GEF Greif

Matt Eichmann Investor Relations
Pete Watson President and Chief Executive Officer
Larry Hilsheimer Chief Financial Officer
Ole Rosgaard Chief Operating Officer
Ghansham Panjabi Baird
George Staphos Bank of America Securities
Mark Wilde BMO Capital Markets
Adam Josephson KeyBanc Capital Markets
Gabe Hajde Wells Fargo
Call transcript
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Good day and thank you for standing by. Welcome to the Greif Fiscal Third Quarter 2021 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers’ presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today's conference is being recorded. now today, hand Matt would to conference I speaker your Eichmann. Instructions] like the to over [Operator Please go ahead.

Matt Eichmann

This I'm Thanks, Officer. Chief Whitney, President Greif's Fiscal Call. Chief Quarter to and Greif's Matt and good and Ole morning, XXXX everyone. Chief Executive Financial Earnings Larry Watson, Officer; by Operating Pete joined Welcome Officer; Third is Greif's Eichmann. Hilsheimer, Conference Greif's Rosgaard,

Slide issues call. you please nonpublic take will questions regarding consider We and ask before to accordance Disclosure, X. limit Regulation Fair information individual one end we're today's at because returning question Please with the In of material questions to to prohibited on you important discussing Please one queue. yourself follow-up basis. the from an with turn

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

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

Pete Watson

positive year. adjusted the the Thanks, robust hope X. strategic also and you free the volumes executed and for your Class reflecting ongoing Matt, your respectively, are strong fueled We of everyone. pricing million adjusted as earnings deliver EBITDA healthy October families and of share both the third delivered A record that quarterly quarter staying remainder to fiscal safe results results. strong by pandemic. $XXX year-to-date guidance, and adjusted discipline flow Greif per in increasing Greif Class We're and and dividend, and during our morning, earnings adjusted of interest we actions good $X.XX, and outlook appreciate payable cash on We per quarterly our share and B

Rosgaard is service planned retirement commitment disciplined him Those we for take with our this I'd and his and will makes closely and servant Finally, February serve Greif extensive a X, announced in that Officer. Chief to Officer Ole executive operational as with my Chief customer Executive attributes, ask to to you a that Upon Ole a industrial a will proven leader XXXX, on packaging team demonstrated occur Ole, excellence along builder leader Operating few Greif's execution. team Until next the next transition. Ole and with and words. leadership executive forward. year. like transition on June, assume to manufacturing say ideal experience, me leadership late time, will work responsibility

Ole Rosgaard

Thanks, Pete, and good day, you. everyone. It's with great to be

closely be you Ole more CEO. Pete joining these all As in I'm as ahead and I mentioned, and calls name quarters in next to my humbled excited work look to future. the forward named and the is to Rosgaard, in of Greif's with

Head As operating Global that and my results of on expect. Packaging, our the delivering and and Industrial shareholders focus customers driving was business

plan said, the I'll and with the focus continues With over working leadership team business our fiscal the to Slide wider on across presentation portfolio. on executive COO, approaches I'm Pete that, that as And As X. back closely Pete turn XXXX Greif the for future.

Pete Watson

business Slide On third Packaging results. Ole. you, Industrial delivered outstanding Global quarter Thank X,

X% Our per volumes steel drum by global increased day.

Our per XX% volumes global and more rigid day. IBCs than drum by plastic rose both large

demand filling in volumes versus saw accelerating quarter, APAC. prior also We mid-teens our with specifically the year improvement in

low America, actions. improved better the teens thanks or prices quarter conditions. volumes In a rose to industrial benefited substrates day and drum by a North XX% basis trends Latin all growth selling to year, versus from and were substrates improving up which strategic agricultural third pricing In per EMEA, material most and volume due key raw versus citrus our average diverse product quarter key our all features pass-through In on Third mix, season. arrangements global of across year steel year-over-year industrial and inventory. the COVID-XX-related Asia continue prior generally region. America, see strong softer and indications prior monitor conditions challenge and markets. end GIP, And is tight, with day and X% this remain Demand our little most strong but per customers versus we respectively, team X% by Supply lockdowns XX% Across managing steel parts across APAC, by drum in improvement drum in across IBC roughly day, increased a very Southeast the solid of of per due prior finally, we rigid steel rose volumes key to in China, that to was rebuilding little volumes chain that year. well. recorded

and present certainly recur. These for not we which business a in expense, benefited but not S. volume enterprise paints did partially million chemicals results markets are EMEA. our is incentive some parts challenges quarter material to million solid the and GIP's due disruptions operating has any recall versus also of volumes million benefit in higher negatively and also profit the Southern coatings GIP's We Volume average to experienced was operational becoming by QX key regions. stronger specialty especially tailwind. customers weakened level, of not a roughly significant to higher segment impacted conical most year tax but performance more and have in XXXX in GIP's prices which our for EBITDA and opportunistic mainly have, was food higher both attributable on decisions material this demand demand selling of in pricing GIP's for strengthened, result sourcing included lubricants $XX by productivity and chemicals a resulted The accruals. Labor FX of demand And volume our rose higher portfolio. million $X at reflected shortage, nonetheless. Brazil availability healthy. SG&A U. our demand and $X not Paper double-digit year-over-year While demand end record prior global and Greif third adjusted challenging, and impacted Packaging. a an Europe. gross from is experienced $X the sales, and both and plants are part year-over-year. paste certain that an Please margin impacted that GIP raw that in in has unique quarter, of sales some largely recovery

ahead, those to week. GIP with by prayers is also in also off thoughts quarter Looking Hurricane trend and to to fourth that August volumes Ida were a comparable like earlier solid our are impacted are I'd prayers with that our also this with July. comment

While the to roughly $XXX stronger time EBITDA versus selling to $XX anticipate million Adjusted including expenses million you storm. we and prices. do rose to partially rose material due X. Packaging's SG&A not Paper year 'XX know, OCC higher accruals. incentive due prior transportation results the is higher what volumes we this our from fiscal to to and drag. primarily rose raw the in prices the by third higher ask $XX offset and at attributed please sales, dramatic, a versus boxboard due turn and fiscal damage increases containerboard prior headwinds, to published by year-over-year, by material and impact million to I'd year, from Ida sales roughly our extensive Slide quarter a

in a We five and containerboard. a Since cost we've including are on total June, robust demand ton on executing inflation. ton increases $XX early response ton of and announced CRB, increases, a actively a in $XXX on $XXX URB price to price total

in As of and increases a published CRB converting ton ton on indexes respectively. $XX the a increases, operations on our August, medium URB the $XX a very, recognized linerboard strong. on and $XX Demand the very remained $XX ton and a

were roughly and sheet quarter volumes Third quarter. XX% to are up through prior in fiscal system, versus the our CorrChoice, the stay fourth day per feeder corrugated strong anticipated year

up than includes and XX% versus coatings which bulk were sales, specialty more year. the triple-wall quarter Third packaging litho-laminate, prior

comments and by start Thanks the comparable to now year not were per over our a and core and up CFO, Paper off nearly tube our improved to August. quarter Hilsheimer. the core Packaging our solid strength Ida QX. textiles have I'd about end-market to are for anticipate impact it CorrChoice in Similar material Hurricane a day caused to do results in and QX. XX% we protective damage in GIP, Volumes mid-single to Larry packaging Third demand to to continued Paper accelerated business to digits by segment. actuals. is turn my volumes and July's and prior like film in tube versus versus Packaging

Larry Hilsheimer

Thank performance. financial Good Slide turn morning, to Big picture, Please outstanding quarter. quarterly you, an Pete. review everyone. X our was it to

the a also record. Third exchange, XX% a prior Adjusted year and and prices impact of quarter $XX record. million rose higher were EBITDA volumes to versus selling rose quarter due and by stronger was excluding net sales, the foreign

prior in headwinds the million repayment. million refund substantial our combined from year, lower result balances, tier prior and expense Keep rates taxes that a periods more As year $X a levied. Pete our result wrongly roughly that to revenue-based credit the were the more making our facility as mind, lower interest much mentioned, $X of impressive. overpayment lower our overcame of reduced million refund versus adjusted debt performance government by due Interest rate $XX occurred incentive than quarter interest EBITDA fell include tax to of debt and EBITDA versus SG&A. in prior OCC a results and That Brazilian on

to prior GAAP were non-GAAP quarter and flat rate both tax third were Our XX% and year.

more than doubled A $X.XX Third share. earnings quarter Class share to adjusted per per

fell flow roughly $XX versus million cash Finally, third prior by quarter year. adjusted the

to to results XXX a executing in Please significantly, That year-over-year While as modeling prior controlling use prices the discipline year working working is fourth assumptions. profitability due our cost of a by raw with basis superb and capital run-up X review turn what in was outlook sales quarter material to corresponding it substantial XX.X%. percentage Slide cash to our compared team increases. can points source key with improved trailing said, in capital a and to as improved the

results capital capital plan a consistent on cash we now increases and partially Pete increasing guide anticipate strategy $X.XX, doubled incur to offsetting share reduction fiscal midpoint, million to offset share flow, with with end Class Please of cash between higher than is flow our million than capital despite in we remainder due fiscal our or the is since As $XX At expenditures, that to noncore A our business versus guidance, divestiture XXXX. have plants since due and earnings To outstanding without mind in and We improved turn range. returns, expect and stronger the have fiscal any keep 'XX. volumes in the and slightly have repaid free earnings savings, Also for of X. the mentioned, and million lower to of employ free additional reinvestment, COVID-XX's are and more guide or share $XXX usage reflects in which currently per suboptimal price $XXX year-to-date by that earnings per XXXX. trajectory favorable million executed more relative working At of adjusted per QX will Slide of of now generating 'XX. XXXX inflation. offset total cost our to more more remainder announced bias midpoint, $X.XX our and/ the largely the by pricing OCC shares on strong we debt an This upside our negative de-levering repurchase we QX. for more -- improvement per a nearly share we to closure commensurate QX benefit. has than generating adjusted focused adjusted which debt the capital the adjusted $XXX three-pronged positive we to 'XX XXX,XXX deployment results, anticipate With headwinds aggressive XX impact, share flow anticipated

by a by period, compliance Our our year-end. improved full reaching end fiscal the time now we leverage nearly targeted the over ratio ratio and high leverage that anticipate of turn range

I'll confidence in practice back dividend cash in comments. and our closing improvement turn we strong step Board in of earnings his increase future With effective our calls. call the discussed towards increasing is This this year. the for X.X% generation, dramatic the approved Given steadily a quarterly leverage prior Pete that, a to dividend to our as first profile a

Pete Watson

to If Thanks, being continue Larry. discipline please X. best with Slide in outstanding as our turn Greif quarter customer to deliver for vision personally third strive thank our everyone towards we service. I the to could of to global want team executing

to from ahead, and trends key we positioned benefit are improving markets. well our ongoing Looking in end strength

for sharp questions. could value. if and best you And Our us line extensive execution the global customer operational serve portfolio, capability in service enable our differentiated needs open please focus Thank for generating while Whitney, your significant on you interest to Greif. shareholder


[Operator first is of Baird. Your Instructions] question from Panjabi Ghansham with line the

Ghansham Panjabi

insight you guess new Can Pete the wish in any Congrats, basically into at the and XXXX. the and just on leverage there give benefit us future. I'm more XQ was a operating Packaging Ole, segment? delivered the side mix you was whether that little quite bit reversed sort volumes, for I decline looking Industrial of you substantial. on which I best your roles. from

margin I what to I'm understand cost guess the extent with of expansion you extent So inflation trying the drove to experienced. the even

Pete Watson


about So I'll talk little prior the all end benchmark markets very standpoint, can But versus low and add. bit healthy. a year. little from some were our Ghansham, a and Larry comparisons bit volume But margin, a we had volume of

we business, decision but segment made lower that price in more we was Europe. I and food had to in food -- margin on relative the think, our only the solid that's Southern comments, volumes the opening end

we've all healthy. We with we are continue initiatives end see our business executing for done change discipline volumes about. good forward. substrates on that material and non-raw that strong. a in getting very Our pricing our of PAMs. pricing are much going very and markets on both to self-help materials our increases. really disciplined don't in raw to our The We've talked And actions, We're execute job that in

our XX% a very exceptional included lot have our done margins. a The job, actions and of variety through better self-help and of initiatives an executing contracts we're think drive well of I to teams operationally driving opener.

year. next other any thoughts? good really think we're there's into excited. We going Larry, So upside and pleased

Larry Hilsheimer

I making take really approach The well. inflation, other That things. the executed has into our of have Number way That's and the way we our execution it benefited maniacal more number the three built to us openers them Ghansham, is in period. we greatly costs. the the provided to contracts raw have to on period one. and offset four, increasing have that and a staying One, five ahead Yes. those over down cutting of costs. been of accelerating highly down efficient a teams years last two extremely PAMs annual lag material

of tailwinds away underperforming had of we was on up of operations. plants. about our so. where -- XX we've We've we've EBIT so really some well, mentioned is very getting low-margin we're that. $XXX third revenue on from focus to were low And nice I now rid X% walked from or And That previously million over -- business.

of to And all going mind can are those driven what's So where the margin in execute it we is. expect continue to forward.

Ghansham Panjabi

question, and a reason just rate Got mean this EPS have of EPS, pricing a for it. know it's any my at but a back spot. half a for the second good 'XX in should minimum be year's year I seem early, as And to we coming you for why baseline use fiscal lot seasonality? I of any through, adjusting run not volumes

case? So not the any be reason that would why

Pete Watson



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

George Staphos

quarter, what's fiscal again, transport can I cost to poll, in OCC, you inflation in third does we had quarter, the cost you million inflation -- start, of so Peter, pressure And another inflation the you cost heard how terms pricing. year-on-year, Congratulations, in the What on again. that I million mentioned was incurred assumptions input fourth can of fiscal OCC, talk $XX including your variable Ole if about quarter for you into if $XX like? then year-on-year costs? including and built OCC variable the of correctly. because the about look Then guess

Larry Hilsheimer

Yes, George.

was $XX inflationary So about $XX element OCC. over the QX of paper in QX the that business, million, million was

million price $X transport other to you I increases on account piece. higher $XX was just $XX manufacturing about the price material of that, just sorry, drag the have of -- another The million and substantial back on transport volumes, material raw in me currency was have So had volumes, year-over-year. the had Transport was into Pete? And million, number our higher We let we transport you additional related take et million actually and -- business. $XX cost inflationary million raw cetera. up another then when from I labor, volumes, temps on million chemicals, a I'm the have don't don't $XX adhesives, another other core of $XX paper increases. on around $XX of GIP and million. also Do manufacturing

Pete Watson

XX was It for five pieces. other

Larry Hilsheimer

now Yes, five is on it steel a and XX similar Xx to our ratio other sense, right George, a more give pieces a in expensive But you resin. ago year cold-rolled for total. -- was just than about and

George Staphos

I sorry, didn't Larry, So get quite that. I'm

actually GIP the was increases. said in million selling price You $XX

Larry Hilsheimer

broad was That increases. right. line. nominal wrong was I is the and that Yes, reading price

George Staphos

what us know Pete, talk fourth more question, to early then again, me, the seeing I fourth look Sorry. the comment but I'm rate what don't I the turn in excuse other inflation. at trends your you not specific fiscal metrically run like those mean you about cost a into great. guidance little pricing And million, your labor, detail give I is factors, fairly you and across you're got and you fiscal quarter, guess up, is take I could another color like, the would cost pressures, four? if incremental bit $XX but seems variable -- my I getting -- it terms a can that of and quarter quarter add but for if heard third volume be any I room fiscal conservative the I all maybe bit over. in it the businesses of building in at, of guidance I'll other there it seems

Pete Watson


seeing July. we're are trends very the on which month similar of what is -- we saw to volumes market first August, the what So in in in on four, our the

be will to markets, volume So trends strong. our end again, continue healthy

do remember, our to picking and were market off, QX, strong, the started demand fourth You from increases PPS in drop but for last not the and really as both be as GIP. substantial good so up volume the be quarter quarter year, our about equation have they COVID the pretty still our fourth we will feel in and they'll

Larry Hilsheimer

margin as And slightly QX material GIP expect will that QX was steel in data in do -- we don't costs because it going George, raw on the up our don't We our be than business have lower much. component. I anticipate clear in

catch -- pricing had so, steel healthy catch-up higher-cost into but still a And have increase, very have inventories, margins. some deal we coming did we've not we'll indexes where a our but


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

Mark Wilde

I see years want and what six performance. and such My you go just in kind over, you to really, much with Pete, tougher in I congratulations to kind it's you ago questions getting of on a is are to was us to Mike. help when out strong of say of the pricing. terms you Company nice bit if remember can took more left both a situation little can ready

sort I'm cores and roll-through of the of have. price on you just board corrugated tubes in the lag You and also initiatives products. curious talked terms of kind and about converted sheets

So just if issue. can that you about think us help

Pete Watson

to at deep talented I future and I've the team. have Greif. I Thanks at Greif, that great got very we're you, very, great got a very have to appreciate tell And bench And Mark. we've a belief going a high got we've And words. here kind

is what's in question $XX getting $XX as the And in October. impact your recognize said, we September medium, mill of full in by to we'll on So start liners. containerboard impact left with increases,

and product is see in $XX be through future. announced that September through ton $XX that in on full URB, will again, XX. two backlogs the And to recognized expect in be the October. start and a one We realized in the pieces, on one don't recognized. a it recognized we have So will URB $XX quarter. impact On and announced we On impact, is accelerating very been not left at is be change fully very, $XX we September as strong in demand point What's the for and CRB, fully increase $XX. and QX has this but any

calendar contracts Our recognition due to will XXXX that or business. impact be in

announced well. also a business expect XX recognized August ton conditions as have that a We be increase $XX for Again, to we CRB, fully are for strong. and

long, Our and backlogs on we're business. bullish the real are

Mark Wilde

my picked down you've one in investments southern got just a for in a question, Wisconsin there. the really ago. complex about few potential in Pete, very They second large Okay. years efficient They're the their business. I'm mean competitor curious rebuilding U.S. up machine URB I main

competitive base, So their they need incremental your in with make asset to as investments to do remain them system? improve you

Pete Watson


and to good stranded and very our And they largest a going make point. to for plan it mill efficient to investments. significant wider medium our don't have it combines converting in our we've some we're improve we're cost disadvantage competitor how our a machine. a you as got that. a has capability. So system converted and And you URB machine that taken URB done and know, both have see But a a system, going We in

we do more market to from and create advantage, and go service value high think what customers a touch customer is a standpoint our I for create that important and how differentiated and footprint into what's differentiation. grow the service But cost to come through improve structure to and more that ways we'll that that mill XXXX. system, business have we we are of at looking overall customer

Mark Wilde

possible I graphic remind if Is on slip us of the could to it the contract? just more. CRB And just sort of roll-off Okay. one

Pete Watson

us It sequentially into but Graphic, is different the rolling only -- 'XX. between we're through mills not starting that's year Mark, going and it, late specifically out because to into it's go three next


KeyBanc next line Adam Josephson Markets. Capital is with the Your question from of

Adam Josephson

quarter fourth and Ole, a all and best on question. and congratulations one full just of Larry, you. year on the GIP, to I've assumption, then both luck Pete your of

that XQ the is FX benefit. is benefit, business, versus lower profitability had normally seasonality and the XQ. that in you There Brazil two So typically

a I'm help in XQ? that me going the You full year-related ask price what that issue. the you profitability again business mentioned just are your Can then for And question. steel to with in expectations

Larry Hilsheimer

just of has rapidly, steel dramatically benefit of then But you a has future, recent of year get a that and in of midpoint. have mentioned. been current at accelerating things on elements to rate Brazil through profitability business we've breakdown let to a as although have that cold-rolled roughly element can now cost some won't possibility reasons that $X.XX this stuff don't tax $X.XX so improvement that you've lift. the again although there's walk will a bit, clearly we related We're something have got ranges we other share. increase impact a just some GIP, steel broadly in up anticipate the and lower have from I factors all line. and offset of guidance. and Adam, slight $X.XX to at And for of not you're prior year fourth the likely we midpoint inventory already talk spoke just the $X.XX. in as down what purchased to OCC. equity you the more curve got the a our changed flatten of But decreased. operational going there's we me are to you the that's what around about just volume have quarter $X.XX which lower for of, Interest is I you a guided further refund lift. There's expense previously of that's the of U.S., The the yes, had And The but started prices, roughly, increase in earnings cost cost by those. from $X.XX $X.XX catch-up, Tax is may a accelerate. the

to anticipate by dramatic that we the given economists projections of a see that some clearly fourth plays And that mentioned seasonality squeeze economic thing margin be in for which do quarter. us. impact problematic would in drop any And through the little only would the the be as you to that in bit really then squeeze of the margin. kind so the you'll We have most relative plays going current there's cost, don't inventory. steel be out a But

So a GIP profitability quarter your the assumption step in for correct down is in fourth a part. on

Adam Josephson

more. And just two

segment it, if EBITDA I full look the $XXX if call that say million, on it was year. in somewhere previous the being, one your million that four at per so So years, let's $XXX around look year, Larry, the up -- at ends I

improvement Is So to going XX% $XXX to baseline with? help that the year? mind for mean which go a is million, you'd $XXX next be from in Can -- basically million off your jump. that's the right you us I to of so are is the truly temporary right kind off next you baseline. dramatic that think not is that, Or perhaps and understand of trying commendable. factors right is that some I'm to such there if go just for the year? baseline

Larry Hilsheimer

Our job all have focus I business been on of doing virtually walked through might I was do out, team unprofitable Matt facilities -- improving We I quite profitable operational. by of an our it has pointed service closed, improved and business. margin we've said of outstanding customer more were said, But I XX XX think to that. want it's lot actually I away like from business. winning stated

you but what of numbers, specific into basics say, the accurate. cannot think I get no, are So I

there flattens, efforts some be But self-help continuing We degradation. will also cost have a we on. will, steel of lot the margin as going

going molders on We blow other CapEx that and to have additional a projects to few operations are improve. continue

So off answer question. it's line to baseline is the a bottom of good to your work

Adam Josephson

you containerboard, you it and have of just But -- if impact mind. if take similarly, of next impact this, price to you recognized just year? that that however recognized. been just URB, price answer the to words, answer the CRB, one them next want add packaging year, flatline you or the more, you don't the And paper would those but include assumed you been be Can limit be up, would haven't you've what XQ announced the all other what on your increases be? And in if revenue OCC in through

Larry Hilsheimer

line. that I $XXX played lift it's all at recognition with when we current and through go bottom Pete increases have on OCC of you and take the we price the million announced, if last the assumption that level, Yes, about of the


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

Gabe Hajde

And with Pete, you with look forward. going pleasure you. I working working to forward Ole,

Ole Rosgaard

it. Appreciate Gabe. Thanks,

Gabe Hajde

shake kind to instead I been was focusing is I A of pretty crisis, to play what global coming that million kind in if EBITDA, what think think go lot but role maybe $XXX financial I to of of consistent I have Adam numbers Even asked, out raw And questions on can the because to in materials in I out peaked back comment in pretty back out of be. a think, XXXX. just the kind on. around those dialing want big of come margins of

so taking point you at, than of business direct and that objectives. kind million of the us what that business of product have different away sort business from from a I'm business the And anything Appreciating, revs. account Is it's you in geographic into away walked standpoint given walked guys fiscal context you've or or that kind mix a the of there XXXX that can whether standpoint all makes to you financial in $XXX of obviously, structurally asking before? -- was it in from

Larry Hilsheimer

Pete, Gabe, then. I'd make some comments of it.

in we away the focus that that, a And consistently the we've from of walk structural on it's margin serve. relative big plastics about about end we after is markets talking all particularly change poor if And fact you business had. the bigger pretty big profile, the it, to we other building been IBCs. to think the on focused you our picture, business So we've been and

So back more chemical shifted you crisis that away companies heavily went where way dependent we're the post-financial of, time spoke you are on today. we than we have that to if --

I two would are big those structural so shifts for that And us Pete? mention.

Pete Watson

things, we lead and improved how business. three really we've that the overall structure Yes, how

improved more price much it's discipline. First,

year about this desk in price strong material PAMs coordinated in more analytics. lot We've the the also with nonmaterial a much increases. business centralized really more contracts and one improvements with all Rosgaard non-raw about talked shorter Tsai. we're -- Ole our importantly, pass-throughs we've under But to that leader So pricing

think, we're we what I So better technically, do. at

basis, view markets in of overall are the which our most better have We customers nature. global a of global on

more unhealthy of we've after and consistent business, growing our value have gone volume, walked to to and markets So Larry's we're more a away from which over I opportunities be much lot to we've strategy higher think profitable. goes point, that are over

what GIP in also XXXX, CSI can XX% they service a customer You had initiative. a score. look started has done we from at When

Now XX%. they're above

improved. So dramatically portfolio to customers a across our ability global has serve our

As the reconditioning growth IBCs, initiatives and Larry IBC resin-based said, plastic into products, drum. strategic are our

If five our at -- you years It's now products was revenue XX%. in think ago, and I XX%. steel remember, total over percentage our

some So business. And profitable tremendous the that IBCs and and initiatives in markets drums we've self-help that higher-growth important. talked -- and We've the that, our address. as at significant global a done Larry that low losing of to this we've we're growth as this about reduce closed cost really fixed to it's business We're said, shops We've changes structure, structural some cost SG&A had EBITDA. is third, as plastic and we've better money. consolidations running done rooftop our part

it's we really sustainable that, feel you really look that Ole confident a can trajectory and business. all that And of Rosgaard at has done when So of grow. changing job tremendous

with pleased potential So and have the that we future. in we're the real business

Gabe Hajde

other about you the the here, Slide is kind I investing on guys about And of dividend and talked that. obviously, you've mean, The X. capital in on you bumped one allocation. business talked

to Larry, that think and bit, sort you guess, prior us M&A, think what I in management standpoint things inorganic a your is how think the little a of way put incentivized? slide how of remind you you financial for deck with about M&A. you kind One from does coincide Can kind the of as filter framework I of about is the maybe, and or

Larry Hilsheimer

the Gabe. cash that we capital. should what we on machine Thanks, sure spend we committed we feed spending will needed Yes. meaning the have, to make maintenance remain Look, to capital will we

see automation components you'll labor the and given think things. doing more us more around of I

this priority highest close to focus at and fiscal making we leverage always save ratio down there we So is on have. we're expect sure our year. getting we that target. the But And to very debt obviously, where be continue end of and to will then we what grow

talked a early in focusing by of then we've previously next part middle on that about year, the and communicate wrapping So about what of capital recognize thing. up you we'll plan, to that strategic of situation we we're all and is excess are kind we our M&A that shortly. to of in very a of be to go-forward But lot look having that relative going really a of the also

our returning same our extent capital fit we'll risk various the which we have, return criteria, find that the to investment the that be that appetite, that more that don't ago given many so to meet we we we'll shareholders. don't our we chart opportunities And even to showed around And then years potential that extent the a criteria of to continue apply.

Pete Watson

comment to Pete. is want just I this one Gabe, on that. make

deleveraging I process think disciplined to it sheet. really balance capital want be job done allocation. we've I of our regardless debt just phenomenal So to we're leverage our ratio to in make But going is, what clear, of the a

that's stay our to going important. true to think priorities. our strategy I and We're

approach our process we value I to a have going we shareholders. So very about we're that good the again, for feel really best in. capital that And very, how allocate put disciplined for to create

Gabe Hajde

Right, response Caraustar the I around questions an acquisition there timing appreciate that, and gentlemen. I just and initial was obviously, such. -- to

So about I to as you think of just wanted refresh guys to it. how kind


[Operator a of is follow-up Staphos. next question the Instructions] line from Your George

George Staphos

also Company comparison market you of year, at tough a on Hi, particularly last but everybody. commented if wondering lot analysts your follow-on. are ourselves bit you for had the relative taking fiscal growth looking Larry, I trends today, volume now. you on the questions, And Because the 'XX. for I a you've the from be and have where was and you by to where [indiscernible] talk a markets the continue Thanks pandemic. a end 'XX to of could, should great is, included Pete, fiscal think call if hey, there obviously, for end little what could that this

So where come going from essentially? is growth the to

Larry Hilsheimer


George, think maybe me, to got I'll I'll yours I try tack I'll but that back markets to end if come but of And you and most your Pete then future. points, get addressed question in let seeing through pretty the growth it, try. first But don't part on I go on then I first broke your up you. the you to on what we are significantly

Pete Watson


So our comment let Paper me on Packaging segment. George, first

both serve widely corrugated have in models core, we tube our and materials. model direct integrated end And certainly box to a independent dispersed then and pretty raw So market segment. business

accelerated really supply really a So, that our tight chain model service environment. model customer has in

So packaging. taken I value And it's e-commerce we've proposition. enhanced packaging think paper with that our of our advantage strategic really in investments business, the

So to grown that years significantly we've segment where in two were ago. we compared

really see of the tube our markets. trend. core coming think think, some those big I And it And they're one and business pandemic, and I of forward. So well, tube end XX% that's damaged also very out markets We you as year-over-year. going in and good can and by really of our our core business August in see of growth trajectory strong our

we're George. on in strengths I'd to think the like So, end those GIP, if could, in ask I really segments' positioned there. to segments you end well Ole comment

Ole Rosgaard

Thanks, expect end Pete. we are we George, in particular, those the end moment And in oils see them remain coatings very and strong. so that strong, are serve and markets we and strong. foreseeable Lubricants, and markets strong the specialty paints at adhesives, the pulp future. to and chemicals

Pete Watson

to cleanliness, bigger disinfectant is post thing, one from and I think be of at trend, George, I as a a pandemic. going look think which factor you standpoint

produce, continue these growing of access we greater really some us those and so reconditioning, will markets. products chemicals to that and our positions And improve. it some to IBC of again, end IBCs And to well

Larry Hilsheimer

to I for 'XX, of, might it -- I this focusing growth. of, hey, great. at remain sort is we lot what be comparable think makes And same. your what to it a how things relative wonderful challenge and hey, on going a had George, of And the is We've be question least a heard

our to on service. customer We continue are going to focus leverage

are that to recovered And more leverage And the from have in we because those the away job believe, continue supplier and and share walked winning a we our customer PPS value-add gained we and a have, We a with done with supplier. customers attribute that are building of we'll teams we great GIP to some business, both business. we profitable relationships business market the We share. reliable that.

in we'll IBCs And that And at what we'll of that. then operation assets And continuing spring. growth now, of the plastics to about in Second even extend integration plastic of been the to is Palmyra back is out. the fantastic what on looking over COVID last, the success our coming drum the in which focus is continue sort business. through to third, the for do, then again, forward, and we're I'd paper is working That's and pleased right extending in back strategic determining plan be businesses and works us. a been very we to goes with strategy the And next now. which our we've right talk in say, going our our

George Staphos

Can it I you hear okay? me still If will... Or it is chopping? is,

Larry Hilsheimer

That's now, good good. It's yes.

George Staphos

question the just Okay, plastics. very good. Sure. had guess I a is on follow-on I

the just in You like metal. comments, feel and [indiscernible]? you so from IBC because and it get I'm have sufficient share guessing, and both that you in [indiscernible] plastics it you seems your penetration [indiscernible] feel both plastic

Larry Hilsheimer


but that often I to your like by CapEx do think, do market we fully. George, Virtually, position We've a serve want was have where think to who we been approached every we leverage you, before. situation has we again, to we've most I a of feel more have -- we up And this over customers one a begin broke question and unfortunately, even project. them. the of IBC have XX% our before been spend volume us committed said

by asked we're great being to we're So, into get them the of more providing service IBC because customers business. that the

investment we ago. the did Tholu starts United another virtuous group do drive As years more, and recycling we in small the component the improvement, Italy. and We did really margin cycle States. did here to couple deal recycling and the the acquisition a more that in in the We of

IBCs whole we of do component execute the and So that on to recycling continue plastics.

in player drums So I I U.S., players. already. mean we plastic the significant in mean a largest are we're

our opportunity in So business in and the Asia. to have expand EMEA we

growth good of a there's path front us. So, in

Pete Watson

cleaning the PCR collect in reconditioning it repurpose back can to not big it part recycled new a George, amount it it's to it, see, by important And in -- sending forward, think customers. behind some circular overall customers to business. ability customers. to well supplying very, IBC, increase we And and strategy we're to that reconditioning it's of business position we back our are comment growth Larry's movement our important And comment, customers really that of our rates turn catch we're market, our but I products. system readiness in not and and whether or to that's on really making model. economy go it, our have our going on enhance others, we're That a up. in to place in to that and we to grow We're and very using you'll recycled that quick will And but only in have that. And we a improve need is out and it's increase do very responded for based

Matt Eichmann

question. have We George. We'll may next our take lost


Our next is a Mark Wilde. follow-up from question

Mark Wilde

Thanks. I've got three quick follow-ups.

third increase sense First, the and quarter? in Larry, can in incentive you both of us year-over-year paper GIP give the a the of in accruals

Larry Hilsheimer

million million, the and $X was rest quarter ends functions units. $X Yes. corporate-wide, other PPS of in The overall Mark, breakdown and third then increased corporate over million incentive that of about PPS, third in The up being $XX quarter.

Mark Wilde

All Okay. right.

you'd Second had in I change recently in a you you've wondered competitor your that any in would primary leadership be about. And just comfortable at it. behavior whether you're Ole, seeing talking question, changes there

Ole Rosgaard

for own is to the our our question. on best customers. customers possible. serve primary business, function focused my the We're primarily our own Thanks And

Mark Wilde

in you've market? change behavior so the no Okay, that seen in

Ole Rosgaard


Mark Wilde

for you right. from you of don't do plan experience one that go going teens all again? Okay, the learnings well curious. M&A learned, that as I'm didn't to strategic about and just that in things you've Then Pete the sort of think last want sort early forward, Any

Pete Watson


did 'XX, create. management framework we doing into and we risk the back So and our we we determined got which and business on back includes and what acquisitive both this in how went structure to right and how value an evaluating went we XXXX also learnings in extensive fits wrong, we're can diligence, what when execute mode about process, and

acquisitions -- we've we not the the a Caraustar demonstrated smaller lot think only acquisition, done. other I but So some in that of

we're so really do we're to And relearning. has with process now involved in pleased. Part of this

in did past really few need So let's what go what and look well improve back to on. and we at years we the

this value executors deliver. what So on in what the we good shareholder to making really of excited in accretive we're not the and our it's learning reputation about that growth's it? we're continuous and -- growth to And great drives on got be to for to And it. progress be operationally add can we're important do our improvement. and to value that always improving, get stay It's current again, we focused sake. and mindset strategic our we're I to is we want intent. Ole, think are we and business anything And our like you'd portfolio

Ole Rosgaard

I, units that CapEx project or of my opportunity, Yes. back I'll learned. all in created that of just Maybe add a accounting checklist whenever Pete I'm believer the one lessons out have learnings we those has whether but addressed. And checklist. came a to on have it's big one a experience, thing, every opportunity acquisition public mean all list it's be items the and present to from I of an to those business Mark.

it, And off us will for going pay I So about we're think very formalized structured. continuously it forward.

Pete Watson


really I in these years disciplined what comment, strong five think, demonstrated Mark, the execution, Ole here, other the business. has to very last approach

them we stronger really create going expect think into going So more how I and, how acquisitions him will evaluate role this discipline further. we importantly, in

what allocation. where do really to feel and going capital approach in a to I good forward disciplined are going very we we're about So

Mark Wilde

Good year. we in as into look luck quarter Pete. the Okay. next and fourth Thanks


is Adam question last from of Your line Josephson. the

Adam Josephson

lot, on appreciate one I Pete and it. the a Larry, rate. Larry. Thanks tax

year. So to at that will there up have point your level year sustainable of from if consider a Did at unusual range this your is low to? year something the XX% year, end this would you XX% end this tax gone that last us thereafter? you Or rate XX% you

Larry Hilsheimer

rates current completed, in sustainable reserves capitals system, happens is with of substantial. in if changing not were around Yes. additional low world but as I whatever government the but stable us. then do free-up caveat some of were again, for the rates, exams some tax stay very the other tax believe, We had XXs Washington to and

But least So were places stable, other or willing the can't I'm to happen obviously, predict in confident it world. be I in if what's at -- that not in yet in going staying we'd very Washington to around predict rate.

Adam Josephson

sequentially that. Yes. your No, increase you're I assumption thought, $X on a I in and And OCC assuming, appreciate think, just so September/October.

sustainability and more end price to you the fairly modest the think a is? price sequentially than lot just a expect in to appear September. we're it's historical why these you been of talked Obviously, demand at you have OCC talk high increase ever of best September/October, levels the of range. been. what that kind people assuming about the Box in has Some be Can

as guess, So Thank is sustainable high I But not in do range. how that And surprise, it are? at the comes OCC of you. end you levels no an price expecting think its these increase September? of why more

Larry Hilsheimer

we Obviously, Yes. the in player business. recycled a relatively sizable have paper

are average. And we in Obviously, And what happen. and what as said, being driving going we've believe know, the to other $X things a you for That estimate so they some are we views. go comments is team that we're our blind said made we have to conferences people's at to not range.

others. been the there thrown So numbers contemplates have our that out range by

happen. totally comfortable provided we does if guidance the with So that we're

boxes matching out. production everything means just we else of are very getting And to and at interesting supply going. I you see a highs. to obviously, whole as labor there's like I supply it driver, is is of containerboard things containerboard. As going much bit I be the with how of more happened. to to e-commerce of play lot it's there think the out change Well, OCC is historically labor. sustainability, Obviously, And the that where all-time Because how everybody mentioned, collected. it's for big mean works. and the it's stuff but would in the and we supply production believe, is to also as going do acknowledge a And is had and it has not the than think And collection,

back dialogues and the to some have regional more going somewhat business. supply. their ones that try -- like to and unemployment operations. that, into on in supplements what more should these their collection large republican others, that with on we getting so understand If success optimistic going as labor have haulers, And that And is roll-off, hearing happens, they'll active they're we're and lead to in more all -- what's of waste

automation wouldn't costs So back that through as believe trend say, in I we're, their through the employment hopeful this I'll either component hopeful, OCC should and gets optimistic, say more down but over operations. of time or labor more addressed


At further to back hand this for are will call questions. Matt time, Eichmann remarks. now the I closing no there

Matt Eichmann

care. All thank their Take I today right. and have hope I'd nice Well, participation a all their for very you really thank to and ahead. like weekend you everybody much, questions.


That does call. Thank conclude today's for joining. conference you

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