GREIF, INC. (Exact name of registrant as specified in its charter) FORM 10-Q QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Greif, Inc. (GEF) reported its quarterly financial results for the period ended January 31, 2025. The company’s net sales increased by 4.5% to $1.23 billion, driven by growth in its Packaging segment. Net income rose to $34.1 million, or $0.63 per diluted share, compared to $28.5 million, or $0.53 per diluted share, in the same period last year. The company’s gross profit margin expanded by 130 basis points to 23.1%, while operating expenses increased by 3.5% to $243.8 million. As of January 31, 2025, Greif had cash and cash equivalents of $143.8 million and total debt of $1.43 billion. The company’s liquidity and capital resources remain strong, with a debt-to-equity ratio of 0.55.
Overview of the Company’s Financial Performance
Greif, Inc. is a leading global provider of industrial packaging products and services. The company operates in four reportable business segments: Customized Polymer Solutions, Durable Metal Solutions, Sustainable Fiber Solutions, and Integrated Solutions.
Revenue and Profit Trends
Net sales for the first quarter of 2025 were $1,265.8 million, up from $1,205.8 million in the first quarter of 2024. The $60.0 million increase was primarily due to $58.5 million in contributions from recent acquisitions.
Gross profit was $245.5 million in the first quarter of 2025, up from $221.6 million in the first quarter of 2024. The $23.9 million increase was due to the higher net sales, partially offset by higher raw material, transportation and manufacturing costs.
Operating profit was $59.9 million in the first quarter of 2025, down from $68.9 million in the first quarter of 2024. The decrease was primarily due to higher selling, general and administrative (SG&A) expenses related to recent acquisitions.
Net income was $14.4 million in the first quarter of 2025, down from $74.3 million in the first quarter of 2024. The decrease was primarily due to a $46.0 million increase in income tax expense.
Adjusted EBITDA, a non-GAAP financial measure, was $145.1 million in the first quarter of 2025, up from $137.0 million in the first quarter of 2024. The increase was primarily due to the higher gross profit.
Segment Performance
Customized Polymer Solutions: Net sales increased 29.5% to $295.1 million, and Adjusted EBITDA increased 53.1% to $39.5 million, primarily due to contributions from recent acquisitions.
Durable Metal Solutions: Net sales decreased 7.6% to $342.2 million, and Adjusted EBITDA increased 1.1% to $45.2 million, primarily due to lower volumes and negative foreign currency translation impacts, partially offset by lower raw material costs.
Sustainable Fiber Solutions: Net sales increased 6.2% to $561.4 million, and Adjusted EBITDA decreased 2.8% to $51.5 million, primarily due to higher SG&A expenses and higher impairment charges, partially offset by higher containerboard and boxboard prices.
Integrated Solutions: Net sales decreased 14.5% to $67.1 million, and Adjusted EBITDA decreased 34.1% to $8.9 million, primarily due to the divestiture of Delta Petroleum Company, Inc. during the third quarter of 2024.
Outlook and Analysis
Despite slightly improved year-over-year volumes, the company does not anticipate seeing any compelling customer demand inflection on the horizon. Prices for steel, resin, old corrugated containers, and other direct materials are expected to increase moderately through the remainder of the year, while transportation, labor and utility costs are expected to remain relatively stable.
The company’s financial position remains strong, with ample liquidity from operating cash flows, senior secured credit facilities, and trade accounts receivable credit facilities to fund working capital, capital expenditures, dividends, debt repayment, and potential acquisitions. However, the company faces risks related to raw material cost inflation, foreign currency fluctuations, and potential changes in environmental and safety regulations.
Overall, Greif delivered a mixed performance in the first quarter of 2025, with revenue growth offset by higher costs and expenses. The company’s diversified business model and focus on operational efficiency through the Greif Business System 2.0 initiative should help it navigate the current challenging environment.
