Graphic Packaging Reports 4Q, Full Year 2021 Results

Graphic Packaging Holding Company reported net income for fourth quarter 2021 of $39 million, or $0.13 per share, based on 309 million weighted average diluted shares. This compares to fourth quarter 2020 Net Income of $64 million, or $0.24 per share, based on 270 million weighted average diluted shares.             
           
For the full year 2021, net income was $204 million, or $0.68 per share, based on 298 million weighted average diluted shares. This compares to 2020 net income of $167 million, or $0.60 per share, based on 280 million weighted average diluted shares.

Net sales increased 20% to $1,988 million in the fourth quarter of 2021, compared to $1,652 million in the prior year period. The $336 million increase was driven by $250 million of favorable volume/mix and $86 million in positive pricing.

Net sales increased 9% to $7,156 million for the full year 2021, compared to $6,560 million in the prior year. The $596 million increase was driven by $379 million of improved volume/mix from organic growth and acquisitions, $150 million in positive pricing and $67 million in favorable foreign exchange.

“We met the high-end of our organic sales growth goal in 2021 generating 2% year over year growth, after generating 4% organic sales growth in 2020,” said Michael Doss, the company’s president and CEO. “We are capturing new business supported by consumer preference for sustainable, fiber-based packaging solutions. Innovation and more circular consumer packaging solutions are consistently driving organic sales growth. We are winning in existing markets while expanding our participation into new markets.

“The AR Packaging acquisition, completed in the fourth quarter, has further strengthened our innovative offerings for consumers and positions us for growth in new geographies, markets and products,” added Doss. “The successful startup of our transformational K2 coated recycled board machine and execution of our coated recycled board platform optimization project will further solidify our cost and quality leadership in the industry.”

“Our execution of strategic initiatives, including significant price execution, is expected to result in 2022 adjusted EBITDA in a range of $1.4 to $1.6 billion, a 42% year over year growth rate at the midpoint,” Doss continued. “The resulting robust cash flow we expect to generate will allow us to return to our desired leverage range of 2.5 to 3.0 times in 2023.”

EBITDA for the fourth quarter of 2021 was $218 million, a decrease of $32 million from the fourth quarter of 2020. After adjusting for charges associated with business combinations and other special charges, adjusted EBITDA increased $20 million to $285 million in the fourth quarter of 2021 from $265 million in the fourth quarter of 2020.

EBITDA for the full year 2021 was $906 million, an increase of $52 million from the full year 2020. After adjusting for charges associated with business combinations and other special charges, Adjusted EBITDA decreased 1% to $1,056 million in the full year 2021 from $1,070 million in the full year 2020.

Net cash provided by operating activities was $609 million for the full year 2021, compared to $825 million for the full year 2020. Total debt (long-term, short-term and current portion) increased $1,649 million during the fourth quarter of 2021 to $5,831 million compared to the third quarter of 2021. The company’s year-end net leverage ratio was 5.36 times Adjusted EBITDA compared to 3.26 times at the end of 2020.