By the numbers: Fiscal Q4 2024
Net sales: $1.42B
Up 8.3% year over year
Net sales for global industrial packaging: $786.9M
Up 9.1% year over year
Net sales for paper packaging and services: $624.5M
Up 7.4% year over year
Net income for FY 2024: $288.7M
Down 23.8% year over year
- Overview: In North America, Greif’s largest market, global industrial packaging volumes for the fiscal fourth quarter that ended Oct. 31 were down 18% on a two-year basis, while paper packaging and services experienced a 4% dip in the same time frame, executives said on Thursday’s earnings call. Executives said they expect a full recovery from these lower volumes, which they believe resulted from the extended demand contraction cycle. “We have not seen an industrial contraction longer than the current period, which is 25 months through November,” said CEO Ole Rosgaard. Europe, the Middle East and Africa was Greif’s strongest-performing region during the quarter, although volumes there were down sequentially.
- Segment shuffle: Greif completed a reorganization to shift away from its dual-business segment structure — global industrial packaging and paper packaging and services — and instead divided the businesses into four material-based sectors: customized polymers, durable metals, sustainable fiber and integrated solutions. “We have fundamentally changed how we operate as a company, organizing in a manner that will allow us to fully leverage our core competitive advantages and enable us to double the size of the company in the future,” Rosgaard said.
- Investment focus: Executives said they see the biggest opportunity for growth in polymer-based products and will invest more in that sector going forward. “This evolution has been occurring for years and now our polymer business is large enough to warrant individual segmentation,” Rosgaard said. Executives discussed anticipated growth in intermediate bulk containers and in the caps and closures business following investments. Yet Rosgaard emphasized that “we still have a fiber-based and a metals-based business,” and the company plans to invest in automation in those areas, especially metals.
- Cost reduction: Executives also announced a plan to reduce costs, which could include plant consolidation and staffing reductions, by at least $100 million by the end of fiscal year 2027 from the 2024 baseline. Executives said they have not yet identified how much cost-cutting will occur in each of the next three fiscal years, and they plan to discuss the initiative more during Greif’s investor day event on Dec. 11.
- Outlook: Greif’s top near-term priority is debt reduction, according to CFO Larry Hilsheimer. Executives do not anticipate Greif will experience a significant negative impact should President-elect Donald Trump impose the tariffs he has floated. “You have to remember that we, by and large, source our raw materials locally. We produce locally, and we sell to our customers locally. And that means tariffs won't really play into our business,” Rosgaard said.
