By the numbers: Fiscal Q1 2025
Net sales: $1.27B
Up 5% year over year
Net income: $14.4M
Compared with $74.3M in 2024
- Overview: Greif reported earnings for the first full quarter since its reorganization has been in place. It now has four business units instead of two. Net sales in fiscal Q1 grew most in the customized polymers business, up 29.4% year over year to $295.1 million. The sustainable fiber segment grew 6.2% to $561.4 million, while sales in durable metals fell 7.6% to $342.2 million. The “soft industrial economy” was a drag on metals, said CEO Ole Rosgaard. When the “very depressed market” turns around “even the slightest, we are in an ideal situation to take off," he said.
- Timberland divestiture: Greif announced its intention to sell its entire 176-acre timberland portfolio in the Southeastern United States, managed by wholly owned subsidiary Soterra. “Net proceeds are going to help us lower our debt ratio quite significantly,” said CFO Larry Hilsheimer. Rosgaard said Greif receives unsolicited offers for its timberland on an ongoing basis, “and we know we can get a very good price for it.”
- Upcoming cuts: Executives revisited the $100 million cost-reduction plan announced in December that would likely include plant closures and layoffs. Hilsheimer did not comment on which facilities might close, but Greif is looking at its entire footprint. “Everything we have is under review as part of this cost optimization process,” he said.
- Facility closures: Greif announced in January two closures at paperboard and containerboard facilities that would affect 140 employees. The two “did not achieve the level of earnings necessary to support continued operations,” Hilsheimer said. The company expects an incremental $8 million in benefits from these closures by 2027, although a short-term earnings headwind of $3 million is anticipated in fiscal 2025.
- Tariffs: Greif doesn’t expect to experience a large negative impact resulting from potential tariffs, because its business is mostly localized, Rosgaard said. He added that the restructured business model has enabled better global supply chain adaptability. Still, leaders conducted an impact assessment for multiple tariff scenarios and created mitigation plans.
- Outlook: Due to economic uncertainty in industrial sectors, Greif chose to only provide low-end guidance for fiscal 2025. Guidance for adjusted earnings before interest, taxes, depreciation and amortization is $710 million, and adjusted free cash flow is expected to be at least $245 million. “Our expectations [are] not that the business will end the year at this performance, but it is the only data point which we have conviction in sharing,” Hilsheimer said. “In subsequent quarters we will reassess, returning to arranged guidance.”
