Greif, Inc. Reports Fiscal Q2 2026 Results: Strategic Realignment, Financial Gains, and Cautious Outlook Amidst Soft Market

Key Highlights

• Divestiture of Containerboard Business: Greif completed the sale of its containerboard business, including the CorrChoice sheet feeder system, to Packaging Corporation of America for \$1.8 billion in an all-cash deal. The transaction closed August 31, 2025, and these operations are now classified as discontinued from Q3 2025 onwards.
• Segment Restructuring: The Integrated Solutions segment was renamed Innovative Closure Solutions. Additionally, certain activities (recycled fiber, adhesives, etc.) were moved to Sustainable Fiber Solutions, and packaging-related product lines shifted to Durable Metal Solutions.
• Strong Non-GAAP Performance: Adjusted EBITDA rose 7.5% year-over-year to \$156.8 million. Net income (excluding adjustments) jumped 57.5% to \$62.7 million (\$1.10 per diluted Class A share).
• Significantly Lower Leverage: Total debt reduced by \$1.77 billion to \$1.01 billion, and the leverage ratio improved sharply to 1.1x from 3.3x.
• Share Repurchase and Debt Refinancing: Completed \$150 million share repurchase (1.8 million Class A and 0.4 million Class B shares). Refinanced debt with \$500 million in term loans and \$800 million in revolving credit at a 3.14% average rate, extending maturity to 2031.
• Cost Optimization: Achieved \$75 million in run-rate cost savings by end of Q2 2026, up from \$65 million at Q1 2026.
• Sustainability and Engagement: Issued 17th Annual Sustainability Report and completed a Gallup Colleague Engagement Survey with world-class results (91st percentile, 98% participation).

Financial Performance: Detailed Overview

Headline Financials (Continuing Operations Only)

• Net Income: Decreased 32.3% to \$12.6 million (\$0.22 per diluted Class A share), primarily due to special charitable contributions and higher SG&A.
• Adjusted EBITDA: \$156.8 million (+7.5% YOY) with margin expansion.
• Adjusted Free Cash Flow: Surged to \$179.3 million, up \$92.7 million YOY. Note: Prior year includes now-divested Containerboard business, so not directly comparable.
• Net Cash From Operating Activities: Decreased by \$5.8 million to \$116.6 million.
• Total Debt: \$1,005.9 million (down from \$2,775.2 million YOY), mainly from divestiture proceeds.
• Net Debt: \$719.8 million (down from \$2,522.5 million).
• Leverage Ratio: 1.1x (down from 3.3x).
• Dividend: Quarterly cash dividends of \$0.56 (Class A) and \$0.84 (Class B), totaling \$31.9 million, paid April 1, 2026.

Segment Results

• Customized Polymer Solutions:
  • Net sales up \$22.3 million to \$344.8 million (mainly foreign exchange and volume).
  • Gross profit down \$2.7 million to \$74.1 million (higher raw materials and manufacturing costs).
  • Operating profit fell sharply to \$2.5 million (from \$17.8 million), mainly due to higher SG&A.
  • Adjusted EBITDA up \$2.4 million to \$45.8 million (cost optimizations).
• Durable Metal Solutions:
  • Net sales up \$7.5 million to \$380.4 million (currency gains offset lower volume).
  • Gross profit up \$5.5 million to \$89.3 million.
  • Operating profit down \$2.1 million to \$39 million (higher SG&A).
  • Adjusted EBITDA up \$11.6 million to \$61.6 million.
• Sustainable Fiber Solutions:
  • Net sales down \$38.9 million to \$321.8 million (lower volume, Soterra divestiture).
  • Gross profit down \$6.8 million to \$71.3 million.
  • Operating loss increased to \$10.2 million (higher SG&A).
  • Adjusted EBITDA down \$5.5 million to \$40.8 million.
• Innovative Closure Solutions:
  • Net sales up \$3.5 million to \$25.8 million (higher price, currency gains, lower volume).
  • Gross profit up \$2.5 million to \$12.3 million.
  • Operating profit up \$0.1 million to \$4.1 million.
  • Adjusted EBITDA up \$2.4 million to \$8.6 million.

Tax and Guidance

• Q2 tax rate: 27.1% (excl. adjustments: 25.5%). FY 2026 guidance: 26.0%-30.0% (reported), 28.0%-32.0% (excluding adjustments).
• Guidance: Reflecting ongoing geopolitical risks and continued industrial softness, the company lowered its low-end full-year guidance:
  • Adjusted EBITDA: \$610 million
  • Adjusted free cash flow: \$315 million
• Company has not identified a demand inflection and remains cautious due to the Middle East conflict and persistent industrial contraction.

CEO Commentary

“Greif delivered a resilient second quarter in a continued soft industrial environment. Demand remains subdued, and our results reflect the reality of the markets we serve. That said, we executed well on the factors within our control. Adjusted EBITDA increased 7.5% with margin expansion, and we generated strong adjusted free cash flow reflecting disciplined operations and a structurally stronger cash generation profile. We have also significantly strengthened our financial position. At 1.1x leverage, our balance sheet provides flexibility to invest in the business, return capital to shareholders, and navigate ongoing uncertainty from a position of strength. Our strategy remains consistent: build for organic growth through operational execution, commercial discipline, and continuous improvement, complemented by targeted, value-focused M&A. We are not yet seeing a demand inflection, and geopolitical developments, including the ongoing conflict in the Middle East, continue to weigh on industrial activity. We are taking a more conservative outlook and managing accordingly, with a focus on cost control, cash generation, and disciplined execution.”

Potential Price-Sensitive/Material Information for Shareholders

• Massive Deleveraging: The company’s debt reduction and new 1.1x leverage ratio greatly enhance financial flexibility and could improve investor sentiment.
• Share Buyback: Completion of the \$150 million program signals confidence in future prospects and returns capital to shareholders.
• Segment Realignment: The new structure may drive operational efficiency and clarify business unit performance going forward.
• Lowered Guidance: Management’s decision to lower the low-end of annual Adjusted EBITDA and adjusted free cash flow guidance due to ongoing industrial weakness and geopolitical uncertainty could be viewed negatively by the market.
• Strong Cash Flow and Margin Expansion: Despite lower top-line net income, the company’s non-GAAP profitability and free cash flow generation have improved, offsetting volume-driven weakness in some segments.
• Ongoing Market Weakness: The absence of a demand rebound and continued commentary around Middle East conflict and soft industrial activity may weigh on sentiment and valuation.

Risks and Forward-Looking Statements

Greif highlights several risks that may impact future performance, including global economic and political instability, ongoing Middle East conflict, currency fluctuations, raw material and energy cost changes, acquisition/divestiture challenges, labor relations, cyber security threats, regulatory and environmental compliance, and the risk of failing to achieve cost savings or sustainability targets.

Conference Call and Further Resources

Greif will hold a conference call on April 29, 2026, at 8:30 a.m. ET to discuss these results. Investors can register online for dial-in details. The company’s 17th Annual Sustainability Report is available at www.greif.com/sustainability/.

Investor Relations Contact: Bill D’Onofrio, Vice President, Corporate Development & Investor Relations, 614-499-7233, [email protected]

Disclaimer

Disclaimer: This article is based on the latest publicly available financial filings and press releases from Greif, Inc. Forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from those projected. Investors should review the company’s filings with the SEC and consult their financial advisors before making investment decisions. This article is for informational purposes only and does not constitute investment advice.

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