month working by and average Please to over due to improved working and primarily just as percentage prior $XXX offset key of profitability by our points a XX%. outlook nearly basis Finally,

impact, we more The transformation XXXX given earnings annual doubled and tangible confidence guidance suboptimal our negative meaningful [plants] than without share XX divestiture the visibility despite COVID-XX's business’ our With since that remainder earnestly XXXX we or and per improving of any in our reinduced better fundamentals. anticipated fiscal into and share results, 'XX produced fiscal non-core have has year commenced the than continued change. closure of and/or will late repurchase benefit. in have more We

range between to inflation. XXX,XXX currently XXXX. price we $XXX $XXX outstanding with working free flow now $XXX the shares versus million to forecast spent to adjusted and CapEx. fact, our a more inclusive of million million 'XX we on our We substantial have between million, In cash fiscal cash And use increases year offset $XXX cost announced of expect be to capital commensurate this end

$XXX will and ton half. our Finally, we for this $XXX a OCC year assume ton fiscal during that per average second

We Please turn to $XXX expense rate and expect full fiscal interest tax $XX XX% range to be Slide million non-GAAP X. million to XX%. to year between XXXX our and

consistent a cash sheet. focused X-pronged reinvesting returning in strategy have and the delevering capital shareholders the to We on balance business, deployment

in During roughly million million the and quarter, in dividends debt. we $XXX repaid $XX paid

was April toward our range of XXXX, and ratio leverage compliance Our to drive to we of Xx continue targeted XX, as X.Xx. X.Xx

until not engage we're will in any we reminder, back M&A within that material a range. As

turn continue to pay eventually before enterprise policy. steadily benefit down value increasing Finally, we dividend reduce With to to our shift comments cash, to back of leverage, Pete closing the will the Q&A. and as and move I'll for a his equityholders debt call that, our we generate

Pete Watson

solid And Okay. delivered within Thank to Slide levers control. strong our across Greif operating business Larry. pleased performance. quarter, and the wrap And to are with all focused everybody turn a and it please on I'm progress priorities making second I'd you, of XX. our We're up, our to ask really strategic

Amy, us positions Our differentiated value sharp extensive execution appreciate line free I creation generate needs significant to on our benefit portfolio, feel open the the capabilities with the uniquely and And questions. Greif. focus of serve our really to shareholders. customers our in of global service operational your for please for interest

Operator

Instructions]. [Operator

Staphos of line question of comes America with the Your Securities. Bank first George from

George Staphos

So my related. X and questions, they're

X confidence to fourth been the implied and half, and some for this second look into for you achievable assumptions at The related And quarter headwind Yet, be my published has headwind we the today customer given you you. -- price URB, you boomer what with you're an So can that what earnings. you've going give things with a May they now you is gives puts -- at or talk X major guidance order an what is What large the inflation? the guidance? existing certainly, are on looking phrasing, you inflation third is have question, the even on built price? manageable, here specifically that to pretty in paying pricing right that that if versus guidance you,

Larry Hilsheimer

comment probably add Pete I'll and to will as this, some of on it well.

years other our very degree Global as on but have very say, our we've Industrial have, contracts, high ahead with our items. for we talking couple now. team inflation of pricing working diligent I'd inflation, openers been particularly also about for in We where The more confidence been a control price has adjustment to pattern mechanism a direct of on stay Products our of business, of

we good to gross to the our margins confident out quarter, as and profit that so the fourth things dollars, maintain in have in and see slightly that quarter. visibility are going will playing into our third we're And fact pretty grow we maintain that,

the our levels. volumes in grew at first exceptional month third Our quarter of

slowing on staying not we're economy that ahead of the bullish we're anything seeing on so We're the And inflation. bullish down. and

these In as deliveries paper of XX% In our increases. in business have index. his time, in remarks, respect URB TAM our of because mechanisms, inventory business, not fact, against the business, increases have we With business. that price type value-add price in of dollar through to the significantly the actually the executed tied just has RISI of helped our timing Pete our inflationary every to is we non-indexed adjustment commented announced the

of every $XXX don't the market. have in dollar Pete, So you if we other announced since any I October, getting comments? last we're and had it know,

Pete Watson

Yes.

expect strong second So standpoint, Larry really we strong of said, a the with QX. seen half again, end George, volumes what have we've volume consistent a as from -- to in

Larry's give so plus to weeks pricing, of just are point, our to on URB, terms grade. X this In backlogs you perspective, in

allocation. Our on are customers

customers robust That's customers We have And to a at any new full how no both capacity to all And our ton any we that's indicated, as noncontract is. were price. $XXX take a very on market. challenged up it price. really

into year what price indexes guidance realized today. we've is in Our our full the guidance

we're anyway. price going it doesn't So forecast which on any to not potential future changes, comment

Operator

Wells Your Gabe line from the Gates. next Fargo question of comes with Hajde

Gabe Hajde

a at I and deurbanization. about for plus. just Listen, million I was was million starts housing kind And like some different it that high-level at at of for looking -- research I if said, and be housing guess, X.X there, X.XX more looking question, that X-year of out around talking average look for maybe to projections I starts, potential

past know like you over the carpet, businesses, And So I if exposure they has in like highest different benefit sort maybe what in couple maybe stuff was cetera, GIP of the where of coatings, don't said, you? line ultimately medium-term more been drag? if it's just directionally, end et benefit some you have to business you But like provide? for sight difficult because X could hoping of and/or remind kind to us looked and whether your where up. business of may great it's and cores then be, construction that's as what of, paints potentially that? these that tangentially, your years? could And tubes can And a a I and

Pete Watson

for No. question, Thanks the Gabe.

weaker. and as some into in are homebuilding part house. and home weak and that know, the you that key Paper end volumes. and goods, will cetera. were that products recover the the said tube starting in a and markets core of with business, Those are had tube you So markets growth et the to end of Packaging core was -- And carpet XXXX, our we go That

in our So cores that's were year-over-year part the -- of up tubes quarter. and why we're almost X%

Our packaging -- in you and the know, raw business, mills, our suppliers. paper as material restaurant our CorrChoice

does that flexible into GIP for provide of but mills products help we into chemicals that furniture, or that CorrChoice components into go new it's buildings. business, many side, that So markets the rigid materials are when in end to all operation that are more our align furnishings, it for those produce, our and homes look indirectly the And our On go foam. difficult either go those home. that and at chemicals you foam laminates,

of one So has end part has and been it our segment improved help the to business. continue certainly market that will

Larry Hilsheimer

what's only we us I'll supplement and they talked on long little for going, of but you're what not know a of if are we've that to we we about now. Pete year that are the where what economy, 'XX in where where interesting be could that 'XX, volumes all call things recover What's right that even had view Pete shy still to thought significantly said, Gabe, our well interesting the robust, about to because in economy And remainder back auto segment their the we'd bit going and would but by a in semiconductors. we an of what's had they below same I our construction, before, this the in still talked last that's levels. that projected that be maybe our thought And and year belief. is be 'XX that

believe get of And construction, done? us. in their now lot labor? front they more we get can of that, 'XX has a So they positive And depends like work even can on,

Gabre Hajde

Right.

there’s showing sure million million that's in from I adjust year on a and year. drop-through second and know from FX, And the did swing, even $X heard it And recur last comp, directionally XXX% a that this want not raw the like make not looks $X effectively then that volumes, GIP for materials I I I just then There's in case. if the correctly. quarter. guess Okay. I million in $XX benefit think, in dialing incentive everything to I

I'm from can So know guys cost if for us parse curious you have benefit there's improvement out. if year-over-year? the was of better lot utilization? sort just out I you of a what Or any taken

So go volume understand you forward, what benefit I or to guess, really the that the drop-through trying is what structural what have made? guys should improvements to trying of I'm understand versus cost is kind from normal we're be

Pete Watson

we've And one it been about mean about Gabe, you've that is drivers up what big the pass-through drive of that improvement be costs. to the -- and I in tightening in we when used our unacceptable improvement past few having the mechanisms the of dramatic drives really GIP made of the Yes. the a are in the expansion really time quarters, margin years. over raw talked us improvement mechanics seeing you material in that rapidly increasing an prior of lag, period in

bit margin really management, we the of cost while good job improving relative our a margin good expansion, of expansion pricing So a done processes. is to this have

And annual the some the of openers is that non-raws. for --

that sure making is in it contract renewals. of Some

on the of We relatively last been inflationary have we TAMs. cost very a mechanics this. of has an pricing facing of were period. aggressive knew been the component And minor the actually into we part The is element because improvement the manufacturing then

it's are So X really volume and margin expansion, components. the

Larry Hilsheimer

And markets, particularly we're investments strategic IBC from in had in investments, our good the our demand on and healthy our Gabe, We and but plastic drums. end of seeing also volume. one reconditioning certainly capital really is it IBC volumes of the part market dividends

Houston, going additional Europe. X Central Shanghai, got are also molders we've into that So blow into

that as growth business our will strategic to continue well. resin-based this initiative So benefit in products

Operator

comes of Markets. question Mark the line from Wilde BMO with next Your Capital

Mark Wilde

what a second in of wanted It's of bit out, about you profit. Larry. a improvement level. just lot should little expect big here kind quarter. And really XX% year? gross SG&A also a I the us Can in it offset I it's the above half in start the of back talk the jump with from mean, we to

of So something of I'm type back figure should out to of year? just the level through the trying expect we that whether is kind half

Larry Hilsheimer

focus Mark. of out on SG&A fair how we do a drive And costs continue we It's to the Yes. business. question,

ours, that the do fact took And was we to SG&A continue and than work we that. some we that of with when has on higher acquired over to the Caraustar that

having to been delayed to pushed that's SG&A X adjustment on the and back impact the that out implementations, COVID impact performance get our targets, on some target The on over our we're implementing the of we a case unless has just our of because various system. Unfortunately, that's far our Some play exceeding just -- year-over-year, time is mentioned about which X us months levels and will incentive is play ERP that this costs. to year. on back

entertainment, and what for So be share specifically, anticipate if I drag end that was of of the year, a the of relative to travel year, half it to of start we part about year last even per the year. the would back relative year, the remainder the see relative SG&A that do though, in we to first and particularly first but expense to this this is will look because and to $X.XX of more

of But not of lift share. expenses is crazy to so the about things it $X.XX That is year just of you to than of first second just versus you've it share pre-pandemic. second that might $X.XX half, half offset the We're is first for $X.XX year you, benefit, the EPS. was a higher we're to first the well a stuff Operations, half half be about increases a OCC on I year. lower a expense half. impact, OCC $X.XX. the the of for a finish of -- higher out walk to that's half incentive if $X.XX the versus at the going year if operations the earned of offsetting there's second to first year the it's Now miscellaneous as half the whole, of NCI stuff. look half tax about be was in SG&A in year over and Hopefully, the and earnings, significantly remainder be is the in expense, higher $X.XX a the interest other got manage $X.XX the to any the $X.XX because of responsive. going gets higher of Then I second And walk, $X.XX lower of a as half impact of I in in excluding OCC this additional the year. $X.XX the of share that there higher and going going that than the second go then

Mark Wilde

And George's then I'd a of just as pricing. follow-on. kind back go like question around on to

in on seems that talked it get about quarter converted prices if benefit then the curious, on Paper at have markets, business fact You it, I'm the to kind of confirm like in price is that fully third could if limited you sort of open also you URB that been -- passed-through. second improvement approximate of go overall, had segment to I number get these what products. And just uncoated actually non-indexed we like into be so just pricing think hike. as the quarter-to-quarter about quarter? containerboard the must look we that. would As I'd And second also the I'd moving like from had sense some where the

market prices. converted kind products? prices? what's roll-through tube of you've of a what's to raised happened of open But kind cadencing for So and And sort in core URB

Pete Watson

Yes.

So containerboard, let about Mark. first me talk

of As the system end benefit to the through our quarter. started month you last know, the that second of flow at our mill

on have ton a capture So we'll that in increase. $XX full QX

market. very strong a So Downstream we've corrugated, on been got full it's capture that. and

benefit quickly containerboard very that after increases. We got have the actually of

been containerboard costs, will by implementation. et higher cetera. have converting has full that our fully, adhesives, and That a our captured offset system uncoated. higher in OCC standpoint, some from chemical But and So we've pricing QX corrugated plus and on

we $XX. look announced as challenge performance core, pricing only The it's tube been noncontract The chemicals our converting are is immediate all We've our and we high $XXX price really, similar on OCC overall, tube with the full very ton we and core and to has Downstream it, is raised very to implementation. And levels. you at ton. CorrChoice both if the strong. capturing an where prices with aggressive mill index the said, very So our core a and we've been corrugated It's business. up our that squeeze had business, we and fully recognized price. a we business tube and $XXX effect. have performed PPS and price/cost in system, And at catching and big very on have

QX we announced that realization CRB, We On start recently that have downstream don't coated is of $XX price. So you'll and QX most effective on seeing capability. in X. July

index And the the up. implemented are be only the customers $XX has $XXX So that X. again, July non-contractual $XX. index in The recognized all are will to and related

looking hope for. So that I covers what you're

Operator

from Your next question comes Adam the KeyBanc. of line Josephson with

Adam Josephson

Larry, one on tax.

mentioned So if tax talking mid-XXXX, you long-term was were strategy, about Investor you tax your to improvement I your go targeted your Day XX. and back significant in a in adjusted range rate to XX

down be low this you're to to XX. year, guidance end going the of you hit your If

what low mentioned planning. X strikes exceptionally in adjusted as rate, making tax an you compared years ago when your the me thinking it all improvements you had even tax were So were to you

of past from you've each So X rate year. consistently can you years, just help -- and start the the outperformed guidance your tax I over think

So undershooting way? expectation? anomalous understand what's rate this what your your going on just there And Is the long-term you've because in any tax? tax us is mark been help on meaningfully

Larry Hilsheimer

Yes.

think provided which that I tax was But we lowered lower the to it U.S. out, rate a but back range the of basis, you're tax the look in on our reform, pretty on laid that of but points the that 'XX, obviously did when an been then on that we actually, also what pre was time, where was we've now. benefit end is significantly. most annual at And -- that you range the conference right, if of few a we within the range.

And countries The lot that's is, a had other reserves some planning tax -- in up because a rate alluded point the do that were of that those I for are within on administration a tax on had impacting released and things to required just to point project reserves have those. our us to reserves in related were because which that go-forward what's also but I up we no to some set think those, that the tax element other minimum overall of if certain also of at things basis. nature this things, setting and of worked globally of as being on of statutes areas. work rate we've the through those an the lot that on in liability gotten taxes of longer that results the through in We've view on lot there's becomes U.S. going more settlements their around a they're in corporations, established. to But the gotten on -- favorable difficult limitations new exams and contingent the the a of what's we've world. at bumpiness And lot trying the into a taxes get -- U.S. causing

say So would X going would our some on it's what that range that no another difficult now our come expected be. for to other things point I you or that there structure right relative tell to expect tax the planning. over so tax tax me down if current would anticipate years of next that I because got rate X we've I to to in was the changes

or what on arrows executing do back going we're call. subject is just think on our I so very, quiver and We've referencing another is that again, strategies that X to done to we team happens very a of tax the X that and in got job 'XX good has reform. tax were fun that And the in

Adam Josephson

you year. working appreciate reason ask And that, I your is cash a I project with to working The quantify you trying Got that? help the you this year, us to drag. the flow, Larry. mentioned capital below significant about next substantial expect is capital is million. -- this going you can on your because midpoint just be a Can I'm obviously, drag you'll of this normal CapEx have $XXX to year year guidance it.

commitment Next year, million. around your is $XXX

capital will understand Part capital, of trying components, about longer improvement. So $XXX and with maybe drag CapEx potentially knows no year. year? it working what working just to that next and of a implies this But presumably I'm specifically million who being happen EBITDA next the be versus year would

Larry Hilsheimer

cost, job difficult is something mentioned a that of When I OCC resin, not much And which talk at doing inventory the at is my primary about in of that or capital steel whether or obviously mean more steel by to or working at prices, we creates months, higher cost you poor managing the management. measure balances have driven control, higher by been all driven and higher over look translates sales, effectively into look comments as I X in and the sales working cost last because capital It's inventory. teams that's both on they've that's the our phenomenal the doubled Yes. it's drag. receivable what percentage all resin. then

of fact, a As strong. incredibly of matter our been management capital has working

It's it causing -- and that's 'XX if what [XX]. the drag that's of, levels, going a million, it, roughly drag. So I'm managed what's $XX at That say, to was you at pre-Caraustar. -- call look

control. I on yes, I running sorry equipment IT mean, I'm the which CapEx behind I things out Adam. -- our yes, us that, and going yes, -- our double CapEx go And spend thing and the frustrating of people impacted can't spend, the to producing mean able on reality piece of probably oh, to -- we're is CapEx, is going the ready, I willing but was on what's it's So -- to. get to deliveries. are for on

restrictions. We have question, travel not execute, mentioned, lot as ERP COVID I Mark's implementation because able in been response of to a to of

the the on that has side well. spending And IT so deferred as

be for to go done, future, but $XXX budgeted And million it we can we now Again, captive to next haven't less. the and million, our but -- into spend it would get that went with So would that be higher plan looking into million $XXX obviously, yet, we're plan range. at year of we in have $XX up things a we get to year in we what would like we delivered. because lots we're the

Operator

Panjabi Ghansham Your with question of next the from Baird. comes line

Matt Krueger

actually Krueger Ghansham. in for sitting Matt is This

pricing great. being meaningful the comparison I on that's on So year? could was would for Any half the help mean some the just between expected of the for year-over-year of given basis the all the then acceleration of layered year, EPS all given half the I obviously, that be back you hoping some of just, and the implied provide added quarters first, pieces weighting moving the a issues in? back X detail the remaining there

Larry Hilsheimer

get in, mean, huge would a does would be that it I about when going can but not little assumption and divide essentially be a sort Sure. I and not it's X. to to it. harvest? just pattern of year you QX that it going stronger substantially tell quarters. I basically normal the QX that on better, this, and X mean EPS is or this less we that's little every say a to to they be our into than there's would skew X difference from between a by X our season not you I what's going goes lot And mean to the that that it's our QX. ag of a X.XX take bit you it differential -- I different. And are QX,

Matt Krueger

That's was I volume Industrial hoping Anything the can well could detail as more great? provide from helpful. be on get Yuri impact was estimated what would then margin storm And then Global impact on the Great. winter also we a business? Packaging some you perspective? just that And any from really

Larry Hilsheimer

-- shut them, days just a Yes. It's We from impacted about so that, we down its few X X on take it days plants. looking and had of -- -- in production where about at of number days production XX not across was sales. or

we don't -- broken substantially increased freezing kind was then or costs that have million we So utility from because had impact. was about million from the it after another $X $XXX,XXX. they so We a of down some storm those a and had pipes it things and perspective, it $XXX,XXX, $X.X there, was another volume installation

got of And cost. million actual you about so $X.X

than now less for mentioned, of there actions things, into they cause starting customers of of are into We our going know of forward impacted the a that volumes majeure with for volume optimism there's That We as because Gulf things. out did very indirect some the figure impacted really sign start being to try of in us. that. not gives Now and by and do up the significantly stuff 'XX, our up, you areas to Coast going that business we're pick filling down to us that other Pete and world. good businesses ended regions' just lot our all force -- we're couldn't orders see levels a that's get

forward. But So was $X.X we're about pretty million. going it bullish

Operator

question from of next Justin Gabelli. the Your comes line with Bergner

Justin Bergner

Packaging business question unable picture of a Big parts picture, your big of couple sort Industrial are One outside incremental URB, then and other or where just to of of Paper Packaging, meet you're in demand? specific cleanups. there

Pete Watson

Supply are tight. chains

robust. really is demand Our

business We of are about because that meeting we Justin, other But do business demand with comment, the new actually have we that because like our in would business our parts customers. anybody is don't really My so for do for can't backlog our reliability. that's that to was just grown our of substrate, we with we great. demand

X- lot little more is and a of forced lot has overtime a X-day that a Now weeks, and severe. URB work but of

demand paper, to and converting a spite business to It's and our our service that customer we're inroads their We reliability. are needs because and related scores that GIP in we're job making of ensuring doing environment. meeting improve, our actually all our In customers of in serving business. actually good a some tough continue

Justin Bergner

questions. Okay. Then moving to the specific

clarify, then accrual half. year-on-year? and that incremental the a million Is or headwind, that smaller there'll first to in the half was second incremental in the to all effect incremental $XX be incentive QX, Just

Larry Hilsheimer

the or incentives So for the And year, last this accrual the had a of -- relative increased to we for that was XX QX. XX.X what so was was million incentives. budgeted. year, -- had year-over-year last And decreased million accrual a combination we a we -- we

that So million was first. in XX the that --

half same. $XX.X second million incentives. entire remainder we're at about about million, is on Again, year-over-year for a The is of the planning $XX.X currently what it’s higher the about. the year It's

Justin Bergner

then Okay. rate. just the And lastly, tax on

few the You come tax down not hundred a come points might mentioned the XX XXX XX basis that's points, XX, points the a it down tax XX. more but it's correct? to to rate So had down the from XX, XXX of be that because XX bill, might -- from reform to the basis basis than initially that's which from

Just to clarify?

Larry Hilsheimer

where talking we forward. to No, guiding yes, yes. be now at Oh, where about we're think and we'll I'm from no, we're going where

Operator

[Operator Instructions].

Capital with Wilde comes Your from BMO next question Markets. the of line Mark

Mark Wilde

Yes.

sort tax price thinking follow-ups gross exceptional. just of you on sales. was to the where that the the quickly. talk down us scale The just we Can few ever a the real Just issue? about how in here that land about how One, a business of portfolio with leakage And the in get if you're absolutely an looks? balance point business is land

Larry Hilsheimer

Yes. Sure, Mark.

portfolio. talked first. we raining hard And don't I liquidate It the always We had us like was say have pretty -- strategic answer interest First and unique on mean that think for talked our to of any all, that just rainy about more it last business. we I'll way. rate, year. view obviously helps it days, we about your and land We second I'll our some I circumstances. intention optionality. We of question any

factor that other capital it. from on other execute been to And So had offset of drove that been to that that a deferred relative were decade tax we that gains available recognized we we to us goes decided some utilize some the transactions we for to planning timber had ago, transactions. because had doing losses that that on timber to also gains

bankers to that were to anything any as we said, loss which carryforwards news. tax. as tax into tax thought was being because, that ended But and leakage, eliminate state other to And some gain got told to us available The we basically you thought up outside us good more executed played local is on. they utilize than that able they per -- get, the small we we values so what and could had we obviously it We were taxes, minimal. had was had federal that it. We acre

Mark Wilde

Okay.

share of approximate I miles. of the And sort Another of in a probably [Poste] player was the can was in and bought market, that ago. perhaps when for you kind business? guide #X sense market the the of just, It size sort you about IBC and had remember follow-on years kind I XX give of is dominant more us Pete.

strategy I of expand up some think so footprint try your to share. and was kind to And pick their geographic

is give you now? wondered And how I market growing if you'd overall competition? that just could how business right of is see now? that vis-a-vis And right us of rapidly where big the a yourselves finally, So sense sort

Pete Watson

Yes, Mark.

X. or We're capital and companies, We have reconditioning. blow We've strategic world. the IBCs so in got the we've the global now Mauser. about made we're X high-single-digits. high-growth capital product stated that's in IBC And a process SCHUTZ that's That molders We've a and adding around -- is of area. XX market that, mid to held share behind IBC growing So line privately XX% investments. a business third

venture joint with last end-of-life it's fastest-growing really what's years, circularity product partnerships the or really And basis a on that line I think service. create for IBC. the our re-conditioners X too, So creates And play we've to a global in product strategic is a in either portfolio. important, done compelling really partnerships

part. in really our footprint right now, important biggest a is it's And Europe. So

We adding a line American footprint. I into now our we're as North And said, China. Asia are and second growing

this steel drums, -- at of resin-based now our if XX%. over So little strategy, a are And to mix products also and was GIP to prior from in -- over product that's our moved you look XX% XX%. portfolio, a where product

mix So drums resin-based less little of transfer and into you'll IBCs, switch plastic portfolio continue and to terms bit steel on drums. see that more in a products,

Mark Wilde

maybe customers some those basis shut got of more of is those experiencing mills? one we're wonder the one you've X in tightness business. like of curious, that can business having multiplies boxboard I'm slip to whether curve? the URB just Graphic the mills. whether what the to and move And seems remaining Mobile. business, down kind you they I'm kind URB I whether coated weights. that convert Kalamazoo, machines outcome And talk of the might doing But at CRB just technological about being to is, assuming briefly with Okay. and could Fourdrinier seeing do you're mills, and more, of improvements in the that then of offer CRB if And thing at kind It risk I behind Pete. that I One wanted is more of performance X in

to get technological So standpoint your from potential just thoughts just conversion and stand there? around a you where

Pete Watson

Yes.

economic it tons. On that a downtime that a side, needed mill Mobile, when we machines the the was mills mill. it URB QX and closed of we combination had cost That in -- always of back ever mill, high XXX,XXX in 'XX, X And it in capital. a was pretty really was amount 'XX significant

benefit, close we CRB, it. URB now. to run our system. more do the it we of that plants obviously, The that in decided So buying was rest to and have We created capability CRB of both our and one do the in

in the So could we're products that URB more to say do. there's what going I'm machine run not that, that's going future. possibility a to

leaves X fairly one Coast. pure-play in one and operating machines, Midwest They're CRB So us consistently really now. West in with the the it

those We have nice niches in markets.

responsive. specifically of newer really our we with we say So I find They're wouldn't some But compete niches machines. high serviced. those

machines What comment anything future we to that, do right CRB. our X regarding that. will boxboard on valuing but that those think we're really in we I of So material are stay the we have don't system, but some now, evaluating

Operator

Securities. Bank with Staphos George of line the from comes question next Your of America

George Staphos

lead me. X of you sort cleanups times quick URB One, Two Pete, weeks. that mentioned I are for think

side? need wanted like? year similarly creating expect on that think being pushing your mentioned that you now ERP in going on terms places sort we finding you'd XXX business? things million or I you're spend to at got any backlog to add on earlier, could -- important of question what XXX And lack If there this times year then And containerboard Mark's Where maybe you terms $XX you year. of XX. of them for the plus to in and are recognizing I measure to lower lead is -- And on choice, be you is therefore, the we should can't of install right And there more in stress seeing in you wasn't you progresses you're CapEx, you that what relatedly, to as normal in affirm are are your correct it that so you really, are answering as bolted focus where 'XX you able this systems, we get year any like can do another incorrectly? your as what next just to XXX it if if that closer need

Pete Watson

at just of is to X George, X on to machine. And in Containerboard backlogs depending URB X weeks are weeks. kind

backlogs markets, robust So that they're really reflect those and

Larry Hilsheimer

some anything operations George, any CapEx, back-office system it's all. the in that's materially and in significantly But not On efficiency ERP of delay impact for not and to kind gains going at opportunities way It our Yes. delay that does material. operations the is negative thing.

where get operate. still get new The can't that. that, have other we've not like to build. just where us other new to plans been not, we're or allowing just element to We're or things we It's able on the lines we is working It's growth CapEx and the to in the things put impacting that improvements deliveries. going again, equipment to like paint

capital can you up year. capacity in will a resulting just end get in it because year? get As done Probably extra given next to human of spend whether you a not into what

that and yet about process in be finished December but back guidance we'll call. that So our but haven't in we to we'll that I go budget could would next into for change, XXX, talk expect, our as XXX year, we for

Operator

Adam the with of question Your comes line KeyBanc. final Josephson from

Adam Josephson

Just a X-part one, Larry.

talk quarter? which about X point terms guidance question uncertainty? tax, non-operational, why the the FX year? And relative on I do the you the was, macro fiscal that at better at reinstituting beat because preannounce how of because I you on in year effectively And are what left was based the given outset much in had So the that the guidance there's -- year of because does initial other and quarter fiscal might given is to visibility, guess, both of of your guidance next when relate this have only visibility less just you or that better to months in

Larry Hilsheimer

to. has it your out the the On have economy question, that Pete first months fact, the it's -- I more we in reaffirming. going Adam, thought fact was and like became just both, And only X plus played it left,

so And back give not did I to December. -- very guidance been year. why view reason of the plan old can't it. of we I've our our would the We remainder go to that's we operated to in any always we feel about imagine annual is Relative on confident preannounce, our practice. why

more XX% tell If there, than probably out people from ought know you've going you're some change to when that you you to going then it. already got to what

we to is, as you're yes, one as I our guidance that thing the on would So And why. right. use comment

adjustments. which in that other FX accrual it tax, analyze improvement can transport, costs, higher really you operating phenomenal take this and about If this that but cost say account to into incentive was doesn't in performance overtime and GIP, overcame

right where about bullish now. pretty are things we're So

Operator

This concludes I to over will turn session. back and question Matt call now our remarks. for closing the

Matt Eichmann

And very week much you remainder us, ahead. today. hope pleasant for of have everyone, and Thanks a great joining we Thank you. week a your

Operator

behalf for of concludes Greif, call. thank conference On This participating. you today's we

disconnect. now may You