This article first appeared on GuruFocus .
Release Date: July 29, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
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Greif Inc ( NYSE:GEF ) achieved approximately 25% adjusted EBITDA growth, demonstrating strong financial performance.
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The company expanded its margins by more than 260 basis points, indicating improved operational efficiency.
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Greif Inc ( NYSE:GEF ) reduced its leverage to just 1.1 times, showcasing strong financial management.
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The company is committed to delivering $120 million of annualized cost optimization by the end of the next fiscal year.
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Greif Inc ( NYSE:GEF ) has a strong cash generation capability, expecting a free cash flow conversion of around 50% this year.
Negative Points
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Ongoing geopolitical disruptions, particularly in the Middle East, continue to impact demand.
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Broader industrial markets remain soft, reflecting geopolitical uncertainty.
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Fiber solutions segment experienced lower net sales year over year due to a mill closure.
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The company strategically maintained higher inventory balances at a high dollar cost due to increased raw material indices.
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There is uncertainty in the pace of market recovery, with demand improvements coming from a very low base.
Q & A Highlights
Q: How has the URB (Uncoated Recycled Board) market trended in July compared to Q3, and what are the expectations for price recognition? A: Larry Hillsheimer, CFO, stated that operating rates remain strong at 96%, indicating robust demand. Despite some market commentary, they have not faced significant resistance from non-contract customers, and they expect price recognition. The fundamentals support this, and they have not factored any slowdown into their guidance.
Q: Can you provide insights into the demand trends on a regional basis and the sequential volume improvements? A: Ollie Rossgaard, CEO, noted that while demand has improved globally, it is from a low base. The company has been successful in winning new business, particularly in flavor, fragrance, and pharma segments. However, they continue to face pressure from the chemical market and muted housing markets. The focus remains on controlling what they can and pursuing new growth opportunities.
Q: How is the commercial shift from "farmers" to "hunters" progressing, and what are the expectations? A: Ollie Rossgaard, CEO, expressed satisfaction with the progress, although it's still early days. The company has restructured its commercial approach, focusing on solution selling and helping customers solve their challenges. This shift is supported by new tools and a focus on finding new business opportunities.
Q: What is the current M&A pipeline, and should we expect an increase in M&A activity? A: Ollie Rossgaard, CEO, mentioned that while the focus is on organic growth, they are supplementing it with bolt-on acquisitions. They have a healthy pipeline of similar companies and expect to continue with this strategy, avoiding transformative M&A and focusing on strategic bolt-ons.
Q: How has the company managed the price/cost dynamics in the polymer segment amid inflationary pressures? A: Larry Hillsheimer, CFO, explained that the company has seen significant price increases in resin but has managed to stay ahead of inflationary pressures by working closely with customers. They do not expect further dramatic increases but are well-positioned to manage the current pricing environment.
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
